Xác định kế hoạch chiến lược kinh doanh của công ty XNK thủ công mỹ nghệ ĐONG THANH

Luận văn tốt nghiệp MBA Xác định kế hoạch chiến lược kinh doanh của công ty XNK thủ công mỹ nghệ ĐONG THANH DETERMINE STRATEGIC PLANNING BUSINESSOF DONG THANH HANDICRAFTS IMPORT AND EXPORT CO.,LTD NINH BINH VIET NAM Analysis of macro environment Analysis of economic environment Analysis of the influence by political conditions . Analyzing the change in law and policy Analyzing the change in social conditions Analyze influences of science – techniques – technology

LUẬN VĂN

Xác định kế hoạch chiến lược kinh doanh của công ty XNK thủ công mỹ

nghệ ĐONG THANH

DETERMINE STRATEGIC PLANNING BUSINESS

OF DONG THANH HANDICRAFTS IMPORT AND EXPORT

CO.,LTD - NINH BINH - VIET NAM

CONTENTS INTRODUCTION 6

1 The subject imperativeness 6

2 Researching Purpose of the theme 7

3 Object and scope of research 8

4 The scientific and practical meaning of the topics 8

4.1.Theoretically: 8

4.2 Reality: 8

5 Structure of the capstone project: 8

Chapter I: The basically theoretical issues about business strategy 8

Chapter II: Status of the business strategy of the Dong Thanh Import and Export Co Ltd., 8

Chapter III: Determine strategic Planning Business of the Dong Thanh Import and Export Co Ltd., 2015 8

CHAPTER I: BASIC THEORY IN THE BUSINESS STRATEGY 9

1.1 An overview of business strategy 1.1.1 Concept and characteristics of the business strategy 9

1.1.1.1 Concept of business strategy 9

1.1.1.2 Highlights of the business strategy 10

1.1.2 Accessibility - level business strategy: 10

1.1.2.1 The point of access to the business strategy of the company: 10

1.1.2.2 The levels of the business strategy of the company 11

1.1.3 The process of building business 13

1.2 Identify vision, mission and values: 17

1.3 Analysis of the base to build strategies 17

1.3.1 Analysis of macro environment 17

1.3.1.1 Analysis of economic environment 18

1.3.1.2 Analysis of the influence by political conditions 19

1.3.1.3 Analyzing the change in law and policy 19

1.3.1.4 Analyzing the change in social conditions 19

1.3.1.5 Analyze influences of science – techniques – technology 21

1.3.2 Analize the industry environment 21

1.3.2.1 Analyze competitors 23

1.3.2.2 Analyzing pressure of customers 25

1.3.2.3 Analyze pressure of supplier 25

1.3.2.4 Analysis of pontential competitors: 26

1.3.2.5 Analysis of pressure of new product for replacement 28

1.3.3 Internal analysis of companies 28

1.3.3.1 Analysis of production capacity 28

1.3.3.2 Analysis of technogical knowledge 29

1.3.3.3 Analysis of financial capacity for innovation and development 29

1.3.3.4 Analysis of management capacity 30

1.3.4 Table of general SWOT analysis 30

1.4 Set up and select business strategy 31

1.4.1 Competitive strategies: 31

1.4.1.1 General strategy: (General strategy) 31

1.4.1.2 Part strategies 32

1.4.2 Strategy selection (GREAT) 33

1.4.2.1 Orientation to select strategies: 33

1.4.2.2 Methods of selecting strategic plans 33

1.4.2.2 The most effective strategy selection: 35

1.5 Strategy –oriented business implementation organization 36

1.5.1 Business Organization structure: 36

1.5.1.1 Enterprise structure 36

1.5.1.2 Organizational structure and business management 36

1.5.1.3 Requirements for organizational structure management 36

1.5.1.4 Factors affecting management organization structure 37

1.5.2 Test and quality evaluation: 37

CHAPTER II: THE CURRENT SITUATION OF BUSINESS OPERATION DONG THANH HANDICRAFT ART ARTICLES IMPORT AND EXPORT LIMITED COMPANY 39

2.1 Overview of art emberoidery market in Vietnam: 39

2.1.1 Overview of traditional craft: 39

2.1.2 The market and current situation of import and export: 40

2.1.3 Important factors helping handcraft industry develop: 41

2.2 The business operation of Dong Thanh Import & Export Company Limitted 43

2.2.1 Establishment and development: 43

2.2.2 Organizational structure: 43

2.2.3 Human resources: 45

2.3 Fact on operation and development process of Dong Thanh handicrafts Import & Export Co., Ldtin period 2002 - 2008: 45

2.4 Analysis of external environment: 46

2.4.1 Analysis of macro environmental: 46

2.4.1.1 Economic factors: 46

2.4.1.2 Factors of political and law environment: 48

2.4.1.3 Factors of technical environment: 48

2.4.1.4 Factors of cultural and social environment: 49

2.4.2 Micro-factors 49

2.4.2.1 The pressure of customers: 49

2.4.2.2 Competitors: 50

2.4.2.3 The pontential competitors: 55

2.4.2.4 Suppliers: 56

2.4.2.5 New substitute products: 56

2.5 Analyzing the internal environment factors affecting to the development of Company: 56

2.5.1 Human resource: 56

2.5.2 Marketing Strategy 57

2.5.2.1 Products: 57

2.5.2.2 Price: 58

2.5.2.3 Distribution: 59

2.5.2.4 Advertisement and sale promotion: 59

2.5.2.5 Financial and Accounting: 59

2.5.2.6 Research and development 60

2.6 Mission and Vision: 63

2.7 Analysus the strategy targets: 63

2.8 Evaluation of strategy choices: 64

CHAPTER III: DETERMINE STRATEGIC PLANNING BUSINESS OF ĐÔNG THÀNH HANDICRAFTS IMPORT AND EXPORT Co.Ltd TO THE YEAR 2015 65

3.1 Building the development objectives of Dong Thanh Company to the year 2015 65

3.1.1 The development strategy -oriented points of Dong Thanh Company 65

3.1.2 Building the development oriented objectives of Dong Thanh Company to the year 2015 65

3.1.2.1 Analysing the implementation of several key indicators in the past time 65

3.1.2.2 The oriented development of fine art embroidery to the year 2010 66

3.1.2.3 Building the development oriented objectives of Dong Thanh Company to the year 2015 66

3.2 Buiding the strategy of Dong Thanh Company to the year 2015 68

3.2.1.1 The general strategy: 68

3.2.1.2 Overall management strategy: 69

3.2.2 A number of strategic methods of basic functions to implement successfully the business strategies: 69

3.2.2.1 Marketing - Mix: 69

3.2.2.2 Finance: 71

3.2.2.3 Human resource: 71

3.2.2.4 Production: 71

3.2.2.5 Research and Development: 72

3.3 Proposals for successful stratefies implementation: 72

CONCLUSION 73

DETERMINE STRATEGIC PLANNING BUSINESS

OF DONG THANH HANDICRAFTS IMPORT AND EXPORT

CO.,LTD - NINH BINH - VIET NAM

INTRODUCTION

1 The subject imperativeness

International economic integration is a key factor for socioeconomic development of any country In the context of regional and global integration are developing both depth and breadth, the strengthening of cooperation with the outside world will open up significant opportunities and bring benefits for long-term socioeconomic development, especially in the field of trade, investment and technological transfer

