Business strategy for Handee limited company, 2011 - 2015

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT BUSINESS STRATEGY FOR HANDEE LIMITED COMPANY, 2011 - 2015 GROUP No.: 11 Ho Chi Mi

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CAPSTONE PROJECT REPORT

BUSINESS STRATEGY FOR HANDEE LIMITED COMPANY, 2011 - 2015

Group No.: 11

Ho Chi Minh City, 2012

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GRIGGS UNIVERSITY

GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION

PROGRAM

CAPSTONE PROJECT REPORT

BUSINESS STRATEGY FOR HANDEE LIMITED COMPANY, 2011 - 2015

GROUP No.: 11

Ho Chi Minh City - 2012

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CAPSTONE PROJECT REPORT GROUP 11

UNDERTAKING

The author group with 04 members hereby undertake that the Graduation Thesis for the program of Master of Business Administration by GRIGGS University is the researching work by our Group

We have conducted theory and related data in the Thesis and partly referred from the sources such as textbooks, curriculums, references in Vietnamese and English, as well

as from magazines, internet the practical data collected directly in Handee Limited Company, the data of opponent companies are referred from announcements uploading on their websites such as: Nike Golf, Adidas Golf Company, Nguyen Tam fashion (Foci), etc…

From these sources of document and basing on the outline approved, the author group has completed this Thesis The solutions of business strategy for Handee Co., Ltd are set forth dependently on literature review as well as intuition and experiences from all members of the Group Also through this Thesis, all members of the author group have accumulated highly evaluable experiences to establish a practical strategy for a company currently and in the future

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THANKS

On the occasion of Graduation Thesis for the training program of Global Advanced Master of Business Administration - Griggs University has been completed after one and a half years of study, the author group sincerely thanks MBA program - GRIGGS University and Handee Limited Company for facilitating us during studying process

We are grateful to the Teachers who have wholeheartedly taught and imparted the very precious knowledge to us Also we are thankful to the Teachers who have conducted the author group until completion of this Thesis

Additionally, the author group would like to express our gratitude to assistant professors who have given us the kindly supports Thanks a lot to the leadership of Handee Limited Company for the high evaluable data and information for this Thesis Finally, the author group sincerely thanks the Director Boards of the Companies those

we are working with and all family members of the author group for creating conditions and times as well as finance so that we can complete this course

Please receive from us the deep and sincere thanks

The author group

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CONTENTS

FOREWORDS 1

1 THE REASONS FOR CHOOSING THE THEME 1

2 OBJECTIVE OF RESEARCH 1

3 SCOPE OF RESEARCH 1

4 METHOD OF RESEARCH 2

5 THE PRACTICAL AND SCIENTIFIC MEANINGS OF THE THEME 2

6 STRUCTURE OF THESIS 2

Chapter I: LITERATURE REVIEW 3

1 CONCEPT OF STRATEGY AND STRATEGIC PLANNING 3

1.1 Concept of strategy 3

1.2 Strategic management 3

2 CLASSIFICATION OF BUSINESS STRATEGY 3

2.1 Levels of strategy 4

2.2 Types of strategies 4

2.2.1 Corporate-level strategy 4

2.2.2 Unit-level business strategy 5

2.2.3 Functional strategy 5

3 PROCESS OF STRATEGIC MANAGEMENT 5

3.1 Process of business strategy planning 7

3.2 Analysis of environment 7

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3.2.1 Analysis of external environment 7

3.2.2 Analysis of internal environment 8

3.3 Establishment of business strategy 8

3.4 Solutions for performing business strategy 9

3.5 Evaluating the efficiency of business strategy 9

3.6 Some tools used to evaluate and propose the business strategies 10

3.6.1 External factor evaluation - EFE 10

3.6.2 Internal factor evaluation - IFE 11

3.6.3.Competitive picture matrix (CPM) 12

3.6.4 SWOT matrix 12

3.6.5 Internal - External matrix (IE) 13

3.6.6 Quantitative strategic planning matrix (QSPM) 14

3.6.7 Some experiences for selecting the business strategy 16

4 TREND OF VIETNAM GOLF SPORT DEVELOPMENT 16 4.1 Trend of golf-court and golfer development 16

4.2 Some contents of current development of Vietnam golf market 17

CONCLUSION OF CHAPTER I… 20

CHAPTER II: ANALYZING THE OPERATION REALITY OF HANDEE CO., LTD 21

1 INTRODUCTION ABOUT HANDEE CO., LTD 21 1.1 Summary of Handee’s formation and development process 21

1.2 Company’s organizational and managerial diagram 23

1.3 Current clients and partners 25

1.4 Business and production outcomes 25

1.4.1 Working area and main products 25

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1.4.2 Revenues of Handee Co., Ltd through the years 26

