SOME APPLICATIONS OF THE INTERNET FOR LANGUAGE LEARNING

HA NOI UNIVERSITY OF BUSINESS AND TECHNOLOGYDEPARTMENT OF ENGLISH MAJOR ***** GRADUATION ASSIGNMENT TOPIC: ‘ BUILDIN G BUSINESS STRATEGY FOR DOMESTIC MARKET OF MINH ANH GARMENT COMPANY..

MINISTRY OF EDUCATION AND TRAINING

HA NOI UNIVERSITY OF BUSINESS AND TECHNOLOGY

DEPARTMENT OF ENGLISH MAJOR

HA NOI UNIVERSITY OF BUSINESS AND TECHNOLOGY

DEPARTMENT OF ENGLISH MAJOR

*****

GRADUATION ASSIGNMENT

TOPIC: ‘ BUILDIN G BUSINESS STRATEGY FOR

DOMESTIC MARKET OF MINH ANH GARMENT COMPANY

LIST OF FIGURES, TABLES 5

ACKNOWLEDGEMENTS 1

INTRODUCTION 2

1 Rationale & Objectives of the study 2

2 Aims of the study 3

3 Scope of the study 3

4 Method of study 3

5 Research question 3

6 Structure of the study 3

CHAPTER 1 - THEORETICAL BACKGROUND 4

1.1 The concept of business strategy 4

1.2 Levels of strategy 4

1.3 Role of business 5

1.4 Strategy Management Process 5

1.5 The firm’s external environment analysis 6

1.5.1 Macro-environment (PEST analysis) 6

Table 1.1: PEST analysis 7

1.5.2 Industry analysis (Porter’s Five Force model) 7

1.5.3 The External Factor Evaluation (EFE) matrix 8

1.6.The firm’s Internal environment analysis 9

1.6.1.Company resource 9

1.6.2.The Internal Factor Evaluation (IFE) matrix 10

1.6.3 Setting up long-term objectives 10

1.6.4.Strategy implementation 10

CHAPTER 2 - ANALYSIS ON BUSINESS SITUATION FOR DOMESTIC MARKET OF MINH ANH GARMENT LIMITED COMPANY 12

2.1 Introduction of Minh Anh Garment Limited Company 12

2.1.1 General introduction of the company 12

2.1.2 Business lines 12

2.1.3 Organization structure 12

2.1.4 Primary products 14

2.1.5 Business results of Minh Anh Garment Co., Ltd 15

2.2.1 Political and legal environment 15

2.2.2.Economic environment 16

2.2.3 Socio-cultural environment 16

2.2.4 Scientific, technical and technology environment 17

2.3 Industry analysis 17

2.3.1 Overview of domestic garment industry 17

2.3.2.Analysis on competitive and bargain 18

2.3.2.1 Analysis on competitive pressure from existing competitors 18

2.3.2.2 Analysis on bargaining power of customers 19

2.4 Internal environment analysis 19

2.4.1 Production capacity 19

2.4.2 Marketing capacity 20

2.4.3 Technological capacity 20

2.4.4 Human resources 21

CHAPTER 3 - STRATEGY SELECTION AND SOLUTIONS FOR DOMESTIC MARKET OF MINH ANH GARMENT CO., LTD DURING THE PERIOD OF 2016-2020 22

3.1 Strategy selection 22

3.2 Strategy of Company 23

3.3 Solutions to implement product development strategy 25

3.4 Solutions on Organization structure 25

3.4.1 Solutions on Marketing 25

3.4.2 Solution of Research and development of product 26

3.4.3.Solutions on Personnel 26

3.4.4 Solutions on Finance 27

CHAPTER 4 – CONCLUSION 28 REFERENCE

LIST OF FIGURES, TABLES

Figure 1.1: Strategy Management Process 6

Figure 1.2: Porter’s Five Force Model 7

Figure 1.3: Structure of Minh Anh Garment Company Limited 12

Table 1.1: PEST analysis 7

Table1.2: Situation of the company’s capital 15

After a period of research with the hard work, I have completed the subject Iguarantee the result presented in this paper is true and has not been published in anyother work The data published in my paper is taken from the research, andstatements from the article of organizations and individuals consulted and used asprescribed

In the process of implementing my graduation paper, I have received lots ofhelp, encouragement and experiences from teachers Especially, my graduationsubject now is completed successfully thanks to all teachers’ support in HanoiUniversity of Business and Technology

First of all, I would like to express my gratitude to my supervisor, Ms.Nguyen Thi Phuong, who has generously given me invaluable assistance andguidance Without her help, my research would have never been successfullycompleted