Vietnam economy is currently running in accordance with market mechanism with management of Government, gradually integrating into the regional and global economy During the past time, Vietnam has strong ties to expand bilateral economic and multimedia goods; development investment relations with about 180 countries and territories, participating religion and international commercial co-operation organizations and institutions such as ASEAN - AFTA, ASEM, APEC, and WTO Participating in the process of internationally economic integration, one could create great opportunities for companies to expand markets to acquire advanced management experience and application of modernly scientific and technological achievements On the other hand, the participation of internationally economical integration, Vietnam must make commitments to the international community as opening the domestic market, tariff reduction This increased pressure in competition for companies and requires domestic companies

to quickly enhance their competitiveness in both domestic market and abroad to survive and develop

As a limited liability company operating in the field of production and trade

of products of traditional handicraft, Dong Thanh Import and Export Co Ltd., is not outside the general trend, on the other hand, they usually face with the quick change

of the environment, fiercer and fiercer competition in the industry During the past time, the company has been trying to find out a long term business strategy to have product popular in the market However, the fact that at the present time, the production and business plan of the company is just set up only on the basis of short-term, which lacks investment in a more long-term strategy This consequence there is a limit in using resources of the company effectively, misses business opportunities and must hardily face with change in the market

Originating from that fact, may find that planning of a strategy to effectively use their resources to exploit opportunities and limit the risk to be urgent task of the Dong Thanh Import and Export Co Ltd., handicrafts in the present time For that

reason, we select the theme: "Determine strategic Planning Business of the Dong

Thanh Handicrafts Import and Export Co Ltd., up to 2015" to study and

complete training programs of business masters

2 Researching Purpose of the theme

In Vietnam, the embroidery is a traditional handicraft which has been formed for a long life The history of this traditional profession is originally associated with the spiritual history of the Vietnam Women in the past From the first century, a part from the flag embroidered "it revenge of the" in the revolution of Hai Ba Trung, Vietnamese women also used to embroidery to decorate their houses, moreover, is

to show their emotions, feeling and confidence and make themselves beautiful

However, until now no one knows when did the embroidery of Vietnam formed? Who was the first person having idea to change sewing and embroidery to

be a profession of art? Legend has it that beginning of the XIII century, embroidery

in Vietnam was marked a turning point of new development with the king in hiding

in the village of Tran Van Lam commune, Ninh Hai, Hoa Lu district, Ninh Binh province Here, people have learned experience and folk embroidery technique in Vietnam to widespread a handicraft work with a bold art to serve the Tran Dynasty

Inheriting this traditional, Import and Export Company Limited handicrafts run by Dong Thanh Nguyen Thi Tu director has outlined a new direction for the industry by combining the characteristics of art painting and the quintessence of traditional embroidery techniques to create traditional embroidery products Through the topic of human - natural environment - the culture and traditions hidden in attributes of human body parts, embroidery art has brought something of how we see the world, the image of a territory and the music can be expressed in a traditional art

Development of traditional embroidery craft through the development of companies, especially export-import company specializes in the Dong Thanh Import and Export Co Ltd., is one of the factors positively arouse traditional The problem is to mount the village with the development strategy of the business from which makes unique hand-embroidered products to domestically and international market

Deriving from the idea that the problem is that researching interests are:

- Analysis of environmental factors affecting the Import and Export Co., handicrafts East City to identify opportunities, risks combining with the reality of the elements within the company to find out strengths and weaknesses to identify goals and vision to propose strategies to develop production and business sectors in embroidery handicraft company in 2015

- Strategic Planning Development Co., Ltd Import and export handicrafts City East on the basis of theoretical studies of business administration in general and strategic management business in particular, where special mount strategy is the development of traditional hand embroidery of Ninh Binh province

3 Object and scope of research

Object and scope for researching in topics are the actual situation of production and business of embroidery and development strategy of traditional embroidery craft associated with the development strategy of the Import and Export Co., Ltd Player and strategic implementation solution of the company

4 The scientific and practical meaning of the topics

4.1.Theoretically:

Researching results have contributed to systematization of some basic theories about business administration, strategic administration, and strategic mock-ups to enhance competitiveness and contribute to enrich the basic criteria to develop the companies

5 Structure of the capstone project:

Besides the opening and conclusion, content of capstone project is presented

in three chapters, including:

Chapter I: The basically theoretical issues about business strategy Chapter II: Status of the business strategy of the Dong Thanh Import and Export Co Ltd.,

Chapter III: Determine strategic Planning Business of the Dong Thanh Import and Export Co Ltd., 2015

CHAPTER I: BASIC THEORY IN THE BUSINESS STRATEGY

1.1 An overview of business strategy

1.1.1 Concept and characteristics of the business strategy

1.1.1.1 Concept of business strategy

In terms of history, business strategy was firstly used in the military then penetrated into other areas of economic and social life Since the 50th of century

XX, business strategies have been implemented widely applied in the field of management and management of strategy has been confirmed as a direction, an effective management method Due to the different approaches of strategy of that given concept is also different, so far has not had a general concept and agreement

in categories We could give out some opinions as followed:

According to competitive approaching way, Michael Porter said: "Business strategy is the art of setting up stable competitive advantage to defense”

In accordance with K Ohmae, "The aim of the strategy is to bring the most favorable things for one side and assess time to attack or retreat, determine the proper boundaries of compromise" and he stressed: "If there is no competitors, there will be no strategy, the sole purpose of the strategy is to ensure to have sustainable victory for the competitors”

According to planning approach, James.B.Quinn said: "Business strategy is a format or a plan to coordinate the main targets, policies and action plans into an overall adhesive together and according to William.J.Gluech "business strategy is a plan with uniformity, comprehensiveness and coordination designed to ensure that the fundamental goals of the company will be conducted

According to the approach as business strategy, that is one category of management science, Alfred Chandler wrote: "Business strategy is to identify the fundamental and long term goals of the business, select policies, and action plan to allocate resources to achieve those fundamental goals

In general, the above concepts of the term encompass both and reflect the following:

 The target of the strategy

Business strategy reflects the activities of business units including the process

of setting targets, measures and means used to achieve that goal

1.1.1.2 Highlights of the business strategy

To better understand the business strategy categories we need to examine its characteristics to distinguish it from the concepts and categories concerned

Business strategy consists of the following basic characteristics:

- Business strategy often verifies the fundamental goals, the business orientation of each company in each period and is fully consistent in all aspects of production and business activities of companies to ensure business continuity and stable development (more than one year)

- Business strategy ensures to mobilize and combines exploitation and utilization of human resources of company at the present and in the future maximally and upholds the advantages and seizes opportunities to gain advantage in business market

