Building business strategy at company level for Ha Noi-Dien Bien natural resource and minerals company limited, period 2010 - 2015

Thesis structure Apart from the introduction and conlusion, large exercise of 3 of chapter: Chapter I: Theory basis on business strategy Chapter II: Analysis of the current status of the

CAPSTONE PROJECT REPORT

BUILDING BUSINESS STRATEGY AT

COMPANY LEVEL FOR

HANOI-DIEN BIEN NATURAL RESOURCE AND MINERALS COMPANY LIMITED,

PERIOD 2010 — 2015

GROUP 6:

Do Thi Thuy Nguyen Gia Long Phan Thi Loan Doan Hung Truong

Class: GaMBA 01.M05

HA NOI 2010

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INTRODUCTION

Topic: “Building business strategy at company level for HA NOI - DIEN BIEN

MINERAL AND RESOURCES COMPANY LIMITED in the period 2010 — 2015”

1 Necessity of the subject:

In the history of the world has observed many people integrate the business world with a small capital, but they were quickly then successful and gained victories and victories thanks to the right business strategy The business strategy is compared with steering wheel of the ship that helps to come over the ocean to the destination, particularly at the beginning time of its operation It is also considered a gust of wind that flies the kite higher and higher Actually, experiences of successes and failures in business have showed some billionaires are descended from bare hands

millionaires have to pass their fortune to their competitors in a short time due to blunder in business method Closing down of loss-making companies and development of profitable enterprises really significultly depends on business strategy of such companies, particularly in the market economy

Origin of success or failure is dependent on one of the important factors, which is what business strategy the company has

Being aware of the importance in building the company Business Strategy , with the knowledge gained from MBA course provided by ETC (Hanoi National University)

in association with Griggs University and study period in HA NOI - DIEN BIEN MINERAL AND RESOURCES COMPANY LIMITED, our group would like to choose the topic: “Building business strategy at company level for HA NOI -

DIEN BIEN MINERAL AND RESOURCES COMPANY LIMITED in the period 2010 — 2015”

Purpose: With this topic, we wish to help the company have right track in the coming period

2 Scope of research

The concentration of resources to the question on the development strategies of

HA NOI - DIEN BIEN MINERAL AND RESOURCES COMPANY LIMITED

Analysis, to study the operation of the business of the company on the following aspects: the function, tasks and inside and Outside and environment branch Since the strategy of business for a period of 2010-2015 and the solutions and specific measures for the implementation of the strategies

3 Methods of research

Capstone project report use of scientific methods: comparison and to sum up, the method mark; the use of statistical data for the demonstration

4 Thesis structure

Apart from the introduction and conlusion, large exercise of 3 of chapter:

Chapter I: Theory basis on business strategy

Chapter II: Analysis of the current status of the enterprise

Chapter III: Designing strategies and solutions for the implementation of the

strategies

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CHAPTER I GENERAL THEORY BASIS ON BUSINESS STRATEGY

I OVERVIEW OF STRATEGIC MANAGEMENT :

Motivated by increasing internationalization trend and scarcity of resouces, rain- storm development of technology, change of market demand, business environment

is becoming more and more complicated and fluctuant Such business environment requires the enterprise to have a good business strategy, so that it can catch the opportunity, avoid risks, and ensure a stable and sustainable development

1.1 Business strategy:

1.1.1 Origin of strategy and concept of business strategy

“Strategy” is a term originated from Greek language, ““Strategos” which is used in military, the modern military theorist Clawzevit reckoned: Military strategy is the commanding art at the optimum advantage A publication of Larous dictionary considers: strategy is an art to commend all means to gain the victory

Scholar Dao Duy Anh, in Vietnamese dictionary wrote: strategy is drawn plan to achieve the victory on one or many battlefields Therefore, in army aspect, strategy term in general is considered a commanding art aiming at victory achievement in a

war,

In 1962, Chandler defined strategy as “determination of long-term basic target and goal of the enterprise and application of actions series as well as allocation of necessary sources to implement such targets” (Chandler, A (1962) Strategy and Structure Cambridge Massachusetts MIT Press)