2 EXTERNAL ENVIRONMENT 27

2.1 Analysis of macro environment 27

2.1.1 Impact of economic factor 27

2.1.2 Impact of political factor, policy and law 29

2.1.3 Impact of socio - cultural and population factors 29

2.1.4 Impact of natural factor 29

2.1.5 Impact of technical and technological factors 30

2.2 Analysis of micro environment 31

2.2.1 Potential competitors 31

2.2.2 Substitute products 32

2.2.3 Customers 33

2.2.4 Suppliers 34

2.2.5 Competitors within internal trade 35

2.3 Analysis of internal situation of Handee Co., Ltd 37

2.3.1 Financial ability 37

2.3.2 Management of human resources 42

2.3.3 Marketing 44

2.3.4 Product quality 45

2.3.5 Procedure of production and operation 45

2.3.6 Research and development (R&D) 46

2.3.7 Core competitive advantage 48

3- OPTIONAL TOOLS FOR THE COMPANY’S BUSINESS STRATEGY 49

3.1 External factor evaluation matrix (EFE) 49

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3.2 Internal factor evaluation matrix (IFE) 50

3.3 Competitive Picture Matrix (CPM) 51

3.4 Internal - External factors matrix (IE) 53

3.5 SWOT matrix 54

3.6 Quantitative strategic planning matrix (QSPM) 57

CONCLUSION OF CHAPTER II 60

CHAPTER III: BUILDING BUSINESS STRATEGY FOR HANDEE CO., LTD UNTIL 2015 61

1 THE GROUNDS FOR BUILDING THE STRATEGY 61

2 PREDICTION OF MARKET DEMAND 61

2.1 Demand of Vietnam golf market development 62

2.2 Predicting the revenue from golf garment products of Handee Co., Ltd from now to 2015 62

3 THE OBJECTIVE OF HANDEE CO., LTD UNTIL 2015 65

4 BUSINESS STRATEGY FOR HANDEE CO., LTD FROM NOW TO 2015 68

4.1 Concentrated growth strategy towards market development 68

4.2 Concentrated growth strategy towards market penetration 69

4.3 Concentrated growth strategy towards product development 71

4.4 Selection of strategy 72

5 SOME SOLUTIONS FOR BUSINESS STRATEGY OF HANDEE CO., LTD ….73 5.1 Solutions for human resources 73

5.1.1 Human resource management 73

5.1.2 Administrative organization 75

5.2 Solutions for marketing 75

5.2.1 Building the strategy for products 76

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5.2.2 Solutions for products 77

5.3 Solutions for finance 78

5.4 Solutions for building and developing trademark 79

5.5 Solutions for production 81

5.5.1 Solutions for materials 81

5.5.2 Solutions for production 81

5.5.3 Solutions for information management 82

5.6 Solutions for building the company’s culture 83

6 SOME RECOMMENDATIONS 86

6.1 Recommendations to the internal garment industry of golf products (Vinatex) 86

6.2 Recommendations to the State 86

CONCLUSION OF CHAPTER III 87

CONCLUSION 88

REFERENCES 89

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CONTENTS OF FIGURES

Figure I.1: Model of comprehensive strategic management 6

Figure I.2: Process of strategic planning 7

Figure I.3: Chart of micro environment (Michael Porter) 8

Figure I.4: External factor matrix 10

Figure I.5: Internal factor matrix 11

Figure I.6: Competitive picture matrix (CPM) 12

Figure I.7: SWOT matrix 13

Figure I.8: Internal - external matrix (IE) 14

Figure I.9: QSPM matrix 15

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CONTENTS OF TABLES

Figure II.1: Some logo images of Handee Co., Ltd through the years 22

Figure II.2: Organizational diagram of Handee Co., Ltd 23

Table II.3: Clients and partners of Handee Co., Ltd 25

Table II.4: Revenue statistics of Handee Co., Ltd through the years 26

Table II.5: Chart of Handee's revenue growth from 2007 to 2011 26

Table II.6: Speed of growth and inflation through the years 27

Table II.7: Chart of Vietnam's growth and inflation speed from 2007 to 2011 28

Table II.8: Business and production outcomes statement of Handee Co., Ltd in three years from 2007 to 2011 38

Table II.9: Employees disposition in accordance with functional departments of Handee Co., Ltd 42

Table II.10: Analyzing the particulars and advantages of golf products of Handee Co., Ltd 46

Table II.11: External factor evaluation matrix (EFE) of Handee Co., Ltd 49

Table II.12: Internal factor evaluation matrix (IFE) of Handee Co., Ltd 50

Table II.13: Competitive picture matrix 51

Table II.14 : Internal - external matrix of Handee Co., Ltd 54

Table II.15 : SWOT matrix of Handee Co., Ltd 54

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Table II.16: Quantitative strategic planning matrix (QSPM) 58

Table III.1: Revenues from golf garment products of Handee Co., Ltd in recent

four years 62

Table III.2: Chart of Handee's revenue growth from 2007 to 2011 63

Table III.3: Establishing the predicted revenue equation for Handee Co., Ltd

until 2015 63

Table III.4: Predicting the revenues of Handee Co., Ltd until 2015 64

Table III.5: Chart of Handee Golf's revenue growth prediction from 2012

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FOREWORDS

1 THE REASONS FOR CHOOSING THE THEME

In terms of economic integration in the region and the world currently, Vietnam has gradually affirmed the market economy under socialist orientation Facing with the business environment which is always fierce competition today, every business needs to find a suitable direction, continuously improves the business position in the market place