- Business strategy must be reflected through a continuous process from the construction of strategic and organizational implementation, testing, evaluating and adjusting strategies

- Business strategy thought to have been carried the victory won in the business market (not to take full advantage of his victory)

- Business strategy is usually built for a relatively long period (3 years to 5 years), tend to shorten depending on the particular segment

The above characteristics are easily distinguished categories with strategic concepts and categories concerned The concept closest to the strategy is "plan", meanwhile in fact many people confuse the concept together

Considering the strategic order of business to be formed on the basis of analytical and diagnostic environment, in turn Left strategy as a basis for implementation planning strategies

Striking features of the strategy are its orientation and solutions confirmation, major policy in key targets, in the planning, balance orientation is mainstream, all the targets are quantified and linked together to be a system of target reflecting production and business of companies comprehensively

1.1.2 Accessibility - level business strategy:

1.1.2.1 The point of access to the business strategy of the company:

Term “strategy” derived from long time ago, in the past, this term was first used in the military Today, this term has been used in most areas: economy, politics and social culture Especially in the economic field in the range of macro and micro

In the macro range, we can have concepts such as "industry development strategy,"

"strategy towards the industrialization in export”, in terms of micro-scope strategy, there is also combination with concepts, company management categories forming the term "marketing strategy", "production strategy", "Business strategy" Here,

we study some approaching ways to business strategy of the companies

According to classical point of view: This view appeared before 1960s, according to this view, the company may plan and optimize all the input factors to

profitability Therefore, in this period, companies use production functions and computer to optimize profitability In fact, up to 1970, this approaching method is insignificant because it did not mention the outside environment of the company and all activities of companies are managed by the chief accountant and director

On the other hand, some areas were formed during this time like North America, South America, Western Europe and Eastern Europe dominating the entire operation of the company At that time, there was competition among areas, which requires companies to have general voice to coordinate with each other and must consider the factors of competition

According to evolutionary viewpoint: This view considers "Business is an alive body and it is affected by external environment, at the same time, alive body self-adjusts to adapt to business environment” Thus, this point of view does not recognize company as a black box, but contrary company is an opened system affected by external environment, “companies can not sit within the four walls but open the window to observe the sky with full of stars ", to search for business opportunities and find out the risks which can threaten business

According to viewpoints according to the process: According to this point of view, if company wants to be successful in the market, it is necessary to have long term business process During those times, companies accumulate the management experience to make it become device in business of company According to calculations from Harvard University in the United States: Companies must take from one to three years to step into the market from three to five years to hold firm

in the market and more than eight years to succeed Therefore company must have

long-term plan, must build long-term development strategy in the market

According to viewpoints of system: This point of view shows that each company is each element of economic system In that economic system, companies have close relationship with each other and closely affected by its environment (environment of the economic system consists of a set of elements, the distribution systems such as the political environment, legal, social and cultural environment) or economic system acts on its environment Thus, when hold the business, each company not only considers themselves to businesses but also pay attention to the influence of other elements in the system (the environment sector) as well as outside the system And people call it external environment of companies Therefore, the analysis of the company environment is a necessary issue

In short, whether the point of a strategic approaches categories under any angle, they are for its common purpose to have fast and sustainable -development and optimize profitability in an increasingly popular and competitive environment

1.1.2.2 The levels of the business strategy of the company

Depending on each different classification, there are different types of strategies in the company Pursuant to the strategic level in company, strategy in the company is classified into three categories:

Note: SBU(Strategic Business Unit: strategic business staff)

Diagram 1.1: Levels of strategy in companies

Dogs prefer: SBU (Strategic Business Unit)

- Strategies for company: This is the strategy which aim at answering the question: Which sectors the enterprise will be in? Where is position of companies with the environment? What is role of each sector business in companies? Strategy

at the level of companies must be built by all enterprise

- Strategies for Business: This is the strategy to define the manner that the Enterprise should compete in each sector Therefore, as for the small enterprise that

is specilized in one business sector and as for the large scale enterprise, the business strategies is similar to the strategy at the business level However, when the Enterprise operating in many sectors, normally, this Enterprise will be split into strategical business unit (SBU)- or called independent unit member Each SBU will

be responsible for one business sector, selt-setting up the business plan for their business unit and unifying with the benefit of all Enterprise

- Strategies for functions: Strategy level is lower level business strategy which be built for each functional organizations to implement the business strategy level

Summary, dividing the strategy system of companies by level, strategy systems of companies including three levels:

- Company level Strategy

Functional strategical

level

Business strategy

Strategy of Company

R & D Production Marketing Human Finance

- Business level strategy

- Functional level strategy

1.1.3 The process of building business

Normally, a company must pass through three following steps: Search for business opportunities; build strategic business choices and decide "TOD"

* Step 1: Search for business opportunities and forecast market demand

In market economies, due to the nature of free market competition, which makes market share of the company, tend to be narrowed but there are also new opportunities arising

Clients’ needs and production capabilities of companies like the look So business opportunities are not scarce Businesses will discover the demands that are not in the market if companies know how to access, analyze and understand it

Companies must have a researching process in a certain period of time to discover the needs of the market, therefore can meet the demands of the market The companies can study directly in the field or indirectly in the researching office Researching methods in the market will make companies grasp more detailed information about the needs of the market: is there any change in the market (fluctuations)? What kind of goods does the market need to satisfy, how about the service after meeting the demand? So that, the companies will have business orientation to meet the necessary of the market demand

However, during doing this researching methodology, the companies will expense, companies will spend a lot of time on this job When use researching methods at the office, the information of market grasped or accessed by company is not very clear and precise, but for the company, it less expensive as well as less studying time and so strategic decisions in business are made to adapt faster to the market

Based on the understanding of markets, companies will combine with interests of its business, financial capacity, considering the level of risk to select the business chance for them themselves

The steps in finding business opportunities with companies including:

Firstly, Companies must complete statistics of all business opportunities

discovered by observation, collect information to analyze market and learn experience from other companies

Secondly, Companies need to classify business opportunities on the group

and rank the business opportunity which is similar to the same group for reference capable of performing opportunities there

Thirdly, View each group as a business opportunity to find out feature of

each group Then select a group in accordance with the business ability towards strategic planning business

This may be considered as the most difficult and important phase in the process of finding business opportunities of the company This step requires entrepreneurs have deep thinking and strategic vision

* Step 2: Determine strategic Planning Business

 To have effective business strategies as expected, when set up business

strategy, which requires companies to achieve the following requirements:

 Must increase the strength of the business and gain competitive advantage in the market

 Pay attention to and set up the safe area in business to limit risk to a minimum rate and increase safety to the maximum

 Need to determine the business scope, key target and basic condition of technical material and labor to achieve that goal In addition, the target must

go together with policy system and measures to achieve the target "

 It is necessary to have enough information and knowledge, must be right thinking method to get the real, intelligent and sharp look in the business environment

 Have a standby strategy in the worst situation happening to the company, then company will have immediate strategy for replacement for some situations