Until 1980, Quinn introduced a more general definition “Strategy is a pattern or plan which integrates essential goals, policies and action series into a firmly consolidated general” (Quinn, J.B.1980 Strategies for Change: Logical

Incrementalisn Homewood, Illinois, Irwin)

Then, Johnson and Scholes redefined strategy in an environment with a lot of quick changes: “Strategy is orientation and scope of an organization in long term to gain its competition power through formulation of its sources in changing environment

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in Order to meet market demand and satisfy shareholders” (Johnson, G.,Scholes, K

(1999), Exploring Corporate Strategy, Sth Ed Prentice Hall Europe)

A part from the above traditional approach, many business organizations approach the strategy in a new way: business strategy is plan to control and use human, properties and finance resources aiming to enhance and ensure the indispensable rights Kenneth Andrews was the first to offer these outstanding ideas in the classical book "The Concept of Corporate Strategy!" He introduced that the strategy

is what an organization must rely on the strengths and weaknesses of theirs in the context of both opportunities and threats

Brace Henderson, strategist at the same time was the founder of Boston Consulting Group connected the concept of strategy with competitive advantage Competitive advantage is setting a company in a better position than its competitor’s to create the economic value for customers "Strategy is a careful search for an action plan to develop and combine competitive advantage of the organization The difference between you and your competitor is the basis for your advantage He believed the two competitors can not coexist if their business methods are identical Difference creation can enable the existence Michael Porter also agreed with Henderson’s judgment: "Competitive Strategy relates to differences That is a careful selection of

a series of different activities to create an unique set of values”

By what means of approach, nature of strategy is drafting the future image of the enterprise in their activities field and operation capacity According to this understanding, business strategy term is used in 3 most popular meanings:

- Determination of long term goal of the enterprise

- Provision of the general action program

- Selection of action options, allocation of sources to implement such goal

Economic University”

1.1.2 Basic characters of strategy

- Strategy specifies clearly fundamental objectives, business directions to be obtained in

each period and is fully consistent thoroughly in the areas of operations management of the

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- Business strategy is built on basis of the enterprise competitive advantage to ensure maximum mobilization and good combination with operation and use of sources (manpower, asset power of both visible and invisible), core capacity of the enterprise in present and in future aiming to promote Strengths, capture the chances

to obtain upper hand in competition

- Business strategy is reflected in a continuous process from building up, implementation organization, evaluation, inspection and adjustment of the strategy

- Business strategy always carry attacking idea to gain victory in competition Business strategy is formed and realized based on identification and utilization of business opportunities, competitive Strengths of the enterprise to achieve high business efficiency

- Every important strategic decision in the process of building-up, implementation and adjustment of strategy is often focused to high rank managers group To ensure the correctiveness of long term decisions, information secret in competition is important

1.1.3 Roles of strategy in business

With the above characters, it is said that in market mechanism, building and

realization of business strategy has an important meaning for the enterprise

existence and development

- The business strategy help the enterprise recognize its target of orientation in future as guideline for all activities of the enterprise

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- Business Strategy will provide assistance to the enterprise in seizing and making use of trading opportunities, simultaneously proceeding countermeasures against threats in business market

- Business strategy contributes to enhance efficiency of sources usage, intensify company position to make sure of uninterrupted and unshakeable development

- Business strategy creates strong base for the enterprise to make decision suit the market changes It gives firm basis for activities of research and development, investment to personnel training and improvement, market widening and product development In fact, almost mistakes in investment, technology, and marketing are in consequence of building wrong strategy or wrong target

1.2 Strategic Management

1.2.1 Definition of strategic management

Some definitions of strategic management:

- Strategic management is a group of decisions and actions to decide the long term success of the Company

- Strategic management is a group of decisions and measures to make plans and implement strategies to realize targets of the Company

