LV Thạc sỹ_Build business strategy for M1 Communication to become the No1 domestic electronics manufacturing

LIST OF PICTURESPicture 1: Stages of Strategic Management...8 Picture 2: Three stage of Strategy Implementation...11 Picture 3: Poter’s Fivee Model...12 Picture 4: M1 Communication Compa

TABLE OF CONTENTS

LIST OF ABBREVIATIONS iii

LIST OF PICTURES iv

LIST OF TABLE v

ABSTRACT vi

INTRODUCTION 1

I The Proposal and Signification of Business Strategy 1

II The Target of Research 1

III Objective, Scope and Methodology of Research 2

IV Research Structure 2

ACKNOWLEDGEMENT 3

CHAPTER 1: THEORY OF STRATEGY MANAGEMENT 4

1 OVERVIEW STRATEGY MANAGEMENT 4

1.1 Defining Strategic Management 4

1.2 Key Term in Strategic Management 6

1.3 Three Stages of Strategic Management process 8

1.4 The Strategic Management Model 10

2 STRATEGY FORMULATION 12

2.1 Scan External Factor 12

2.1.1 External Opportunities and Threat: 12

2.1.2 Porter Five forces analysis 12

2.1.3 Conduct a Competitive Profile Matrix (CPM) 13

2.1.4 Contrucs an External Factor Evaluation Matrix (EFE) 14

2.2 Scan Internal System 15

2.2.1 Analysis Internal Resources (Internal Audit) 15

2.2.2 Strengths and Weakness: T.O.W.S Matrix, SPACE Matrix, IFE Matrix 15

2.2.3 Selection the Most Advantages Strategy: QSPM 17

3 STRATEGY IMPLEMENTATION AND EVALUATION 18

3.1 Implementing Strategy 18

3.1.1 The Nature of Strategy Implementation 18

3.1.2 Annual Objectives 19

3.1.3 Policies 19

3.1.4 Resource Allocation 20

3.1.5 Managing Conflict 20

3.2 Strategy Review, Evaluation, and Control 21

3.2.1 Describe a practical framework for evaluating strategies 21

3.2.2 The Balanced Scorecard 23

3.2.3 Contingency Planning 23

CHAPTER 2: M1 COMMUNICATION COMPANY – EXTERNAL AND INTERNAL ASSESSMENT 25

1 GENERAL INFORMATION OF M1 COMMUNICATION COMPANY 25

1.1 History, Milestone, Organization, Culture History & Milestone 25

1.2 Vision and Culture 26

1.3 External Opportunities and Threat 30

1.4 The Internal Assessment 47

CHAPTER 3: STRATEGY IMPLEMENTATION AND EVALUATION 55

1 STRATEGY FORMULATION 55

1.1 Analysis of strengths, weaknesses, threats and challenges 55

2 IMPLEMENT STRATEGY AND EVALUATE 60

2.1 Key to Strategy Implement 60

2.2 Resource Allocation 62

2.3 Matching Struture with Strategy 62

CONCLUSION 64

REFERENCES 65

Viettel: Viettel Group

SWOT: Strengths, Weakness, Opportunities, Threats MatrixQSPM: Quantitative Strategic Planning Matrix

LIST OF PICTURES

Picture 1: Stages of Strategic Management 8

Picture 2: Three stage of Strategy Implementation 11

Picture 3: Poter’s Fivee Model 12

Picture 4: M1 Communication Company Organization Chart 27

Picture 5: The population structure of Vietnam in December 2011 32

Picture 6: The five forces model of Michael Porter 41

Picture 7: M1 Company has the model with 5 competitive forces by M Porter 45

LIST OF TABLES

Table 1: List of Products 28

Table 2: Competitive Profiles matrix of M1, Samsung and Huawei 40

Table 3: M1 current competitors 43

Table 4: Finance Report (Brief version) 47

Table 5: Distribution of personnel qualifications 49

Table 6 The QSP Matrix 59

Table 7 Implementation roadmap 63

For nearly three years we have been discussing important global macroeconomic trends in order to assess the progress and risks of what has been labeled aglobal economic “recovery” In fact, the emerging world has been largelyresponsible for pulling up the advanced world from the depths of the financialapocalypse When compared to advanced nations, emerging nations entered theglobal collapse with a much lower level of debt, perhaps more important, emergingnations continue to add to their trade surplus and bank reserves Thus, emergingnations remain on the leading edge of economic growth