Besides , my sincere thank is also extended to all staff of Minh Anh GarmentLimited Company who assisted me, providing data and useful information enabling

me to complete this subject

Last but not least, I am grateful to my family and friends who have given memuch encouragement during the time I carry out this paper

Hanoi,2016

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1 Rationale & Objectives of the study

Garment industry has long been strength of export of Vietnam, withabundant labor resources and lower labor costs than other countries in theregion.Vietnamese textile industry was approved development strategy up to 2016and orientations to 2020 by the Government Vietnam aims to develop textile andgarment industry to become one of the key industries, meet the increasing domesticdemand, create more jobs for the society, improve competitiveness and strongregional and global economic integration Therefore, the development of garmentindustry in the future will be given priority

However, due to the impact of the world economic crisis, the Europeancountries fall into the state of sluggish economic growth, unemployment rate in theUnited States was reduced but still high, the world’s leading economies cannotescape this trend, strengthening the development of domestic economy is becomingpopular in the world Therefore, export market of Vietnam’s garment industry willgradually be reduced Companies in the industry will be more competitive to getorders Minh Anh Garment Co., Ltd is no exception in the garment industry.However, the company’s outsourcing customers mainly come from countries likethe Czech Republic, Germany, with the economic and political situation of EasternEurope, it will not be a source of sustainable, long - term orders for the development

of the company Therefore, Minh Anh Garment Co., Ltd needs to figure out a newbusiness strategy for its development This is the reason why I decided to carry out

the research entitled: “Building business strategy for domestic market of Minh Anh Garment Limited Company in period of 2016 - 2020”.

Objectives of the study

The study is intended to:

- Analyze the business strategy for domestic market of Minh Anh GarmentCo., Ltd

- Propose solutions and recommendations for the development of Minh AnhGarment Co., Ltd

2 Aims of the study

In this context, every business needs to develop a strategy for their business

on the domestic market to help maximize the competitive advantage compared totheir competitors won market and high profits Therefore the main purpose of theproject is to build a viable competitive strategy and in line with Minh Anh GarmentCo., Ltd

3 Scope of the study

Minh Anh Garment Co., Ltd has run business for overseas outsourcing,products for the domestic market However, within the scope of this report, I focus

on the analysis of the domestic market and business strategy for the domesticmarket of Minh Anh Garment Co., Ltd

4 Method of study

- Using analysis tools as the External Factor Evaluation (EFE) matrix, theInternal Factor Evaluation (IFE) matrix, PEST analysis, Five Forces of MichaelPorter, SWOT to select business strategy

- Source: Secondary materials as articles, report, books, and Internetresources

5 Research question

The study will explore the following issues:

- What is the business strategy for domestic market of Minh Anh Garment Co., Ltd?

- What are the suggested solutions and recommendations for the

development of Minh Anh Garment Co., Ltd?

6 Structure of the study

Beside the introduction and conclusion part, the main content of this paper will be presented via three chapters:

Chapter 1: Theoretical background

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Chapter 2: Analysis on business situation and business strategy for domesticmarket of Minh Anh Garment Co., Ltd

Chapter 3: Strategy selection and solutions for domestic market of Minh AnhGarment Co., Ltd during the period of 2016 - 2020

CHAPTER 1 - THEORETICAL BACKGROUND

1.1 The concept of business strategy

Strategy is a popular term used in both daily life and business In

management, it is defined as actions taken by general managers to create the majorintended and emergent initiatives This includes utilizing resources, enhancing theperformance of companies in their external environment In the other words it can

be said as: “Strategy is a series of actions taken by an organization or individual inorder to achieve organizational goal”.(From Grigg University)

Business strategy commonly relates to a business’s objectives, which is

central in implementing a strategy However, business strategy tends to focus onassessing its competitors and setting goals to meet all existing and potentialcompetitors in the market It relates to decisive choices such as product selection,customer satisfaction, taking advantages over rivals and exploiting newopportunities, etc According to Fred R David (2011, Strategic management): “Strategic management relates to decision making of product selection, meetingcustomer demand, taking advantages over rivals and exploiting newopportunities ” He also added: “Strategic management is a tool to achieve longterm goals”

Strategic management is the “art and science of formulating, implementing,and evaluating cross - functional decisions that enable an organization to achieve itsobjectives” (Fred R David - 2011, Strategic management - Concepts and cases,13th edition, Pearson)

1.2 Levels of strategy

In a large company, the business activities are unlikely run by one singleindividual A division of responsibility in strategic decision is therefore quitelogical.Management writers have splitted strategic decisions into three levels:

1.3 Role of business

According to Arnold Anderson, the business strategy has several roles such as:

- Customer retention: One of the quickest ways to lose customers is not to

have an effective business strategy in place for customer service Develop a

program for following up on customers, and for staying in touch with customers to make sure your products are suitable Have sales people contact customers at least once a month to discuss the customer’s business, and try to find new ways to help the customer with your product