Along with the growth of national economy, Handee Co., Ltd has achieved many successes, contributed little to the garment industry of HoChiMinh City in particular and the country generally in the new development direction However, over the years, with the impact of the global economic downturn, the business environment poses more challenges If just relying on the advantages and business experience as before, Handee will not be viable and continue to grow Wishing to contribute in finding a way for maintaining Handee’s position in the future, and applying the

knowledge learned in MSc programs, we chose the research topic of "Business strategy for Handee Limited Company, 2011-2015” for our Economic Master

Thesis

2 OBJECTIVE OF RESEARCH

Basing on analysis of the micro and macro environments, as well as the company’s production and business operation status, Handee can find the appropriate business strategy for maintaining its position and constantly growing, becomes one of the leading prestigious enterprises in Vietnam Golf garment industry in the future

3 SCOPE OF RESEARCH

 Space of research: Garment market, in which, focusing on study of

garment market for Golf products in HoChiMinh City and other provinces nationwide

 Time of research: The topic focuses on researching the production and

business status of Handee Co., Ltd in 2011- 2012

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 There are many approaches to build a business strategy for an enterprise The research contains a scientifically theoretic significance gathered from various sources for a business strategy formation on the basis easy to understand, easy to use

 Practical significance:

 Handee Co., Ltd has 100% private capital Therefore, we will analyze to identify the strengths and weaknesses, the core competences forming competitive advantage of the company, the opportunities and challenges currently as well as in the future which help the company’s leaders to develop strategies directly

 The thesis will provide Handee Co., Ltd with the quantification of influence level of the factors that has impacted on the business

6 STRUCTURE OF THESIS

Apart from the opening, conclusion and appendices, the thesis structure consists

of three chapters:

 Chapter1: Literature review

 Chapter 2: Analyzing the real status of production and business operation of

Handee Co., Ltd

 Chapter 3: Building the business strategy for Handee Co., Ltd from 2011 to 2015

Because of limitation of knowledge, condition and ability, our thesis is inevitable shortcomings, Group 11 looks forward to receiving comments and suggestions from the Teachers and Defense Council so that the thesis will be more perfect

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Chapter I: LITERATURE REVIEW

1 CONCEPT OF STRATEGY AND STRATEGIC PLANNING

to be followed while using these resources

 For Alfred Chandler, "business strategy involves the determination of basic long-term objectives of the enterprise, and chooses the way or course of action and allocates the resources to implement that goal”

 According to the definition of Dr Nguyen Thi Lien Diep, "strategy is the overall action plan towards the implementation of objective set up The strategy is not to specifically point out how can achieve the objective because it is the duty of a multitude of assistance programs, other functional strategies Strategy just creates a framework to guide thinking and action”

1.2 Strategic management

 Strategic management is the process of studying the environment currently

as well as in the future It plans the goals of the organization, puts forward, organizes, implements and supervises the implementation of decisions to achieve those goals in the current environment and in the future

2 CLASSIFICATION OF BUSINESS STRATEGY

There are many different strategies in an enterprise, depending on the level, the approach we can classify business strategy as follows:

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2.1 The level of strategy

In view of the levels, an enterprise has at least three levels of business strategies:

 Corporate-level strategy: Strategy towards the purpose and overall scope of the organization

 Unit-level business strategy: Relating to the successful competition manner

on the specific markets

 Functional strategy (or operational strategy): It is the strategy which helps unit-level and corporate-level strategies to implement effectively by the components in terms of resources, the human process and the necessary skills

In the globalized environment of fierce competition, the borders between the countries have been largely eliminated so that a four-level strategy has appeared It

 Strategic integration group

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2.2.2 Unit-level business strategy

Unit-level business strategy relates to the successful competition manner in the specific markets

As for Michael E Porter, there are three general competitive strategies at business unit level:

 Cost leading strategy (low price and best price)

 Product differentiation strategy

 Gathering strategy

2.2.3 Functional strategy

Functional strategy is the strategy of functional departments such as: marketing, finance, human resources, etc These strategies help raising the company’s operation efficiency and assist the business strategy, corporate-level strategy to implement effectively

3 PROCESS OF STRATEGIC MANAGEMENT

Process of strategic management consists of three phases:

 Strategic planning phase

 Strategic performance phase

 Strategic assessing phase

Fred R David has made the model of comprehensive strategic management as Figure 1, therein, the strategic planning phase includes the steps of defining vision, mission, strategic objectives, then carrying out analysis of the external environment factor to identify opportunities and risks, analysis of internal environment to put forward the strengths and weaknesses of the business, from which to determine the

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business objectives, establish the long-term objectives and select the strategies for implementation Strategic performance phase will include the distribution of resources to make the annual goals and policies The last stage is measure and evaluation of the strategy implementation

Figure I.1: Model of comprehensive strategic management

ơ

Distribute the resources

Redefine business objective

Analyze internal environment

Identify the strength and weakness

ơ

Select the strategies for implementation

ơ

Set forth the policies

Strategic planning Strategic performance Evaluation

Measure and evaluate the performance

of strategy

ơ

Establish long-term objective

ơ

Establish annual objective

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3.1 Process of business strategy planning