In 2012, the global economy continued difficulties, economic downturn occurs

in almost all areas worldwide According to the World Bank (World Bank) and theInternational Monetary Fund (IMF), the global economic crisis will continue to facemany challenges and peak in 2013 In the context of global economic fluctuationsand difficulties have a negative impact on the economy has deep integration andlarge aperture as the country's economy

Besides many of the services and manufacturing industries are fallen on hardtimes such as real estate, shipbuilding, coal mining, cement so the growth of theViet Nam Electronic Manufacturing Industry is a bright spot for the rapid andsustainable development since 2011 In 2011 with exports of $ 6.89 billion(accounted for 7% of total exports) and in 2012 (as of 15 October 2012) exportsworth more than $9 billion (accounted for 10.2% of total exports)

M1 Communication One Member Limited Liability Company (M1Communication Company) is a member of the Viettel Group with main business isproducing military communication equipments and consumer electronics products

to continue the development trend of the industry to set up an appropriate strategy

to have one right direction Strategic planning is built based on external factors andsubjective within the enterprise, systematic analysis of information from which toestablish the orientation, objectives, planning the business activities in the short

term and in the long term, to focus efforts and resources on the main objectives sothat the most effective, response to the uncertain situation, adapt to change.Recognized that the special importance role of strategic development for the

existence and development of the business, our team decided on the topic "Build business strategy for M1 Communication One Member Limited Liability Company

to become the No 1 Domestic Electronics Manufacturing Service Company in the period 2013 - 2015" with the desire to apply the learned knowledge to contribute to

the sustainable development of the company in the current situation

I The Proposal and Signification of Business Strategy

All companies have a strategy, even if it's not formal, structured and irregular.All organizations are facing somewhere, but unfortunately some companies do notknow where they went

The company should have a proactive way rather than just react to theoperating environment, and should attempt to influence, predict and create theenvironment rather than just react to the events Strategic management processesthis It represents a logical, systematic and objective in determining the futuredirection of a business

The strategic-management process does not end when the company’s leadersdecides what strategy or strategies to pursue There must be a translation of strategicthought into strategic action This translation is much easier if managers andemployees of the firm understand the business, feel a part of the company, andthrough involvement in strategy-formulation activities have become committed tohelping the organization succeed Without understanding and commitment, strategy-implementation efforts face major problems

Implementing strategy affects an organization from top to bottom; it affects allthe functional and divisional areas of a business It is beyond the purpose and scope

of this text to examine all of the business administration concepts and toolsimportant in strategy implementation

II.The Target of Research

The Research focus on the following issues:

- The basic theory of strategy and strategy management

- The analytical models are useful for the formation and strategic selection

- Current situation of strategic implementation process of M1 CommunicationCompany in the context of the Vietnam economy

- Analyze the internal and external factors that have impact on the strategicimplementation process of the Company

- Proposed some solutions that is suitable for the Company’s business strategy

in the period 2013-2015

III Objective, Scope and Methodology of Research

- Objects and scope: Focuses the current strategy management activities of theM1 Communication Company and provides solutions in the future

- Methodology: Research uses two main types of information, which isprimary and secondary information Secondary information was collected frommany different sources, including significant of which is Business Plans, FinanceStatement