- Resources: a good business strategy can assure that company resources are

used efficiently Create business strategies that utilize all of your company

resources to help give your company a competitive advantage over the competition, develop new products that maintain or increase your market share in the industry and give you proprietary control over advancing technology in your industry

- Company expansion: a good business strategy is the ability to explore

business opportunities outside of your standard business practice to help inspire company expansion By promoting vigorous marketing and engineering research with business strategies focused on new company frontiers, you can help open up new ideas for your company that could be loosely related to your current business

1.4 Strategy Management Process

Strategy planning is the process of setting overall organizational objectives and drafting strategic plans It is a process of long-term planning Setting ultimate objectives for the firm is a necessary prelude to developing strategies for achieving those objectives Strategic planning, also called long-term planning, covers periods from 1 to 20 years Strategic planning is somewhat difficult because of uncertainty about future conditions Thus, long-term plans are more general and exclude

operational detail ( for example, functional aspects such as departmental budget

CORPRATE

STRATEGY

BUSINESSSTRATEGY

FUNCTIONALSTRATEGY

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Formulate the mission

Internal environment analysis

External environment

Setting up long-term objectives

Strategy analysis and selection

Implementing chosen strategy

Strategy evaluation

preparation, variance analysis, outsourcing decisions, material procurement budget preparation, variance analysis, outsourcing decisions, material procurement, etc.) and short-term activity Therefore, top-level management participation is a crucial element of strategic planning Strategic planning follows a formal six-step process:

Figure 1.1: Strategy management Process

(Source: Fred R David, Strategy management - Concepts and cases, 13th editions,

Pearson)

1.5 The firm’s external environment analysis

Opportunities and threats (the external environment) are identified byconsidering macro-environment factors (economic, demographic, political, legal,social, cultural, and technical) and micro-environment factors (suppliers, customers,distributors, competitors, and other competitive factors in the industry)

1.5.1 Macro-environment (PEST analysis)

There are many factors in the macro- environment that will affect thedecisions of the managers of any organization Tax changes, new laws, tradebarriers, demographic change and government policy changes are well examples of

- Government Legislation - Employment

Law, Health & Safety, Environmental,

Industry Specific, etc

- Political Pressure Groups

ECONOMICAL

- State of National Economy

- State of Industry Sector - Decline/ Growth

- State of International markets

SOCIAL

- Consumer Tastes/Preferences

- Pressure Groups

TECHNOLOGICAL

- Pace of technological change?

- New product development

(Source: www.ecommerce-now.com)

1.5.2 Industry analysis (Porter’s Five Force model)

Michael Porter (in January, 2008) provided a framework that models anindustry as being influenced by five forces The strategic business manager seeking

to develop an edge over rival firms can use this model to better understand theindustry context in which the firm operates

Porter reasoned that the stronger each factor becomes, the harder it is forfirms to negotiate a price increase to gain higher profit The influence of 5 factorsvaries over time together with the variation in industrial environment

A constantly competitive environment has a strong and direct effect to afirm’s production In the process of analyzing the environment, it is important totake note of the inter-relationship among the 5 factors:

Figure 1.2: Porter’s Five Force Model

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(Source: M.E Porter Competitive strategy, New York, Free Press 1980)

According to Harvard Business Review’s summary of Michael E Porter’s Fivecompetitive factor model (issued in January, 2008), the factors are described as followings:

(1) Threats of new entrants: identify the difficulties encountering by the new

entrants when entering the industries and the possible threats by these new entrants

to other firms in the industry

(2) Threats of product substitutes: this implies the possibility in losing

customers to the similar products or services If together with a lower price, thecancel and transfer cost is relatively small, it will become a dangerous threat to thefirm

(3) Power of consumers: this is the power in price bargaining and putting

pressure in lowering price of the consumers to a firm If the consumers’ influence isstrong enough to fluctuated revenue and profit, they will hold a critical position in astrategic implementation

(4) Power of suppliers: Similarly to the power of consumers, if supplier is

influential enough to a firm to fluctuate their revenue and profit, they will also be acrucial factor

(5) Intensity of rivalry among the competitors: Questions to ask: Is there an

intense rivalry among the competitors? Is there an outstanding competitor or arethey equally competitive to the firm?