According to Fred R David, the process of business strategy planning consists of three phases: input phase, integration phase and decisive phase as figure I.2:

Figure I.2: Process of strategic planning

Phase 1: Input phase

Phase 2: Integration phase

Matrix of Boston consulting group (BCG)

external matrix (IE)

Internal-Matrix of main strategy

Phase 3: Decisive phase

Quantitative strategic planning matrix (QSPM)

3.2 Analysis of environment

The enterprise’s operational environment includes the internal and external environments, it affects directly or indirectly to the existence and development of enterprise Thus, studying the internal environment and external environment is extremely necessary in strategic planning for the enterprise

3.2.1 Analysis of external environment

 Analysis of macro environment:

Analyzing the external environment helps us to identify the opportunities and risks from which the enterprise will make a relevant strategy Analyzing the external environment through the environments:

 Economic environment

 Governmental, politic and law environment

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 Technical - technological environment

 Cultural - social Environment

 Population environment

 Analysis of micro environment: Michael E Porter, a professor of business

strategy from Harvard has given a five-force model of competition as the following figure I.3:

Figure I.3: Chart of micro environment (Michael Porter)

Potential competitors

Competitors of the same trade -Intensity of competitors

CustomersSuppliers

Substitute products

Price squeeze from suppliers

Risk of market share reduced due to new competitors

Price squeeze from customers

Risk from substitute products and services

3.2.2 Analysis of internal environment

In every company, there are always different strengths and weaknesses in business units The strengths and weaknesses of the internal environment with opportunities and threats in outside and with the mission statement are the grounds for setting up the goals and strategies of the company The elements of the internal environment consist of finance, management, marketing, human resources, production management and operation

3.3 Establishment of business strategy

Depending on the enterprise’s target, external environment and internal status, its business strategy is set up with the following tenors:

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 Identifying and selecting the opportunities which can help the enterprise achieve its business target

 Selecting the target market

 Selecting products, services to supply the target market

 Building a Marketing-mix strategies for the market and products, service selected: product strategy, prices strategy, distribution strategy, promotion strategy

3.4 Solutions for performing business strategy

For effective implementation of business strategy which has been set up, the enterprise should have the solutions for production management, business management; for human resources, finance, to make the strategy That is the arrangement, sort of company’s resources to successfully implement the optional business strategy, namely:

 Arranging the organizational structure accordingly

 Reasonable distribution, maintenance and development of human resource

 Allocation of financial resources

 Building a model of production and operation scientifically and effectively

3.5 Evaluating the efficiency of business strategy

The evaluation of business strategy effective or not is very important A business strategy is considered effective when it is consistent with the reality of the business and socio-economic situation; it may as well take advantage of the opportunities to achieve the objectives that the enterprise set out The evaluation of business strategy includes the following steps:

 To review and examine the appropriateness of the business strategies before

implementation

 To assess the effects of production and business activities of the enterprise

by every implementation phase, in order to detect its flaws, defects, so that

we can adjust, modify, supplement in time

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3.6 Some tools used to evaluate and propose the business strategies

For performing the strategic planning, we can apply various methods and tools of strategic planning This thesis only has a selection to use some tools below that we think they are useful for the developmental strategic planning of Handee Co., Ltd

3.6.1 External factors evaluation-EFE

The construction of external factor evaluation matrix will help us to summarize and quantify the influence of external environmental factors to the enterprise, it affects the enterprise’s production and business activities; including the factors such as opportunities and challenges to the enterprise

To build the matrix, we proceed to make a list of all the external factors that affect the company’s operation Assess the importance of each factor by weights; the sum

of the weights of all the elements equal to 1 The classification shows the respective importance of those factors for success in the company’s trading

Evaluating the importance of each factor by sorting the elements from 1 to 4, among them, number 4 is that the company has the best response; 3 is above average, 2 is average and 1 is the lowest These levels are based on the company’s efficiency of strategy

Next is to determine the score on importance of each factor by multiplying the important degree with the corresponding classification score After that, sum up the total critical scores for each variable to determine the total important scores for the company; 4 is the highest and 1 is the lowest, and the average is 2.5 points

If total important scores are 4, it shows that the company is taking good advantage

of external opportunities and better control or minimizes threats from the outsider to the company If total score is 1, it indicates that the company does not seize the opportunities and can not reduce the threats from the external environment

Figure I.4: External factor matrix

External

environment factors Important degree Classification Important score List of external

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factors

-

Total

3.6.2 Internal factors evaluation -IFE

The construction of internal factor evaluation matrix will help us to summarize and evaluate the important strengths and weaknesses of the functional business parts It affects the enterprise’s production and business activities

To build the matrix, we proceed to make a list of all the internal factors that affect the company’s production and business activities, as defined in the internal enterprise evaluation Assessing the importance of each factor by weights, the sum

of the weights of all the elements is equal to 1 The classification shows the respective importance of those factors for success in the company’s trading

Evaluating the importance of each factory by sorting the elements from 1 to 4, among them, number 4 is that the company has the best response; 3 is above average, 2 is average and 1 is the lowest These levels are based on the company’s efficiency of strategy