- Strategic management is to study existing and future conditions and to make plans for targets of the Company; to organize and check the implementation of decisions

to realize targets in both existing and future conditions

1.2.2 Meanings of strategic management

- Help to realize, give priorities and obtain opportunities

- Point out real opinions and views on difficulties of management works

- Put forward an outline for the synchronous development of activities and control

- Minimize risks

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- Help to have major decisions serving the preparation of targets

- Help to have better arrangement of time and resources for specific opportunities

- Reduce time and resources necessary to correct mistakes and wrong decisions

- Create a framework for relationships among individuals within the Company

- Help to combine individual actions into a common effort

- Create a basis to specify responsibilities of each individual

- Bring about an encouragement for good and progressive opinions

- Create means of cooperation, attachment, passion in jointly solving problems and obtaining opportunities

- Encourage active manners to changes

- Bring about an official discipline in the Company

1.2.3 Strategic management model

Strategic management process is often studied and used through models

The strategic management model created by F David is popularly accepted This model does not ensure the success but provides a clear and basic approach in preparation, implementation and evaluation of strategies The Relationship among steps of the strategic management process is presented in Figure 1.1

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Model 1.1: Strategic management model of F David

“Source: Chapter 1—General of Strategic Management—National Economics

University” The Outline of tasks, targets and strategies of a Company is the firstly logic and necessary step in the strategic management because the existing position and status

of the Company could prevent the Company from applying some strategies and even prevent the Company from series of works Each Company has its own tasks, targets and strategies though these tasks, targets and strategies are prepared, and published unintentionally The answer for the future position of the Company will

be mainly decided by its current position

2.1 Analysis of the environment within the enterprise

Purpose to identify strong and weak points which allow the enterprise to determine: What we can do?

Based on the determination of company sources and core capacity, from that appropriate measures for the company strategy will be given in compliance with external conditions

* Company core capacity:

- Special production skills with high quality

- Provision of after-sales service

- Low production cost

- Advantagous location of retailing system

- New technology for product development

- High professional sale representatives, etc

* Internal sources of the enterprise

Those are input factors of production and trading process including visible and invisible sources

* Model of value chain analysis (by M.Porter, 1985 )

In this value chain, Porter’s model divided into two main aspects of business: supplementary and key activities Basically, there are generally nine types of

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activities which creat value in the whole chain Group of key activities consists line

of five types of activities: input the materials to trade; operation, production-trading; transportation outwards; marketing and sale; providing relating services Supplementary group contains activities which make value including: infrastructure, human resources administration, technology and procurement Supplementary ones occur inside each key activity

2.1.1 Analysis manpower

In the way of the creation of the competitiveness of companies, the advantage through human rights is a fundamental factor Human being is reckoned as essential source and possess decisiveness thoughout ages Resources from the human factor

is Sustainable and difficult to change in any organization

Capacity through manpower in company is understood as capacity of the company employees team This capacity is shown in aspects of figure 1.3 Human resource contributes to success of the company in respects of high quality, excellent services, innovation ability; skills in specific works; and capacity of employee team This is the core factor to bring about the sucess for the organization However, not every organization can achieve sucess in all aspects on manpower and normally they choose focuses suitable to the company vision and strategy

Paying attention to labor is the best way to stick them to the company Researches will demonstrate thoughts, attitude and indicators of changes in their works, from

those, countermeasures of the company will be drawn out Consistent, effective and

courageous management will bring sucessfull efficience better than expected The company has to confirm number of employee and their relative capacities can match with position and function of the current work or not?