 During setting up the business strategies of the companies, it is necessary to know to combine the opportunities and the time ripe for business If the business strategy is not ripe, the company will surely fail But if the strategy

is too ripe, company may fail due to lose opportunities

 On the other hand, business strategies must present a harmonious combination between the two types of strategies Overall business strategy (general issues are the most decisive) and the business strategy of division (the partial issues such as product strategy, pricing, marketing, trading and promotion )

In this business strategy is not a general presentation, but it must reflect the targets and specific tasks, which must be feasible for the purpose of achieving maximum efficiency in production and business

A very important issue is that if company only sets up business strategy alone, it is not enough, because how perfectly the strategy is set up, but it is not applied effectively (mean that it is not implemented well, it is not made to be business policy program to be appropriate with each stage of business development), then it will become useless and absolutely no profitable for companies

To accomplish the above requirements, a part from setting up the business strategy, the company should pay attention to the base (often called strategic triangle) as followed:

Firstly, based on the client:

Business companies really needed or not depends on customers So customers are the basis of business strategy With the rapid modernization of society today, the demand for used goods between the different groups there will be more distributed, creating a market variety of goods and services Therefore, companies need to understand and capture the market of individual customers, classify customer, classify goods and services to suit the customer groups, thereby determine who the client of company is

There are two methods to divide the market:

+ Division according to target: Divide the customers according to purpose of customers in the use of products or services that company provides For example: They use to do business, retail, and consume or store

+ Divide according to capacity in meeting the demand of customers: The division is based on the capacity and resources of the company to meet the needs of the market Distribution policy is also related to factors II, which is the ability of the company

Seconly, based on the ability of the company:

Company needs to rely on their ability to plan business strategy because from the 80s back, development potential of the company is beyond the needs of the market (it is different from the period of 70s back, the temporary supply and demand in balance, the demand of the market has diversified, so exploitation of the market is the main problem of company) So that competition among companies is becoming fiercer, the trend requires to divide the market is becoming more urgent

To understand the market, the company must focus on exploiting their strengths when set up business strategy

In fact, company should not worry and pessimistic while exploit the strengths of the company because as usual, any company also has its strengths and weaknesses The problem is to know that to set up business strategies of companies

Thirdly, based on competitor:

Setting of business strategy bases on the advantages of the companies in comparison with the other competitors Self-set up statistics to analyze the strength

of competitors, thereby find out the advantages for themselves There are two types

of advantage:

+ Invisible advantages that is disquantified prestige such as reputation, the current relationship of company, business condition and location of the company or habit in using products and services customer

+ Tangible advantage is often evaluated by volume and quality of product, production costs, capital investment, price, brand name of products

* Step 3: Select and decide strategic business decision”

Before selecting business strategy, companies should consider the following issues:

 Get to know the exact current strategy of the company as a basis to select the business strategy in the coming time as well as to confirm the available strategy

 Review the results of technique in the strategies analysis

 Review the main factors influencing directly to strategies such as the power

of industry and business; targets and attitudes of managing director, financial resources often causes pressure on selecting the strategy Many companies have limited human resources, so that they often have to give up business opportunities just because they do not fully realize cost to “join in”

 Outside dependence rate, reflection of the objects concerned, determine the time to achieve the target"

 Each company sets up their strategies according to their business based on the different purposes and by different methods Content of business strategy

of any company has combine together to be harmonious

General strategy usually mentions the critical issues or cover first; it solves the problem of survival of a business Usually general strategies often focus on the following targets: the profitability, market position, business safety, productivity and social goals

Determination of system objectives ensures the requirements:

 In its business strategy, companies need to identify goals clearly in each period respectively Must have general and specific targets for each area of business companies, not too seriously a goal that prejudice other targets and requires a combination of harmony among them

 The targets of business that companies define and select, must be sure to link reciprocally, so that this goal does not interfere with other goals For example, companies should not aim for maximum profits that do affect to the other target and penetrate deep into new markets

 Must determine priority item clearly This demonstrates the rank of the system goals Priority should be given too much targets and there are also additional priority Guarantee about is, effectiveness of priority is just presented

 Companies must always balance the reality and difficulty An easy goal is not a dynamic factor Also, a non-fact will make businesses not performed Therefore, it is necessary to respect inside connection among targets The last requirement is the goal must be made acceptable and they must be aware of that goal Participation in the implementation process of formation and the goals will help them understand the problem thoroughly and that is the basis for significant progress made in the future

Partial strategy often tends to specific issues of company such as financial and technological, HR, investment strategy: pricing and advertising

1.2 Identify vision, mission and values:

The mission and vision present the highest and the most overview purposes

of company, it describes the aspirations that company towards The mission statement and vision is considered as a panoramic picture of the company future Mission statement and vision is the key order about the way that company think about requirements of the environment and is considered the base to meet the prospect Companies tend to combine the demands of the environment in decision-making strategies, avoid risk by the impact of the environment Vision sets up the foundation for the strategic planning, is the basis of assessing the suitability of the strategic targets The mission and vision describe the reasons for existence of company, the basic purposes; it is a guided principle with oriented nature during setting up the target and action plan

Customer orientation and business definition are the first step when setting

up the strategic vision Companies identify their business activities on three aspects: Who will be satisfied (customer and targeted market), what they will be satisfied (products and basic services), how to meet the needs of customers (with the specific skills and abilities) Business should be directed at business customers, not just a product orientation, which determines the way to protect company to avoid out of date in awareness when there is a change in demand If the business is directed at the product, it will obscure the function of the company which is to meet the demand of customers

The value of the business confirms the way to conduct business Value controls behavior in the company, is considered as a cultural background, morality

of company, is the basis to create competitive advantage Determine proper vision, companies can build the target system in accordance with the requirements of production and business and it is an important step to realize the mission and vision

of the business

In short, the most common way to understand the strategic vision of the process is beginning to develop strategies By the internal business, people with a common purpose and that purpose is consistent of radical left in the whole extensive staff of employees and companies will create success exceeds of those companies and do not have clear and pure purpose

1.3 Analysis of the base to build strategies

1.3.1 Analysis of macro environment

In fact, departments and companies in a broad macro environment, consisting of six segments: economy, technology, socio-culture, demography,

politics and global law Changes in the macro environment can have direct impact

on any force in any industry and finally change the attractiveness of an industry.