Next is to determine the score on importance of each factor by multiplying the important degree with the corresponding classification point After that, sum up the total critical scores for each variable to determine the total important scores for the company; 4 is the highest, 1 is the lowest, and the average is 2.5 points

If total important scores are 4, it shows that the company has much strength, and possibly overcome the weaknesses Conversely, if the total score is 1, indicating that the company has no strength and so many weaknesses that can not be overcome

Figure I.5: Internal factor matrix

Internal environment factors Important

degree Classification

Important score List of internal factors

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-

Total

3.6.3 Competitive picture matrix (CPM)

Building competitive picture matrix helps the company identify the competitors, and the advantages, shortcomings so that the company will have a suitable business strategy

This matrix includes all the elements inside and outside of the enterprise; it has the importance to the success of the enterprise In the competitive picture matrix, the competitors are also considered important and calculate the total important scores Then, we compare the total critical scores of these opponent companies with the sample competitive company Thereby, we will have more information to develop business strategy for the company

Figure I.6: Competitive picture matrix (CPM)

Important degree

to become the business strategies We have the following SWOT matrix:

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Figure I.7: SWOT matrix

OPPORTUNITIES (O) THREATS (T)

STRENGTHS (S)

Combine S-O Promote the internal strengths to utilize the opportunities

Combine S-T Promote the internal strengths to avoid the external threats

WEAKNESSES (W)

Combine W-O

Overcome the internal weaknesses to utilize the opportunities

Combine W-T

Overcome the internal weaknesses to avoid the external threats

From SWOT matrix, it will help us to form four types of strategies:

 Strategy of strength - opportunity (S-O): Promote the internal strengths to utilize the opportunities

 Strategy of weakness - opportunity (W-O): Overcome the internal weaknesses to utilize the opportunities

 Strategy of strength - threat (S-T): Promote the internal strengths to avoid the

external threats

 Strategy of weakness - threat (W-T): Overcome the internal weaknesses to

avoid the external threats

3.6.5 Internal - External matrix (IE)

Analysis of internal - external matrix is putting the company’s departments into the picture with 9 cells as the following image:

IE matrix is built basing on the essential factors:

 Total important scores of internal factor evaluation matrix (IFE)

 Total important scores of external factor evaluation matrix (IFE)

We can read this matrix as follows:

 Total scores from 1.00 to 1.99: showing the weakness

 Total scores from 2.00 to 2.99: showing the average

 Total scores from 3.00 to 4.00: showing the strength

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Figure I.8: Internal - external matrix (IE)

Total important scores of IFE matrix

Average (2.00-2.99)

Weak (1.00-1.99) High

The components of IE matrix comprise as follows:

 Development and construction (cells I, II, IV): suitable strategies are

concentrated growth (market penetration, market development, product development); integration strategy (forward integration, backward integration and horizontal integration)

 Grasp and maintenance (cells III, V, VII): suitable strategies are market penetration and product development

 Assemblage and elimination (cells VI, VIII, IX): cut down, liquidate and eliminate some ineffective parts of the company

3.6.6 Quantitative strategic planning matrix (QSPM)

QSPM matrix is to evaluate and rank the strategic methods, from that point we have the ground to select the best strategy for the enterprise

This matrix uses all the information, data from the above-said matrices consisting of: IFE matrix, EFE matrix, competitive picture matrix, SWOT matrix,

For developing a formation of a QSPM matrix, we should pass six steps as follows:

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Total score

Attractive score

Total score

Attractive score

Total score

Note: Classify the external factors: 1 - less response, 2 - average response, 3 -

response is higher than average, - 4 - the highest response Classify the internal factors: 1 - the weakest, 2 - the least weakness, 3 - the least strength, 4 - the strongest

QSPM matrix has a lot strong points such as aid in combining the suitable factors inside and outside with the decisive process, the groups of strategies can be studied continuously or concurrently, no restriction of the number of strategies appraisable, but it also has some limitations as implementation of QSPM matrix requires the intuitional consideration and bases on experience The discussion between the administrators, the staffs in the process of analysis and selection of strategy can make many different opinions appeared

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3.6.7 Some experiences for selecting business strategy

Building a business strategy for the enterprise is not simple because it depends on many factors relevant to the prediction work in the past, in the present, as well as in the future Additionally, it also depends on industry, business field of the enterprise In learning about it, we can draw some experiences for building business strategy as follows:

 First, we should have a suitable procedure for building business strategy

 The objective proposed must be consistent with the enterprise’s situation and the external environment factors

 Gathering, analyzing the information to identify the enterprise’s advantages that to be developed, finding out the weaknesses that to be overcome

 Assessing the enterprise’s opportunities and the risks on the market

 Concentrating on the strategies which can bring about the highest efficiency for the enterprise Ensuring the unity between the strategies and the solutions

4 TREND OF VIETNAM GOLF SPORT DEVELOPMENT

4.1 Trend of golf - court and golfer development

In the process of national development, formation and development of golf-courts, ecologic resorts serving for the higher demand of people are the necessary things According to insufficient statistics, currently, Vietnam has approximately over 60 golf-courts (among them, 36 courts are in operation, 19 courts are in construction,