Therefore, in long term, the company, organiztion has to control the employment, selection, training-upgrading, and complimentary Tasks and targets of the organization will be carried out in parallel with an efficient HR strategy

2.1.2 Analysis of the technical infrastructure and technology companies

2.1.2.1 Technology renovation:

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Motivation of technology innovation differs from motivation of innovation and improvment of products of which market widening is the main target, while technology innovation is with purpose of cost reduction or product quality rising Technology innovation does not always require research of basic technical science, but it demands competences to exploit new science achievements

2.1.2.2 Analysis of the infrastructure of an organization

This activity is controlled by the whole team, organization or strategic plan, including MIS, equipments and machines for implementation and monitoring them

It like an accounting department The enterprise has to maintain following elements:

- Organization structure, prestige and enterprise image

- Enterprise scores to achieve goals

- Communication system setting

- General organization monitoring system

- Atmostphere of organizational order

- Capacity, level of attention and qualification of the highest management board

- Strategic planning system

2.1.3 Analysis of the capacity of the company

Financial analysis enables enterprise in determination of its strengths and weakness

It also identifies causes and gives solutions for that issue The enterprise can only exist and bring in more wealth to its owner if its finance is well managed

Therefore, in any scale, big or small, the enterprise should focus on financial

management In order to implement the enterprise business assignments, financial management activity does not taken independantly but related to other functions such as production, marketing, administration, human resource During analysis of enterprise finance, it is required to conduct following steps: Selecting criteria to be

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evaluated; identifying those criteria; comparing with the past’s criteria and common criteria in the business field as well as competitor’s criteria

2.1.4 Analysis of the capacity of the company

During business development, enterprises spend great efforts to achieve market advantage such as expansion of production scale, gained experience in order to reduce product price and increase competition of the product in the market; final goal is to increase turnover and profit for the enterprise Or enterprises carry out improvement of their machinary, motivate development research aiming to promote products having different functions to sastify customers’ demand Though the enterprise has to invest big amount for this method but owning to the difference of product, consumers are willing to pay high price for it Thus, the enterprise are still able to maintain its position in the market

Production function in business operation is a process of making inputs into goods and service For almost businesses, major production cost to creat goods and service makes up large ratio in company costs The enterprise should determine: What to be produced? How is quantity? Where to be comsumed? And when to be produced?

So, the enterprise should establish production plan, material reservation and supply plan and product reservation and provision plan

Therefore, production function is often considered as a competition weapon in the

company strategy

2.1.5 Analyze the Marketing activities

As definition of American Marketing Association: Marketing is performing business activities in order to transfer goods and services from manufacturers to consumers or users”

Marketing plays an important role in decision and coordination of integration of enterprise’s business activities and market; ensures business activities of enterprise following the market, which consider the market and consumer’s demand the basis for business decision-making To analyse marketing performance in business, we need to forcus on matters of analysing customer, purchasing and selling acitivities, product and service strategies, price making, distribution, marketing study,

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2.2 Analysis of competitiveness

Companies pursue strategic businesses to achieve more competitive Strengths than their competitors’ and consequently gain an income higher than the average level Tiese strategic businesses are: Leading in cost saving, product differentiation and

Model 1.2: Three competitive strategy of basic M.Porter

“Source: Chapter 6 — General of Strategic Management—National Economics

University”

= Assess the competitive capacity of the whole enterprise

Bisiness must find out its strong point that it’s performance is better than other competitors Such strong points that the competitors cannot copy or adopt simply Cverall frame of building business competitive Strengths is as below:

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Model 1.3: Core competitive capacity

“Source: International Business Management — Commercial University”

From comments and analysis of business’s internal and external factors, we build

matrix SWOT (identify weak point, strong point, opportunity, challenging) to determine the suitable strategy to be executed

2.3 Analysis of Environment macroscopic

It is an environment containing huge factors that affect to long term strategical

decision of business For example: economical, political, cultural, law factors, etc

2.3.1 Analysis of Legal and Political factors

Elements of political influence and great to the operations of enterprises They can create opportunities and obstacles even real risk to the enterprise for a change of political For example:

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2.3.2 Analysis of the economic environment

Economic factors can change value and turnover of the enterprise, such as: balance

of trade, foreign investment, market orientation, monetary system, distribution of

income and purchasing capacity, inflation, economic development, infrastructure and natural resources Specifically:

- Economic environment shows nature and direction of an economy in which the enterprise operates its activities Such definition of economic environment in present condition should be relatively understood, since intergration of countries in over the world as a result of a global economy, thus the business itself needs to

inspect, observe, calculate cost estimation and assess economic healthy of the overseas economy

- National balance of trade shows advantage fields of a country

- Inflation can reduce stability of an economy and cause slow economic growth,

higher interest and unstable exchange rate variation If the inflation increases,

making a business plan becomes high risk A key feature of inflation is that it makes future forecast very difficult

- Investiment in morderation of companies in case of increasing inflation will

slowdown economic activities, then at last put them to come into deadlock

Consequently, high inflation is certaintly a threat to company

- Economic growth leads to an outbreak of expenses of consumer, thus it can make

a more comfortable trend of competitive pressure in the same field This brings opportunities to companies to expand their business and obtain higher profits In

contrast, economic decline will lead to decreasing consumption, as a result,

competitive pressure is increased Also an declined economy normally causes price wars in saturated fields

- Monatory system is indicated through national applicable currency and the exchang rate, which defines value of currency of different countries Exchange rate

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in the meanwhile, it creates opportunities for increasing export turnover

2.3.3 Analysis factor in social and cultural

Culture is a complicated concept Culture is considered as an objective existance in human society Each of person, manager or organization belongs to a curtain

culture Moral, belief, system of values of each individual is built and grown under

each culture Similarly, business strategy is also affected by culture, it controls consumer’s behaviour and customer’s buying attitute

Society is a colorful picture created by individual with different life styles It is this

to control strongly the formation of demand of type, quality, quantity, shape, sample etc of products or services characterising that life style Thus managers, unless adjusting their activities to catch up with life style of both current and future society, they hardly to make a good business The factors are as follows:

- Social organizations

- Values and criteria

- Language and religion

- Population with growth rate and aging structure

Normally, in each business, manager has to analyse population structure by gender, age to phase and determine the target market That means, by such analysis, they can identify the actual demand of their products, then make decision of production and consumption plan of their business

- Urbanization speed

- Fact and business behaviour

Population movement from one area to another area is also a factor affecting to making strategic plan and human resources management, marketing stretagy and other supporting business plan acting in the existing business environment

- Professional Capacity

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Program

Population and population growth in each market and each nation, as always, is factor that causes dramatical affection to all business administration of each

company

2.3.4 Analysis Factor in technological

Of course, technology alternation will affect to life circle of a product or service A theorical cycle consists of starting, growth, mature and vanish There is the fact that after the vanish stage, some products will have a new growth Moreover, technology alternation also affects to production method, materials as well as labor”s behaviours Thefefore, this is factor with significant and direct affection to business strategy of many companies and many sectors The 21 century is a century of science and information technology, therefore, analysis and prediction of technology alternation is very important and urgent ever, as following indications:

- Scientific and technology criteria

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It is an enviroment in which the business is performing their business activities, including a set of elements directly affecting to business, and also affected by the business For example: supplier, competitor, customer, etc

There is a analysis model may the force be M.Porter construction helped the seasons the strategy in the analysis of this The model presented a model of 1.4

Threat of new Entrants

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Threat of Substitute Products

Model 1.4: Five-forces model

“Source: Chapter 3 — General of Strategic Management—National Economics

University” 24.1 Analysis of competitor

Competitors are companies that their business providing similar products, that’s means they satisfy the same demand of customers in the market

Competitor consists of actual competitor and potential competitor

Ifthe sector competition is weak, company will have oppotunity to pump up price ard get more profits However, if the competition is high, highly price competition wil lead to a price war The competition will restrict profitability due to reduce of rarginal profit per turnover Thus, competition strength among companies of the sane business type will generate a big threat to the profitability In summary, rate of competition among companies of the same business type will depend on three main fectors: sector competitive structure, demand condition and high take-out barrier 24.2 Analysis of customer pressure