Diagram 1.2: PESTmodel of analyzing external environmenti:

- International Integration: ASEAN, APEC, WTO …

- Regulation of the Industry as market development strategy …

- Structure of population and behaviour of population

- Awareness of the society

T

Technology

- Invention, research and development

- Telecommunication, information and internet technology …

(Source: use from Hill and Jones, 1998; Massey and partners, 2005)

1.3.1.1 Analysis of economic environment

Status of the macroeconomic environment determines the health and, economic prosperity; it always causes the impact on business and industry Therefore, companies must study economic environment to identify changes, trends and strategies that the company implies

Economic environment is only the nature and orientation of the economy in which companies operate

Effects of the economy to a company can change the ability to in creating value and its income Four important factors in the economic environment are growth rate of the economy, interest rates, exchange rates and inflation

Economic growth leads to an explosion of customers, so may tend to bring more comfort ability on the pressure in a competitive industry This can be devoted

to the company the chance to expanse activities to obtain higher profits Contrast, economic recession will lead to a reduction of consumer and thus increase the competitive pressure Economy decline often cause war in the price in saturated sectors

Interest rates could impact on demand for products of the company Interest

is an important factor when customers have to borrow to finance their shopping activities on these goods

Exchange rate valuation of currencies of countries with each other Shift of the exchange rate has direct impact on the competitiveness of companies in the global market

Inflation could reduce the stability of the economy and makes the economy develop slowerly, higher interest rates and unstable exchange rates If there is inflation, investment planning will become risky Key characteristics of inflation are that they cause difficulties for the planned future Such uncertainty makes the investing companies do not dare Focus on state investments in companies where inflation will reduce economic activity, eventually pushing the economy to stagnation site Thus, high inflation is a threatening to the company

1.3.1.2 Analysis of the influence by political conditions

Political factors have greater impact on the operation of companies They can create opportunities, obstacles and even risky business indeed for a change of politics

1.3.1.3 Analyzing the change in law and policy

Laws and policies factors may also impact on the extent of the opportunities and threatening of the environment

Companies must analyze the philosophy carefully and the new policy relating to state management Antitrust laws, tax laws, departments, or choose to adjust priorities, labor law, the areas in which state management policies can impact

on operations and profitability of the industry capability or of the business

1.3.1.4 Analyzing the change in social conditions

Social conditions are considered to have strong impacts on all strategic activities

+ Population conditions:

To produce or do business, administrators have to use human resources, to sell goods they also need presence of sellers To make strategic plans for the development of each company, both these two impact factors can be originated In other words, population and population rate in each market and each country is always acted as forces with great influences on all activities in terms of business administration in each enterprise

Generally, administrators in each enterprise must analyze population structure based

on gender, age for segment and determination of the target market Moreover, they should define real demand for their products and based on this to decide the production plan and product consumption of the enterprise

The displacement of population from one region to another and from one locality to another is also a factor that affects planning activities in terms of strategies and policies for

+ Occupational conditions:

We see that in any place with strong development of social economy, specialization and cooperative movement of labour is higher and higher and vice versa This also means that more developed the society is, stronger and stronger specialization and diversification of occupation is Different occupations will result

in requirements on different vehicles and specialized labor tools Moreover, due to different occupations, demands for consumption of occupation, travel and entertainment etc are also different To meet different demands of career in the society, administrators in each enterprise will surely calculate all impacts of above factors on planning and implementation of their business strategies and policies

+ National psychological conditions:

Homeland emotion, national love, national pride, unyeilding will, fond of learning, charity and justice, enthisuatism and so on are always mental factors on national schychology They have big influences not only on thinking way and actions of each administrator as well as each person administrated but also on consumption style, formation of different market segments and all of them force administrators to consider their business decisions

+ Style and life style conditions:

Society is a colorful picture created by different styles and life styles Although two people can not have same style or life style, in general tylical styles and life styles also exist in anywhere at any time Each style and life style has its own feature under the way each individual thinks, acts and shows outside In turn, this strongly controls formation of demands for types, quality, quantity, appearance, designs and so on of goods and services which are typical for those styles and life styles Thus, managers have to adjust their activities under respiration and life style, under style and life style of the current society and future society for efficient business

+ Marriage and family conditions:

Marriage and family in life of each person have extremely locations and roles Each family is a cell of the society, which mentions tight attachment among administration activities and administrators with marriage and family

Marraiage and family do not directly have influences on activities administrators in each enterprise but also have deep influences on many types of demadns in the society such as house, television, washing machine and items, services related to households When administrators make and organize implementation of strategies and business strategies, they are not allowed to ignore impacts of these factors in their activities

+ Religional conditions:

Religion was originated early in development history of human beings Nowadays, there are many different religions in the world Each religion has its own viewpoint, adtitude and belief in terms of life, behaviours among followers and people Religion has big influences on enthics, personality, culture and life style of not only admistrators themselves but also on staff, officials under their management It can be found that leadership and operation of administrators must calculate impacts of religious factors in awareness, bahovious, compliance and execution of decisions of people under the management Not about that, schychology of consumers does not also go beyond deep influences of the religion All these have big influences on planning and implementation of business policies, strategies of administrators Those who are sensitive, have thorough knowledge about the religion can find out opportunities in their business administration activities

1.3.1.5 Analyze influences of science – techniques – technology

This is a factor with big, direct influence on business strategies of fields, industries as well as many enterprises In fact, the world has witnessed changes of the technology which wavers and even loses many fields, but many new or more perfect business fields have appeared at the same time

XX century is a century of science and technology Thus, analysis and estimation of technological changes are most important and urgent Examples are often extracted with appearance of electronics, informatics and biological technology In fact, technological changes affect all enterprises, even all small and medium-sized enterprises

Technological changes of course affect life cycle of a product or a service A theory cycle includes phases: start, development, mature and decline In fact, some enterprises and also some products have new development phase after decline period Moreover, technological changes also affect producion methods, materials

as well as behavious of laborers

1.3.2 Analize the industry environment

Diagram 1.3: Model of 5 forces of Michael Poter

- Customers can buy from many enterprises

- Demand conditions:

increase or decrease demands for products

- Barriers out of the industry: use fixed assets, costs out of the industry

- Replaced products but

products of producer are

important for buyer

- Buyer is not great

- Seller’s threats enter

buyer’s business industry

- Buyer is unable to enter

seller’s business industry

- Availability of replaced products

- Transition costs are low

- Supplier of replaced product gains high profit and they are eager for competition

- Difference of “Value – price” of the replaced product is rather great.

(Source: Lecture materials of program MBA-PWU- 04A (2006)

Threatenning

the potential

competitor

Customer’s power

Threatens of replaced prpoducts

Supplier’s

power

Competition among existing companies

1.3.2.1 Analyze competitors

First force in model of five competitive forces of Porter is competition level among companies within a cope of an industry Because enterprises in an industry depends on each other, actions of a company often results reactions of others Competition is more and more severe when an enterprise is chanlenged by actions of others or when a certain enterprise realizes an opportunity to improve its own status in the market

Hardly there is unification of enterprises in an industry because they are always different in forces, capacities and try to create differences compared to their competitors Normally, enterprises create competitive advantages by making differences among their products with any thing supplied by their competitors Regularly used tools in competition to create values for customers are price, quality, improvement and reaction

of customers

In the case that competition in the industry is weak, companies will have opportunities to increase price and receive higher profit However, within strong competition environment, price competition can drastically happen, which will result in price wars Competition restricts probitability due to reduction of edge profit on revenue Therefore, competition intensity among companies in the industry generates strong threats for profitability In general, the competition level among companies in the industry depends on three key factors: competition structure of the industry; demand conditions; high barriers to leave from the industry

Competition structure

The competition structure indicates distribution of quantity and scale of companies in the industry The industry structure changes from dispersed to concentrated industry and is related to competition