13 courts are granted investment certificates, 27 courts are approved investment policies, 03 courts are expelled from planning due to breach of norms and conditions of golf-court formation)

In 2002, there were 6 golf-courts on a nation scale and increased to 36 golf-courts in

2011 There were about 1,500 golfers in 2002; currently they are 15,000 in total Through statistics we see that the rate of golfers increases 10 times by 10 years It proves that golf is a sport which many people are interested and take part in

Mr Bui Quang Vinh, Minister of Vietnam Investment and Planning Department

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said, the number of golf-courts planned until 2020 would be 90 courts disposing in 34/63 province and cities Also according to the Minister, most of golf-courts in operation have brought fairly good effect, considerable contribution to the budget, creation of employment for a lot of local people and no influence on ecologic environment

As prediction, currently, approximately 100,000 persons from all the country have enough economic condition to qualify for playing golf sport; and among these 100,000 persons, approximately 5,000 persons play golf frequently Additionally, there are an increasing number of foreign tourists coming to Vietnam and play golf Many investors are interested in and pay attention to investing in golf-court project

in accordance with the model of “resort – golf-court – ecologic tourism area”

Specifically, Vietnam has 14 golf-courts in frequent operation, consisting of:

1- Kings’ Island Golf Resort and Country Club – Dong Mo, Ba Vi, Ha Tay;

2- Chi Linh Star Golf and Country Club – Chi Linh, Hai Duong;

3- Tam Dao Golf resort – Hop Chau, Tam Dao, Vinh Phuc;

4- Ha Noi Golf Club – Soc Son, Ha Noi;

5- Dam Vac Golf Course – Vinh Yen, Vinh Phuc;

6- Van Tri Golf Club – Ba Dinh, Ha Noi;

7- Vietnam Golf and Country Club – District 9, HoChiMinh City;

8- Song Be Golf Resort – Thuan An, Binh Duong;

9- Long Thanh Golf Club and Residential Estate – Long Thanh, Dong Nai;

10- Bongchang Dong Nai Golf Resort – Trang Bom, Dong Nai;

11- Dalat Palace Golf Club – Da Lat, Lam Dong;

12-Ocean Dunees Golf Club – Phan Thiet, Binh Thuan;

13- Paradise Golf Club and Beach Resort – Vung Tau;

14- Phoenix Golf Course – Luong Son, Hoa Binh

4.2 Some contents of current development of Vietnam golf market

 Characteristics of golf sport

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Golf is considered as a sport selective about players It has both particular rules on dressing and strict requirements about necessary implements for the players Golf sport has been considered as an aristocratic pastime for the successful entrepreneurs since very long time

Though complying with general requirements, the entrepreneurs still know to create their own styles by themselves Timber clubs, metal clubs, spoke clubs, driver clubs

or light clubs are selected carefully Golf balls, gloves or shoes, clothes should be suitable so that the golfers feel the most comfortable and easy to hole exactly and effectively

 Necessary implements for golf sport

Golf sport requires too much for necessary implements from golf clubs, golf balls to clothes in coming to the court such as shoes, helmets, glasses, the golfers enable

to select the golf-club bags corresponding to their own styles, number of necessary clubs and balls without compulsiveness For dress in playing, jeans trousers, felt sport clothes and pulled T-shirt are unacceptable A set of tools such as a set of golf-clubs (14 clubs), golf-club bag, gloves with the prices at least about 5,000 USD, including:

 Golf-club bag: Golfers can select the types of golf-club bags suitable to their

own styles The bag set which can contain fully 14 clubs with trays for raincoat, shoes and towel, is professional and ideal one for selection

 Set of golf-clubs: Just bring in the court a set of golf-clubs with 14 clubs

maximum The golfers do not necessarily have full of the clubs; only six clubs are enough including one timber club number 5, 3 metal clubs number

4, number 6 and number 8, one spoke club and one light club

 Golf balls and related implements: two basic types of golf ball include

three patterns of hollow ball and two patterns of solid ball There are other related implements along with golf ball such as ball wiper or ball sponge for marking ball points or ball piles, The Mercedes-Benz firm has woolen ball wipers with high quality, dimension of 16 x 24 inches and price of 15 USD

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 Other implements: Dress is also one of implements should be attended

when taking the field Most of golf-clubs have the rules to prohibit wearing jeans, felt clothes and pulled T-shirt In facilitation, golfers should choose wearing the shoes which make soft feeling for the heels and ankles; glasses should be suitable to the space, light at golf place; helmets will protect the golfers from light and sunlight; raincoats, umbrellas are always ready; and some standby gloves will help golfers having dry gloves at all times,

Products for this sport are displayed in many sport shops or stores specialized in golf implements such as Golflink at No 263 Giang Vo, Ba Dinh Ha Noi; Golf Classic at No 541 Kim Ma, Ba Dinh, Ha Noi,

 Competition for supplying Vietnam golf garment products and facilities

Due to the strong development of Vietnam golf sport in recent years, the market supplying facilities and garment products for Vietnam golf is also quite diversiform development Currently, Many famous brand names of the world specializing in golf garment products and facilities have been appearing in Vietnam market currently such as Adidas Golf, Nike Golf Particularly within the country, as it is a new sector, there are few enterprises to aim at their business and production activities in this field such as: Handee Co., Ltd, Nguyen Tam Fashion Company (Foci) for example; and other textile and garment companies like Garment 10, Thanh Cong, Viet Thang, Phong Phu, intend to penetrate into this market