IV Research Structure

ABSTRACT

INTRODUCTION

ACKNOWLEDGEMENT

CHAPTER 1: THEORY OF STRATEGY MANAGEMENT

1 OVERVIEW STRATEGY MANAGEMENT

2 STRATEGY FORMULATION

3 STRATEGY IMPLEMENTATION AND EVALUATION

CHAPTER 2: M1 COMMUNICATION COMPANY – EXTERNAL AND INTERNAL ASSESSMENT

1 GENERAL INFORMATION OF M1 COMMUNICATION COMPANY CHAPTER 3: STRATEGY IMPLEMENTATION AND EVALUATION

1 STRATEGY FORMULATION

2 IMPLEMENT STRATEGY AND EVALUATE

CONCLUSION

REFERENCES

We certify that all the content of this project is the effort during the process ofstudying, understanding as well as topic selection by the author team members(besides the reference document and data enclosed)

We hereby acknowledge that this written project has not been collected by anyother studying or training program

Hanoi, 18 th November 2012

CHAPTER 1: THEORY OF STRATEGY MANAGEMENT

1 OVERVIEW STRATEGY MANAGEMENT

1.1 Defining Strategic Management

The Concept of Strategic Management

Strategic management consists of the analysis, decisions, and actions anorganization undertakes in order to create and sustain competitive advantages Thisdefinition captures two main elements that go to the heart of the field of strategicmanagement

First, the strategic management of an organization entails three ongoingprocesses: analysis, decisions, and actions That is, strategic management isconcerned with the analysis of strategic goals (vision, mission, and strategicobjectives) along with the analysis of the internal and external environment of theorganization Next, leaders must make strategic decisions These decisions, broadlyspeaking, address two basic questions: What industries should we compete in? Howshould we compete in those industries? These questions also often involve anorganization’s domestic as well as its international operations And last are theactions that must be taken Decisions are of little use, of course, unless they areacted on Firms must take the necessary actions to implement their strategies Thisrequires leaders to allocate the necessary resources and to design the organization tobring the intended strategies to reality As we will see in the next section, this is anongoing, evolving process that requires a great deal of interaction among these threeprocesses

Second, the essence of strategic management is the study of why some firmsoutperform others Thus, managers need to determine how a firm is to compete sothat it can obtain advantages that are sustainable over a lengthy period of time Thatmeans focusing on two fundamental questions: How should we compete in order tocreate competitive advantages in the marketplace? For example, managers need todetermine if the firm should position itself as the low-cost producer, or develop

products and services that are unique which will enable the firm to charge premiumprices-or some combination of both

Managers must also ask how to make such advantages sustainable, instead ofhighly temporary, in the marketplace That is: How can we create competitiveadvantages in the marketplace that are not only unique and valuable but alsodifficult for competitors to copy or substitute?

Michael Porter argues that sustainable competitive advantage cannot beachieved through operational effectiveness alone Most of the popular managementinnovations of the last two decades-total quality, just-in-time, benchmarking,business process reengineering, outsourcingall are about operational effectiveness.Operational effectiveness means performing similar activities better than rivals.Each of these is important, but none lead to sustainable competitive advantage, forthe simple reason that everyone is doing them Strategy is all about being differentfrom everyone else Sustainable competitive advantage is possible only throughperforming different activities from rivals or performing similar activities indifferent ways Companies such

- Strategic Management can be defined as an art and science to set, implementand evaluate decisions related to various functions allows an organization to achievethese goals

- The Strategic Management process can be described as a practical approach,rational and systematic to make major decisions in the organization It aims toorganize information and quality manner to allow decisions to be made inconditions of uncertainty However, strategic management is not a pure scienceappropriate to approach carefully, closely, step by step

- The Strategic Management process is based on the belief that theorganization will continue to control events inside and outside to be able to makechanges when necessary The speed and extent of the changes affecting theorganization is growing rapidly in a scary way To survive, all organizations must be

able to acumen to recognize and adapt to change Strategic Management processaims to enable organizations to adapt effectively to changes in the long term.