The dispersed industry includes big numbe of small or medium sized companies, no company among them occupies the domination location The dispersed industry often has low entry barrier and its products are primary with few differences Two these features are combined to create tendency of increasing or decreasing periodical profit Low entry barriers will facilitate a series of newcomers if having high demand and high profit at any time with the hope to earn money when the price can go

up or go down to each demand level (through bankrupcy), which means the time price can be stable again

Therefore, structure of the dispersed industy brings a thread more than an opportunity

A concentrated industry is transgressed by few big companies (in this case it

is considered the group exclusiveness) or in extreme case there is an unique company (exclusive) Concentrated industries include abriviation, car production and pharmacy

Nature and level of competition in the concentrated industry are difficult to estimate because companies depend on each other in the concentrated industry Competitive actions of a company will direct affect profitability and market place of

other competitors in the industry This generates a strong reaction from competitors, consequence of such competitive dependence can generate a dangerous competition spiral They try to lower the price for competition or a series of other expensive reactions to make the profit of the industry reduced

Obviously, in the concentrated industry competition among companies and possibility of price war occurence create main threats Sometimes companies try to decrease these threats by using the guiding price set by advantagous company However, they have to pay attention because agreements of fixing price is illegal despite there can be implicit agreements (an implicit agreement means an agreement without direct contact) Instead of direct agreement, companies observe and explain behaviours of each other Normally, implicit agreements are to follow the guiding price set by an advantagous company However, agreements of the guiding price are often broken under disadvantagous economic conditions

In more general, when price wars are are threats to companies with tendency

to move to compatitions on factors which are not price such as advertisement, promotion, location of brand name, functional design and product’s quality This type

of competitition is make efforts to creat differences for companies of the company compared to competitors , thus forming loyality of brand name and minimizing occurence of a price war However, validity of this strategy depends on whether possibility to cause differences of product in the industry is easy or not

Demand conditions:

Demand conditios of an industry is other decisive factor on competition level

in existing companies Demand growth from new customers or buying increase of current customers intends to reduce competition because it opens a larger space for development Demand growth intends to decrease competition because all companies can sell more without fighting for the market of others, as a result, their profit remains high

On the contrary, decrease of demand will make competition stronger becuase some companies must fight to maintain income and market place Demand decreases when customers leave the market or when they buy fewer In that situtation, each company can only make growth by obtaining the market of other companies Therefore, decrease of demand creates a big threat because this increases competition level among existing companies in the industry Moreover, slow growth level of demand can generate problems

Barriers to leave the industry

Barrier to leave the industry can retain a company which stays in the industry even of low income If barriers to leave the industry are high, the company can be kept in a non-profitable industry when the demand does not change or declines It can cause redundance of production energy Afterwards, the redundant production capacity intends to deepen the price competition because companies see that price cut-off is an attempt to receice more orders to use their redundant energy Popular barriers to leave the industry including:

- Investing in workshops and equipment machines without any other use method and possibility to sell out If the company wants to leave the idndustry, it must leave book values of these assets

- Fixed expenses to leave the industry are too high such as payment for redundant workers

- Economic dependence on the industry when a company does not diversify and only depends on income in the industry

1.3.2.2 Analyzing pressure of customers

The second force among five Porter’s forces is negotiation capacity of the buyers The buyers of a company can be the final consumption customers of its product (final users) but they can also be its distribution companies to final customers such as traders and retailers Buyers can be considered as competition threats when they stay at the position to require lower price or when they require better services (can lead to increasing expenses of activities) Buyers can require the company depends on their relative power to the company or not According to Porter, buyers have most power in following cases:

- When the supply industry is generated by many small companies and buyers are few and big, this allows buyers to transgress supply companies

- When buyers buy with big quantity In this case, buyers can use the buying power as a negotiation lever for sales off

- When the supply industry depends on buyers because huge percentage of total orders are spent for them

- When buyers can transfer among supply companies with low expenses, thus it encourages companies to go against for sale off

- When economic features of buyers are to buy from some companies at the same time

- When buyers can use threats with supply sources when they can integrate or they use this capacity as a tool for sale off

1.3.2.3 Analyze pressure of supplier

Third force among model of five Porter’s forces is negotitation capacity of suppliers The suppliers can be considered a threat when they can foster to raise price

or decrease profitability of the company On the contrary, if supplier is weak, this brings an opportunity to force sale off and requires high quality to the company For buyers, supplier’s ability for the company depends on relative power between them and the company According to Porter, suppliers have most power when:

- The product sold a few by the supplier can replace and be important to the company;

- In the industry of the company, it is not an important customer for the supplier Such situtation makes health of the supplier not depend on the industry of the company and suppliers have few opportunities to reduce price or raise quality,

1.3.2.4 Analysis of pontential competitors:

The forth force includes companies that do not compete in the field but they could do that if they want For example, electricity branch is potential competitor for telecommunication companies in telephone service and Internet assessment

It is important to identify the competitors who could penetrate deep into the branch, because they could threaten to market share of current company in the field One of the reasons for which we could consider the compitetors who want to penetrate deep into the field as a threatening is that they could bring the field the new production capacity Normally, the competitors that just penetrate deep into the field, have strong interest in having market share The result is that new competitors could speed up curent companies in the field, must be more effective and must know how to compete with new attributes (For example, use distribution system in the base of Internet),

Current companies in the field want to prevent potential competitors penetrating deep into the field Therefore, risk of nepetration of highly potential competitors presents one threatening to profitable capacity of operating companies Otherwise, if penetration risk is low, modern companies will use advantage of this chance to increase the price and have higher income

When competitors want to penetrate deep into the field, the will meet some barriers Penetration barriers are factors that cause difficulties and expense for competitors when they want to penetrate deep into the field In some cases they could penetrate deep into the field but they are in disavantage status New companies use more expense to penetrate deep into the field, the barrier of deep penetration will be higher High penetration barrier will keep potential competitorsoutside even the income of the field is high In the classic writing about deep penetration of Economists Joe Bain, he confirms three deep penetration barriers including: Trademark loyalty; Absolute expense advantage; and economy

of the scale A part from the factors of Bain, we could add two more important barriers that need considering in many cases such as: Transformation expense, regulation of Goverment and retaliatory

express on the quality of product and after-sale service Trademark loyalty could cause some difficulties for new penetrated companies that want to have more market share of current companies Therefore, it decrease deep penetration risk of potential competitors, competitors who want to penetrate deep into the field, will find out that duty to eliminate the taste formed in the custormers is a very difficult and expensive thing

Absolute expense advantage

Current companies could have absolute advantage in expense in comparision with newly penetrated companies Advantage in such absolute expense arises from:

- Capacity in production management dominates by business in the past

- Capacity in controling special input for production such as label, material, machine, equipment and administration skill

- Approach cheaper capital resources because current companies have less risk in comparision with companies that are not set up

If current companies have more advantage in absolute expense, threatening from newly deep penetrated companies decreases