In considering the overall Vietnam golf market, the biggest competitor governed Vietnam golf market currently is Adidas Golf Adidas has become a big brand name for long time It has been considered as a famous trademark in the world market Its modern technology of golf garment production is ranked the 2nd post all over the world Currently, Adidas is a biggest foreign business specializing in golf tools and golf garment products of Vietnam golf market It has a large scale of organizational mechanism, financial ability, business management level, speciality and multiform products which is manyfold larger than Handee Golf and other domestic entrepreneurs Adidas Golf has a wide network of shops and agents in HoChiMinh City, Ha Noi, Da Nang and other provinces all over Vietnam country

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CONCLUSION OF CHAPTER I

Strategies are the means to reach the long-term objectives Strategic planning is a systematic procedure to define the business strategies which are used to strengthen the enterprise’s competitive position The necessary steps for the enterprise’s strategic planning:

 Researching on the operational environment of the enterprise consists of external environment and internal environment

 Internal environment includes macro environment and micro environment Researching the external environment helps to identify the opportunities and risks that the enterprise can meet in its production and business activities

 Internal environment consists of the intrinsic factors of the enterprise

 Researching on internal environment helps to define the strengths and the weaknesses of the enterprise

 Defining the purpose, target that the enterprise needs to achieve in the long

term

 Building the strategies for the enterprise in order to achieve the long-term objectives The construction of strategy depends on the ground of environmental analysis and objectives of the enterprise with the assistant tools such as external factor evaluation matrix (EFE), internal factor evaluation matrix (IFE), competitive picture matrix (CPM), internal - external matrix (IE), competitive picture matrix, SWOT matrix, (QSPM)

matrix

 Talking about the competitive market of Vietnam golf sport, in which, the author group emphasizes the features of branch, necessary implements for golf sport and competition between the suppliers of garment products and tools for Vietnam golf

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CHAPTER II: ANALYZING THE OPERATION REALITY

OF HANDEE CO., LTD.

1 INTRODUCTION ABOUT HANDEE CO., LTD

1.1 Summary of Handee’s formation and development process

 Since 2004, it was established under the name of NGUYEN GARMENT

MANUFACTURING CO., LTD specializing in sport fashion products

“made in Vietnam” under Handee trademark which essentially distributed in

the North, then in the following years it is gradually widening the distribution in the nationwide

 In 2007 it changed the name into HANDEE INVESTMENT JOINT

STOCK COMPANY with aim at making the trademark of Handee fashion

clothes outstanding The company’s products become abundant and famous under Handee trademark

 In 2008 the company opened more branches in HoChiMinh City for better service and management of the Southern market Additionally, it developed many other fields such as advertisement printings, manufacture of promotional products and has attracted a lot of large and famous clients as Honda Vietnam Company, Pepsico, Samsung Electronic Company, Toyota, Castrol, Bp, etc…

 In March 2010, it converted its business type from HANDEE

INVESTMENT JOINT STOCK COMPANY into HANDEE CO., LTD in

accordance with the Certificate of Business Registration No 0101573335

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 Transaction name and capital structure of Handee: HANDEE CO., LTD

is an enterprise of 100% domestic-invested capital with chartered capital of

10,000,000,000 dong (ten billion dongs) and to be converted from HANDEE

INVESTMENT JOINT STOCK COMPANY which established on Dec

21, 2007 under the Decision No 0103021328 by The Investment Planning

Service of Hanoi City

 Company’s name: CONGTY TNHH HANDEE

 Transaction name: HANDEE LIMITED COMPANY

 Abbreviated name: HANDEE Ltd, Co

 Head office address: 7/183 Dang Tien Dong St., Dong Da District, Hanoi City

 Tel: 04.35378622 - Fax : 04.35378623

 Tax code: 0101573335

Branch in HoChiMinh City

 Branch’s name: HANDEE LIABILITY BRANCH IN HOCHIMINH

(HNC)

 Address: 16 Hoa Su St., Ward 2, District Phu Nhuan, HoChiMinh City

 Tel: 08.35178633 - Fax : 08.35178634

 Tax code: 0101573335-002

 Logo of Handee Co., Ltd

Figure II.1: Some logo images of Handee Co., Ltd through the years

 Logo of the Handee year 2011

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 Logo of the Handee year 2011

1.2 Company’s organizational and managerial diagram

Handee Co., Ltd is organized and operated under Vietnam’s Law of Business, other rules related and its charter which has been unanimously approved by the Member’s Council

Figure II.2: Organizational diagram of Handee Co., Ltd

GENERAL CORPORATION

GENERAL DIRECTOR

Deputy General Director

BRANCH IN HOCHIMINH

ning Dept

Desig- Accoun- ting Dept

Organ- tion Dept

Produc-Delivery Dept

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The company’s current organizational structure consists of the following departments:

General Director: As the one who is entitled to act on behalf of the Company to

decide all important matters related to the company’s target policy He is also responsible for setting up, operating all daily business and production activities of the company

 Deputy General Director: As the one who assists the General Director, to be

appointed by the General Director and assigned to be in charge of controlling and operating the activities within the company’s fields, gives the General Director a hand in building production plans monthly, quarterly, annually in the company, balances the tasks, plans to assign the workshops, teams, gives production guideline everyday, every week, every month…

 Finance-accounting department: Helps the General Director direct

accounting and statistical works, inspects and controls the company’s financial work at the same time, responsible for administration of capital, fund, properties, preserves and uses the company’s capital effectively, making the balance sheet quarterly, annually to the upper organ, tax department and other objects

 Administrative organization Department: Responsible for organizational

work, administrative work, protection, security, health… namely labour assignation, build of regulations and rules, working discipline…

 Designing department: Responsible for designing of product styles suitable

to customers’ needs and market tastes

 Production department: Looks for source of commodities, makes the plans

to sign the economic contracts on supplying raw materials for production and products consumption Responsible for quality inspection, seriously complies with decision and guidance from the superiors about product

quality control Marketing department: Responsible for introduction and

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popularization of products to the consumers Builds and develops the brand, brings the brand to the consumers and accepted

 Sales department: Responsible for looking for the source of customers,

operates entire the activities of sale department Responsible for the business operation outcomes, makes the strategic plan for business development

 Transportation department: Transports raw materials and merchandises on

customers’ demands

1.3 Current clients and partners

Table II.3: Clients and partners of Handee Co., Ltd

No Name of clients No Name of clients

1.4 Business and production outcomes

1.4.1 Working area and main products

Currently Handee Co., Ltd has two working fields such as:

 For production: Printings and services related to printings; manufacturing and processing clothes; styling and printing design

 For commerce: Trade in equipment and materials of advertisement; commercial brokerage and promotion, goods consignment agent

Handee’s main products: manufacture T-shirts, shirts, uniforms for office staffs, safety working uniforms, hats, kit-bags, handbags, umbrellas, other leather gifts, etc…

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However, within the scope of this thesis, we just focus on researching on garment production and trade to meet the demand of Golf playing in Vietnam Therefore, Golf clothing products of Handee include some typical types as follows: Golf-jacket, golf trousers, golf sun-proof sleeves, golf umbrellas, golf-club bags, Boston bags… These Golf clothing products made essential incomes for Handee Co., Ltd

in the past time

1.4.2 Revenues of Handee Co., Ltd through the years

Table II.4: Revenue statistics of Handee Co., Ltd from 2007 to 2011

Unit: billion dongs

Table II.5: Chart of Handee’s revenue growth from 2007 to 2011

Chart of Handee’s revenue growth from 2007 to 2011

(2,000,000,000)

2,000,000,000

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2 ANALYSIS OF BUSINESS AND PRODUCTION ENVIRONMENT:

EXTERNAL ENVIRONMENT

2.1 Analysis of macro environment

2.1.1 Impact of economic factor

The first factor of economic environment is economic growth In recent years, our

country always gets the positive growing speed, however, development speed is not equal, constantly up and down due to the general economic fluctuation all over the world Especially, in 2007, the economy of our country has the highest speed of economic growth in 11 recent years (8.48%)

Table II.6: Statistics of Vietnam’s growth and inflation speed from 2007 to 2011

No Years GDP growth speed Inflation

From the statistical table (Table II.6) of Vietnam’s growth and inflation speed from

2007 to 2011, the author group will express it in the following chart:

Table II.7: Chart of Vietnam’s growth and inflation speed from 2007 to 2011

Chart of Vietnam’s GDP growth and inflation

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Through the above data table, we see that economic scale grows up, life of people increases, average income per capita in 2011 on exchange rate is 1,300 USD/person Thus, consumption demand is quickly increasing Currently, purchasing power of domestic market goes up 15%/year This is the great advantage for available clothing industry, especially, for Golf Vietnam products

 For inflation: From 2007, the speed of consumption price increase is

12.63%, higher than GDP increasing speed and highest in comparison with increasing speed of 15 years before With the particularity of ready-made garment industry, for supply as use of many workers while the prices increase the manpower prices increase too (living cost, salary increase), the entrepreneurs are full of hardships Along with those prices of raw materials also rise up, source of ready-made garment is essentially imported (70%) Another factor that has a considerable impact as loan interest rate increases 15% per year while the entrepreneurs are depending much on this capital

sources for maintaining business operation

These are input factors affecting the supply of ready-made garment, as for demand, facing with the price storm, consumers have more ponderation on purchasing goods, with ready-made golf clothes therein

 For the exchange rate: Ready-made garment industry is major in export of

products, thus the fluctuation of currency market impacts strongly on the production activities of ready-made garment entrepreneurs Recently, prices

of materials and commodities on the market are increasing strongly, only US dollar unstable With one dollar collected from export, the enterprise will lose from 500 to 600 dongs

As a result, economic environment has advantage factor and difficulties of economic growth accompany with inflation Therefore, demand of ready-made high-class commodities as Golf will highly increase, it is a feature of demand that the entrepreneurs should pay attention

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