1.2 Key Term in Strategic Management

- Business tasks:

The mission of the business is to set priorities, strategies, plans and theallocation of work This is the starting point for setting up task manager andespecially the establishment of the management structure

Every organization has a single purpose and a reason to exist The only waythis should be reflected in the report of the task Nature of business tasks can beexpressed as a competitive advantage or disadvantage of the Company Anorganization will achieve a higher sense of purpose when strategists, managers, staffdevelopment and convey clear business mission

A good mission statement should show the customer (organization), product,

or service, concern for public image, concern for employees These basic standardsserve as a framework suitable for evaluating and writing mission statements

- Assessment of the external factors:

The important influence of the environment can be divided into five maincategories: (1) economic impact; (2) The impact of cultural, social, geographic anddemographic; (3) Effect of law, government and politics; (4) The impact oftechnology; (5) The effect of competition The environmental trends and eventshave a huge impact on all of the products, services, and organizations in the worldmarket

- Assessment of the Company's internal situation:

Every organization has its strengths and weaknesses in the areas of business.None of the Company equally strong or weak in all aspects The strengths /weaknesses inside along with the opportunities / risks from external and obvioustasks are the basic points to consider when setting goals and strategies Theobjectives and strategies are designed to take advantage of the strengths and khacp

gore weaknesses within the internal control region of the strategic managementprocess.

- Strategic analysis and choice:

Strategic analysis and choice largely subjective decisions based on objectiveinformation Strategic analysis and choice in order to determine the active processmay choose to ask them which company can complete its responsibilities andobjectives Strategies, objectives, and current mission of the company plus theinformation inside and outside the control will provide the basis for the formationand evaluation of strategic alternatives feasible

- Implementation strategy: The management issues

When the company decided to pursue one or more of the strategy, the strategicmanagement process does not mean the end There must be a shift strategic thoughtinto strategic action The translation would be a lot easier if the administrators andstaff to understand the company, feel they are part of it, and through activeparticipation in the implementation of strategy to become attached committed tohelping the company succeed Without understanding and commitment, strategicenforcement efforts will encounter many problems

Implementation strategy: The problem of marketing, finance / accounting,research and development and information systems

The strategy does not have a chance to be successful in the organization is notgood marketing their goods and services, or the company does not have sufficientworking capital necessary or at the tech company produce poor quality products, or

in the company information system weaknesses

Detailed issues including market segmentation, market positioning, evaluatethe usefulness of business, determine the extent to which the debt and / or stockshould be used as a source of capital , preparation of financial statements estimates,contract research and development with organizations outside the company, forming

a system of information support The army and the participation of administrators

and course members will be crucial for the success of the activities of marketing,finance/accounting, research and development and information systems.

- Evaluation of strategies:

The strategy is too rigid mold and become obsolete when the environmentalconditions inside or outside the company change So the strategy required to review,evaluate and adjust the implementation strategy

Strategic management process results in decisions that can bring significantlong-term results, in contrast to the strategic decision errors can cause a seriousdisadvantage and may be very difficult Therefore, most strategists agree thatstrategic assessment is essential to the prosperity of the organization, the timelyassessment can alert administrators to problems or difficulties can occur before asituation becomes serious The assessment strategy consists of three basicoperations: (1) control the fundamental basis of the strategy of a company; (2)Compare the results you want with real results; (3) Receiving function properly forensuring that work is carried out in accordance with the plan

1.3 Three Stages of Strategic Management process.

Picture 1: Stages of Strategic Management.

- Forming strategic phase

Forming is the process of establishing strategic business tasks, performinvestigations to identify defective elements inside and outside, set long-term goalsand strategic choice between the change world Sometimes ia the formation of thestrategy is also known as "strategic planning" The difference between strategic

Planning and

Preparation Set Direction

Review and Evaluate

planning and strategic management strategic management, including theimplementation and evaluation strategies.