Economics of scale

Economics of the scale is improvement of edge effectiveness when companies accummulate the expirience when its scale increase more Resource to create economics of scale includes reduction of expense by mass production or big volume of standardized product, there should be reduction when purchase big volume of material, detail and advantge could be achieve by fixed expense distribution for big production volume and economics of scale in advertisment

When advantage in expense in the field is significant, newly deep penetrated companies with small scale could overlook the advantage in expense or must accept the risk to penetrate deep into with large scale and must bear the big capital It is more risky for newly deep penetrated companies with large scale is increase in supplying source of product which will make the price reduce, that causes fierce retaliatory of current companies Therefore, when current companies have economics in scale, which could threaten penetration to reduce

Transformation expense

Transformation expnese is one time expense when customers want to change their purchase to other supplier Changing expense could relate to expense to purchase machine and equipmment, training expense and even spirital beconage when terminate one relation

If changing fee is high, customers are kept in production of current companies even when product of newly penetrated companies is better

Regulations of Goverment

About history, regulation of Goverment already creates one barrier for big penetration in many fields By licensing or special request, Goverment could control the deep penetration of some fields For example regulations about business of pharmaceutical products and banking ….Goverment usually limit penetration for

Therefre, directing to slot of the market not served by curent companies is one way for new competitors to overcome the barrier to penetrate deep into the field

1.3.2.5 Analysis of pressure of new product for replacement

Final force in mock-up of Porter is threatening from replacing products Replacing products are products of the field that serves the similar demand of customers such as the field that is being analyzed

Existance of closely replaced products represents the threatening of competition and limit high price, that restrict the profitability of coffee However, if there are only few closedly replaced products for product of company, (that is the case of weakly competitive position) and other factors are normal, the companies will have chance to increase the price and have more benefit The result is that its strategy will be designed to have advantage in competition from this reality

1.3.3 Internal analysis of companies

Internal atmostphere factors of companies includes all factors about inside system of companies It is necessary for companies to analyze in detail some internal factors to give out the method to confirm the advantage and disadvange of companies On that base, give out the countermeasure to overcome disadvantage and uphold the advantage to have maximum benefit Mainly internal factors includes functions: Production capacity, R & D human resource, technological knowledge and financial capacity

1.3.3.1 Analysis of production capacity

In one company, production is an integral function because it is starting of all business and production process Production is origin of valu-added, which brings income for employer and employee

Production function in business and production is process to change input material to be goods and service For almost fields, main production expense is to create goods and service with high rate Therefore, production function is usually considered to be competitive weapon in strategy of company The main decision relates to production strategy including:

- Decision about production procedure such as select technology, arrange working condition, locate equipment, adjust production conveyor and arrange transportation system

- Decide about mobilizing production capacity sich as confirm output rrate and operation capacity of machine and equipment, arrange production shift

- Decide about quality of product such as SPEC that need checking and quality checking method

During development, companies are trying to find all the way to have benefit

in the market such as enlarge the production scale and accumulate the expirience to reduce the price of product to increase competition of product in the market with final target to increase turnover and benefit of companies Or some companies innovate the machine and equipment, increase R & D to give out product with different function to meet demand of custormers Although according to this method, companies must spend a lot of money, however, thank to difference of product that consumers are willing to pay high price for product Therefore, the company still keep their position in the market

In order to bring high effectiveness in production, companies must give out clear production program and the most suitable production management Companies needs confirm: Produce what? how much? consumption place? and when produce? Therefore, companies must set up schedule for production direction; stored schedule and suply material for production and storing schedule and product supply

1.3.3.2 Analysis of technogical knowledge

In investment, investment in R & D usually brings high result However, R

& D also includes high risk, only about 12-20% of project basing on R & D which really brings benefit However, companies still create basic advantage about R & D

R & D could be divided into three types: The first is research to innovate the product to create completely new production in comparision with competitors; The second is research to innovate the product to increase quality or complete particularities of current product; the third is research to innovate technology in production process to decrease expense or increase quality

Innovate the product according to request in all skills, the companies must be able to carry out basic research and use researching result to select the products that could bring highest sucess and apply in the projects In order to have skill, it is necessary to have a lot of budget, only leading companies in the field are just be able to innovate continuously and only them could bear the risk

Product innovation will normally bear less risk, the company does not have

to give out one completely new product but they just complete the available products Product innovation arise less request for company

Motivation to innovate the technology is different with motivation to innovate the product Expansion of the market in innovation of product is the key target, technical innovation is to decrease the expense or increase quality of product Technological innovation does not request basiccally technical and scientific research but it requests the skill to explore newly scientific achievements

1.3.3.3 Analysis of financial capacity for innovation and development

Financial analysis allows companies to confirm the strong and weak point in financial operation of companies Confirm the reason and give out the

countermeasure to settle that problem Companies could only exist and bring wealth for owners if it is well managed in financial field Therefore, in any scale, even though small or large scale, financial management is cared by companies Financial management does not exist independtly but it has close relation with other functions

of companies such as production, marketing and human administration to execute business duties of companies When analyze business finance, it is necessary to implement the following steps: Select criteria for analysis; confirm that criterion; compare criteria in the past and average criteria of the field with criteria of competitor

The first, companies analyse finance through financial reports such: Balance

sheet; Report of business result and financial report So that provide general information about using capital, labor, technique and it could answer problem relating to current flow of companies investment in cash of companies in a certain period

The second, Brief analysis of four basic targets groups about payment

capacity such as fast payment capacity, current payment capacity and net floating capital Criterion group about financial mechanism such as debt co-efficient, coefficient of asset mechanism and coeffecient of capital source The following is criterion group about operation capacity including the following criteria: Turning circle of stored goods, floating capital, performance of using fixed asset, performance of using total asset and average money collection period The final is criterion group about benefit such as profitable coeffecient of asset, turnover and capital of owner

In conclusion, one strong financial potential with high competition capcity and companies will increase their position and imiage of companies in the market

1.3.3.4 Analysis of management capacity

Companies must keep the following factors at the higest level

- Organization mechanism, prestige and appearance of the Companies

- Score of companies to achieve the targert

- Hold the communication system

- General organization and control system

- Atmosphere of organization order and discipline

- Capacity, care and knowledge of highest leaders

- Strategic planing system

1.3.4 Table of general SWOT analysis

SWOT mock-up is used to analyze strong point and weak point, chance and

challenge of companies to set up development strategy This business stratgy will uphold the strong point of Companies, overcome the weak point in using the business chance and overcoming challenge of outside environment

Diagram 1.4: Matrix of SWOTanalysis

1.4.1.1 General strategy: (General strategy)

Outlining of the target to develop the companies for a long time usually mentions long term important issue, which decides life-and-death of companies

General strategy includes the following content (hereafter called strategic target):

+ Increase profitable capacity

+ Create influence in the market

+ Protect safety in the business

The details are as followed:

The first, about profitable capacity and interest: IN case, there is no competitors and even in case there is competitors, all companies want to maximize the profit with the least expense Target of profitable target of capital and the highest profit must be general target of all companies