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business must deliever its products to the consumer, therefore, customer plays a key

role in success and reputation of a company Nowadays, a business must supply products that meet customer’s demand instead of selling their available products 2.4.3 Analysis of supplier pressure

Supplier can be considered a threat to a company when they press price increasing

or to reduce company’s profitability In contrast, it it is a weak supplier, it will create a chance for the company to press price decreasing and require high quality products The same with buyer, supplier’s requirement to the company will depend

on their relative power on the company According to Porter, supplier’s power is highest as: their product is limited, alternativable and important to the company 2.4.4 Analysis of new product pressure

Replaced products are products serving for customer’s demand, similarly to the on- going analyis business type Existance of replaced products reveals a competitive threat, it restricts high pricing, therefore there is limit for company’s profitability However, if the company has limited replaced products (in case weak competitive products) and other normal factors, that company will have chance of increasing price and getting higher profit As a result, company’s strategy will be designed to gain competitive advantage from this fact)

External Factor Assessment Sample EFAS

Step 1: Define and set a list of 10-20 factors (opportunities and threats) which play a key role in success of the company

Step 2: Giving assessment of importance of each factor by rating from 1.0 to 0.0 on the basis of each factor’s impacts (rate, time) on the current business strategy of the compnay Suitable rating can be defined by making comparison of sucessful

competitve companies and unsuccessful ones Total of this figures equivant tol Step 3: Giving assessment of each factor by rating from 4(outstanding) to | (bad) on the basis of the company’s current strategy orientation reacts to this factors So, this

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rating is for individual company, while rating at step 2 is by sector

Step 4: Multiply importace rate of each factor with its score to determine

importance score of each factor

Step 5: Plus importance score of all external factors to determine total of importance score of the company Total of importance score from 4.0 is good, 1.0 is bad and 2.5

is average value

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In Febuary 2008, Hanoi-Dien Bine Minerals and Resources Co Ltd Minerals and

Resources Company Ltd was established based on the Business License No

+ Minerals exploration, process and trading

+ Real Estate Agency

+ Real Estate Trading

Il FUNCTION, OBLIGATION AND STRATEGIC TARGET

2.1 Function of the company:

The company has function of Lead — nickel silver investigation and exploration in

area of Xa Nhe Commune, Mun Chung commune, Tuan Giao District, Dien Bien

Province

2.2 Strategic Target:

Invest to diversify product, increasing quality of product in order to build up sustainable development for the company and meet customer’s demand better and better

Concentrating on setting out Marketing strategy to be strongly competitive when the market expands for rising up quality of exported goods

Strengthening management organization model to enhance management efficiency for development of the Company in the coming time

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In the next year, the Company will expand its share in the domestic market, especially in Cities with industrial zones Further more, the Company will pay much

attention to foreign clients from China, South Korea, Taiwan, Japan, India, etc

Il ANALYSIS OF INTERNAL EVIRONMENT

Internal environmental will be analyzed based on organization structure and together with supporting centers to implement parts of works as the below chart:

Model 2.1 Implementation process and Chain of value 3.1 Analysis according to resources:

3.1.1 Organization structure of the Company

Since the Company was just established in February 2008, its organization structure

is step by step adjusted The company’s organization structure is shown in model 2.1 Current organization structure of the company is a combination of Functional Online Organization and Associated Matrix Organization In which, the Functional Online Organization is used for high level (management) and the Associated Matrix Organization is used for low level (execution) With this organization mode, the company obtains centrally control and ensures rapid decision making for execution and limit shortcoming of unique functional online organization model

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Regarding to the organization structure, Mr Nguyen Van Cuong is General Director

of the company He graduated from Geology and Mining University, Hanoi Law University and he is also a Master of Business Administration He has seniority in field of minerals exploration Formerly, Mr Cuong was Director of Rock Exploration Enterprise, Song Da Corporation Therefore he has a lot of experience

as well as relationship in this field Besides, the company’s Mine Director,

Workshop Manager is formerly Chief of Technical Dept working under his management in the former company