1.5.3 The External Factor Evaluation (EFE) matrix

The EFE matrix allows strategists to summarize and evaluate economic,social, cultural, demographic, environment, political, governmental, legal,technological, and competitive information

Regardless of the number of key opportunities and threats included in EFEmatrix, the highest possible total weighed score for an organization is 4.0, and thelowest possible weighed score is 1.0

A total weighed score of 4.0 indicates that an organization is responding in

an outstanding way to existing opportunities and threats in its industry The firm’sstrategied effectively take advantage of existing opportunities and minimize thepotential adverse effects of external threats

A total weighed score of 1.0 indicates that the firm’s strategies are notcapitalizing on opportunities or avoiding external threats

1.6.The firm’s Internal environment analysis

1.6.1.Company resource

Analyzing internal environment defines strength and weakness of anorganization by interpreting information of recent achievements and unresolveddifficulties Comparing to the analysis of external environment, it is easier toacquire and there are more information relating to internal environment such as:statement of liabilities, revenues, costs, system organization and managementmodel

As a matter of fact, it is impossible to acquire a comprehensive and completeevaluation of a business Therefore, only a few major factors, which have the mostcritical influence to the production of a firm, will be assessed In order to achievethis, the first thing is to outline these major factors which will be the representatives

of the internal environment

- Financial capacity: Financial resource (cash, liabilities, bonds ) is the

main source of a business Evaluating finance of a firm relies on economicalstandards such as: profit earned per dollar spent, liquidity of bonds, ability to payliabilities comparing to competitors and within the industry By analysis theseinformation, it will be possible to define the strength and weakness of a business ininvestment, finance and market share

- Human resource capacity: Human resource is utmost important for

company’s success Only effective people can contribute efficiency to the company.Humane resource factor includes: Management board, profession and skills,experience as a leader; suitable Organization’s structure and management; skills,personality of employees, effective, and flexible policy for employees

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- Technology capacity and Production capacity: This section will examine a

firm’s facility in the research and development of product and technology Theexamination will look at the conditions to search for innovation, the distribution ofhuman, financial and technology resources and achieved results

- Marketing capacity: it is necessary to analysis customer structure of the

business, the consumer segments with quality controls and price flexibility, productvariation, corresponding marketing method and any other supportive tools Hence,this report will compare the segments and provide instructions for implementing amarketing strategy It is also important to be attentive at the potential consumptions,revenue, profit to revenue ratio, the variation of product quality, the popularity ofproducts and services, market share of the firm and effectiveness of previousmarketing campaign Afterward, this report will examine the stability of the firm’ssupply to the market In combination with the life cycle of a product, it is necessary

to manage researches and development of new products (new opportunities)

1.6.2.The Internal Factor Evaluation (IFE) matrix

The IFE matrix is a strategic management tool for auditing or evaluatingmajor strengths and weaknesses in functional areasof a business IFE matrix alsoprovides a basis for identifying and evaluating relationship among those areas

The IFE matrix together with EFE matrix is a strategy-formulation tool thatcan be utilized to evaluate how a company is performing in regards to identifiedinternal strengths and weaknesses of a company

1.6.3 Setting up long-term objectives

Basing on the situation analysis, what should our new business be, in terms

of what products it will sell, where it will sell them, and how its products or serviceswill differ from its competitors? Long-term objectives represent the results expectedfrom pursuing certain strategies The time frame for objectives and strategies should

be consistent usually from two to five years

1.6.4.Strategy implementation

Overlooking often is the key component necessary to supportimplementation: people, resources, and culture All components must be in place inorder to move from creating the plan to activating the plan

People: The first stage of implementing your plan is to make sure to have the

right people on board The right people include those who have requiredcompetencies and skills that are needed to support the plan In the months followingthe planning process, expand employee skills through training, recruitment, or newhires to include new competencies required by the strategic plan

Resources: You need to have sufficient funds and enough time to support

implementation Often, true costs are underestimated or not identified True costscan include a realistic time commitment from staff to achieve a goal, a clearidentification of expenses associated with a tactic, or unexpected cost overruns by avendor Additionally, employees must have enough time to implement what may beadditional activities that they aren’t currently performing

Culture: Create an environment that connects employees to the

organization’s mission and that makes them feel comfortable To reinforce theimportance of focusing on strategy and vision, reward success Develop somecreative positive and negative consequences for achieving or not achieving thestrategy The rewards may be big or small, as long as they lift the strategy above

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Deputy Business DirectorDeputy Production Director

CHAPTER 2 - ANALYSIS ON BUSINESS SITUATION FOR DOMESTIC MARKET OF MINH ANH GARMENT LIMITED COMPANY

2.1 Introduction of Minh Anh Garment Limited Company

2.1.1 General introduction of the company

Name: Minh Anh Garment Limited Company

Director: Mr Vu Van Toan

Address: Pho Noi B Industrial Zone - Nghia Hiep - Yen My - Hung Yen

- Purchasing equipment, supplies and materials for the garment industry

- Domestic garment production

- Garment outsourcing for export