The second, about creating influence in the market: In certain period, companies could invest more capital and companies could invest more capital and profitable rate could be low if we overlook the initially hot target to have the second target: create the influence in the market If company want to have good position and their trademark is known by a lot of persons with fame, companies have to spend much more expense to have that fame, however, it is not sure that profit could increase together with that rate For example, spending a lot of capital for technological innovation, increase quality of product or study of new product However, when products are sold in the market with low price to have acceptancec and knowing of consumers, which lead of comsuming habbbit Time for product research or technological innovation and deep penetration of targeted target will maximize the benefit and profitable capacity may not be achieved but achieve the second target Influence of companies in the market is achieved by the market that companies manage to control; goods density or service of the companies in comparision with total supply of that goods and service in the market, financial capacity, domestic and foreign joint venture capacity; dependence rate of other companies in the company such as: prestige and fame of companies for customers

The third, about guranteeing safety in business: Business always goes together with loss or good luck The more audicious business strategy is and the more fierce compitition is, the higher capacity in benefit collection, however, companies could still meet the risk Reason of the risk including:

- Lack knowledge and business management skill;

- Lack adaptation in competition;

- Lack economical information;

- Due to objective reason when macroscopic management mechanism changes with high inflation and seriously economical crisis, arisen counterfeit or illegal import increases; due to accident, fire, thief, disaster, due to change in law and policies are not stable

Risk is unexpected contingency, however, if during setting up the strategy, strategist accepts it, could find out the countermeasure to avoid and limit it If have countermeasure, loss will be at the lowest level

Risk prevention system becomes effective including: Diversify the product and service, buy insurance and analyze the strategy frequently

At the same time, each company could have three above strategic purposes for a time, could only propose one or two among three those targets

1.4.1.2 Part strategies

There are many ways to classify part strategies as follows:

a Based on strategic bases, they are divided:

(1) Customer –based strategy

(2) Competitor –based strategy

(3) Company’s strong point based strategies;

B.Based on the strategy’s content, they are divided into 4 types as follows:

(1) Strategies that focus on key factors:

(2) Strategy that creates relative advantage:

(3) Innovative strategies to attack:

(4) Strategies to exploit customers‘potential capacibility

c Based on marketing activities, there are four types of part strategies (1) Product strategy:

Business has to pay attention to improve typical features of their products such as durability, lifespan, colors, styles, materials, safety, packaging, the variety

of options, levels processing, after -sales services…

(2) Pricing strategy:

Is the strategy that all enterprises wish to apply as they want to provide goods with the lowest price to attract customers?

(3) Distribution strategy:

(4) Promoting communications strategy:

1.4.2 Strategy selection (GREAT)

1.4.2.1 Orientation to select strategies:

- Businesses often use growth, stable or shrinking strategy In general, most enterprises choose growth strategy to be the key factor for success in such a developing and transforming economy like Vietnam

Businesses use market penetration strategy or (and) market developing strategy or (and) product developing strategy or (and) diversification strategy Even

in order to deal with increasingly changing competitive market, an enterprise can change their strategy upon specific time or they can combine these strategies at the same time

Businesses use growth strategies by integrating horizontally or vertically Horizontal integration can use the strategic alliance plan as it is the agreements between two or among many companies to share risks, costs and benefits relating to new business opportunities Vertical integration is selected by business to compete

in a business cycle from raw materials to customers

1.4.2.2 Methods of selecting strategic plans

There are many methodes of choosing strategy, in the domain of defining argument for a company, this investigation deal with some methodes

- Selecting strategic plan by using business strategy net of General Electric

With support from Boston Consulting Group, MC.Kinsey and Co.General Electric is the first company using “business strategy net” which includes 9 boxes as illustrated in diagram no 7 as follows:

Diagram No.1.7: Business strategy net

+ Area no 1: Businesses in this area has advantage and relatively attractive

development opportunity

+ Area no 2: Businesses in this area has average attractiviveness BOD

needs to be carefull in making investment decision

+ Area no 3: Businesses in this area do not have advantage They need to

keep the market or drawback

- Selecting strategic plan by using SWOT /TOWS matrix

This matrix’s English name is (strength- weakness- opportunity- threat) Its purpose is to combine the strength and weakness with opportunity and thread suitably We do 8 setps as follows:

Step 1: List strengthes (S)

Step 2: List weaknesses (W)

Step 3: List opportunities (O)

Step 4: List threades (T)

Step 5: Combine strategies S/O

Step 6: Combine strategies S/T

Step 7: Combine strategies W/O

Step 8: Combine strategies W/T

The above implementation is sumarized in the diagram below:

Diagram no 1.8: SWOT matrix

Combine S/O will help to combine strong points of enterprises with opportunities The important thing is business has to take its advantage to exploit opportunities

Combine T/T will help to combine strong points of enterprises with risks they have to face There, enterpirses need to take advantage of its strong points to overcome risks

W/O combination is a combination of weak points of enterprises and big opportunities They need to overcome weak points to take advantage of all opportunities

W/T combinations are for the weak points and risks of enterprises The important thing is enterprises have to try to reduce their weakness and avoid threads

1.4.2.2 The most effective strategy selection:

Strategy chosen is the product of what a business makes plan In fact, a business needs to have additional plan because of market changes and they are not

previously planned In practice, additional strategies are more likely to be successful compared with planned strategies Therefore, administratiors need to be aware of the process arising strategy and feeding them as well

Strategy selection for an enterprise is a continous and innovative process It is a comparison between the strategy and goal, opportunity, environment thread, strength, weakness within the enterprise to assess the suitability of that strategy with demand and capacibility of that enterpreise Strategy plan is still only in theory if the implementation is not good despite how good that strategy is

1.5 Strategy –oriented business implementation organization

1.5.1 Business Organization structure:

1.5.1.1 Enterprise structure

Enterprise structure is a combination of components (units and individuals), with interrelationship and dependence on each other, to perform the enterprise’s business tasks

1.5.1.2 Organizational structure and business management

Organization struture and business management is a combination of components (units and individuals), with relationship and independence, which are specialized and have responsibility as well as rights, organized according to levels,

in different stages to ensure the implemenation of management functions and common purpose identified of the enterprise

Organizational structure and business management is a form of division of labor in the fields of management, work process operation of the system administrator Organizational structure of management, in one hand, reflects the structure of production, on the other hand, has a positive impact on the production development

1.5.1.3 Requirements for organizational structure management

Setting up and imporving organizational structure management must ensure the following requirements:

- Optinum: Between the stages and management levels (stage management

reflects the distribution function of horizontal management, supply management also shows the division administrative functions vertically), all set relationship with

a reasonable level of management at least in the enterprise organizational structure

so administrators are dynamic, always supervising and work for the production

- Flexibility: The organizational structure of governance capable of adapting

flexibly to any situation happening in the business and the environment

- Reliability: Organization management must ensure the accuracy of all

information used in business; thereby, ensuring coordination among activities and tasks of all parts of the business

- Economical: structure of management to use cost management achieve the

most effective result Criteria to consider this request are correlation between the costs spent on planning and results gained