Thus, qualification and capacity of Company’s Board of Directors is relatively high

DEPUTY

Model 2.2: Organization Chart

Source: Administration department

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Additionally, the company maintains a structural frame consisting of functional departments to perform different tasks of the company’s chain of values

Weak point of this kind of structure is that it still apply fishborn-shaped structure for the management For example, one director in charge of certain departments, in the meanwhile, he may not be master of activities of these sector or he is not good at his

given field to be managed

Fishbone structure itself reveals several inherent weak points and one of those is the bureaucracy Each department has its own functions and duties but it is at the same time less flexible Some tasks have not been assigned to any department but contrarily some other tasks seem to be in charge of several departments in an overlapped manner Misappointing medium level managers may stagnate the operation of a certain department and consequently stagnate operation of the whole

company

3.1.2 Human resource management

As the company has just been formed since February 2008, the human resource management policy is in the progress of developing

e Labor structure of the company is shown as below:

Table 2.1: Classified by labour structure

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According to the above table, we can recognize that the female labour rate is relatively lower than man labour rate and the direct labour rate is relatively high for

a mineral exploiting and processing company

Number of indirect employees, such as the high because companies exploit the

exposed methods, mainly in mining machinery, bulldozers, trucks In addition,

companies need to develop apparatus operating parts business to ensure business operations of the Company and sustainable development

In some ways, it can be considered as an advantage of the company

Table 2.2: Labour structure classified by qualification

Table 2.3: Labour structure classified by age

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e Remuneration policy

Attractive salary, encouraging and rewarding policy may be one of the good ways to attract qualified personnel

Two ways of remuneration calculating:

For direct production worker: paid by piece wage system

For indirect production labour: Paid by working time and volume of completed work which divided into 2 parts: one part is the salary scale stipulated by gouvermental decree and the other is based on separated rate depend on job title

Table 2.4: Payroll and average income

Therefore, staffs of the company are somehow considered as qualified and competent people with research ability

Managers of the company are enthusiastic and dynamic Labour force of the company is mostly young and suitable for an exploiting and processing company especially people from 18 to 30 years old

Company has built a good recruitment policy and related documents such as Works

Regulations, Collective Labour Agreement, Corporate Bylaws, structure, functions

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3.2 Technical and technological material base of the company

Being a business unit with above mentioned functions and duties, the technical and

technological material base of the company includes:

- Office system and other office equipements and facilities which support administrat:onal and managerial work;

- Factory aad other basic facilities used for ore separating and processing like: ore separating rack, workshop, electric system, water supply system, stores, transportation system, shot-drilling system, shoveling system, pouring system, other modern facilities and staff dormitory

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- Company’s website provides customers a fast way to access and get more in‘ormation on Company itself Online recruitment is also one of the convenience and effective method Internal network helps sending emails, sharing data and resources among departments in a quick manner

3.3 Analyze company’s financial condition

From his early time, Company has been facing a lot of huge challenges from other campetitors in the market Together with the determination and diligence of managerial team and all workers, Company has gained his stability in operation just afer a short period of time

Table 2.5 Balance sheet and Income statement

Source: Financial and accounting department

GaMBA01.M05

Revenue from sales of goods and rendering of

Gross profit from sales of goods and rendering

services

- Inceptive evaluation:

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- Analyze the profitability:

- Analyze the earnings yield:

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3.4 Analysis of the manufacturing capacity of the enterprise

Fine lead-ore and fine zinc-ore are final output of selection process The output is then brought to metallurgical factory to make pig lead, pig zinc and many other products

Ore manually exploited will be enriched in processing factory and then be transported by truck to the Company stock yard Standard products will be consumed for domestic industrial demands as well as for exportation

Products of the Company are well known and highly appreciated in domestic market as well as in foreign market Company has achieved several principle contracts for the next 5 to 10 years