Three basic operations in the formation of the strategy is to conduct research,intuitive harmony and analysis, and decision making Conduct research related tothe collection and processing of information about the market and the business ofthe Company This process is sometimes referred to as "cursory review businessenvironment." In essence, the study is important to determine the strengths andweaknesses in the areas of business functions Internal factors can be identified asways to calculate the ratio, performance measurement, and compared to theprevious period and with the industry average

- Phase implementation strategy

Implementation of the strategy is often called the action stage of strategicmanagement Implementing means mobilizing administrators and staff toimplement the strategy has been set up

Three basic operations of the implementation strategy is to establish annualobjectives, policy making, and distribution of resources Often considered the mostdifficult stage in the strategic management process, the implementation of thestrategy requires discipline, dedication and self-sacrifice of the individual.Successful implementation strategy revolves around its ability to promote themanagement staff in the capital is an art rather than a science The strategy proposedbut not implemented will not serve any useful purpose

The implementation of the strategy include the development of strategicfunding to support the program, culture and environment while promotingemployee linked reward systems for both the long term and annual goals Strategicenforcement activities affect all staff and administrators in organizations

- Strategic assessment period

The last phase of strategic management is a strategic assessment All strategiesdepending on the future change because of factors inside and outside the regularchange

Three major activities of this phase are: (1) Consider the elements is the basisfor the current strategy; (2) Measurement of achievement, and (3) Implement thecorrective actions Strategic evaluation period is necessary because the currentsuccess does not guarantee future success The success always creates newproblems, the organization thought to satisfy the expense of the decline.

The active formulation, implementation and evaluation of strategies occur atall three levels in a large organization: senior, department or business unit levelstrategy, and functional levels By maintaining information and interactionrelationships between administrators and staff in the ranks, strategic results help for

a functional division of the company into a competitive team Most smallbusinesses and some large businesses can not supply parts or strategic businessunits, so these organizations have only two levels

1.4 The Strategic Management Model

- The strategic management process can be studied and applied to the use of amodel Each model represents a certain kind of process

- Comprehensive strategic management model:

This process is widely accepted This model does not guarantee success, but itcan make a clear and practical approach in the formulation, implementation andevaluation of strategies The relationship between the major components of thestrategic management process is shown in the model

Picture 2: Three stage of Strategy Implementation

Define the tasks and objectives, the organization's current strategy is a startingpoint meeting in strategic management because the current situation and conditions

of the Company may exclude a number of strategies and even may impose aspecific action Each organization has a mission, goals and strategies, even if thesefactors are not set, written or formal communication

Strategic management process is dynamic and continuous A change in any ofthe major components in the model may require a change in one or all of the othercomponents Strategic management process never really ends

In fact the process of strategic management are not clearly divided and strictlyimplemented as indicated in the model The strategist does not make the processstep-by-step manner

2 STRATEGY FORMULATION

2.1 Scan External Factor

2.1.1 External Opportunities and Threat:

Social, cultural, demographic, and environmental changes have a major impact

on virtually all products, services, markets, and customers Small, large, for-profit,and nonprofit organizations in all industries are being staggered and challenged bythe opportunities and threats arising from changes in social, cultural, demographic,and environmental variables

For industries and firms that depend heavily on government contracts orsubsidies, political forecasts can be the most important part of an external audit.Changes in patent laws, antitrust legislation, tac rates, and loobying activities canaffect firms signigicantly The increasing global interdependence among economies,markets, governments, and organizations makes it imperative that firms consider thepossible impact of political variables on the formulation and implementation ofcompetitive strategies

2.1.2 Porter Five forces analysis

Poter’s Fivee – Forces Model of competitive analysis is a widely usedapproach for developing strategies in many industries The intensity of competitionamong firms varies widely across industries According to Porter, the nature ofcompetitiveness in a given industry can be viewed as a composite of five forces

Picture 3: Poter’s Fivee Model

- Rivalry among competing firms.

- Potential entry of new competitors

- Potential development of substitute products

- Bargaining power of suppliers

- Bargaining power of consumers

The following three steps for using Porter’s Five – Forces Model can indicatewhether competition in a given industry is such that the firm can make anacceptable profit:

- Identify key aspects or elements of each competitive force that impact thefirm

- Evaluate how strong and important each element is for the firm

- Decide whether the collective strength of the elements is worth the firmentering or staying in the industry

2.1.3 Conduct a Competitive Profile Matrix (CPM).

Competitive Profile Matrix (CPM) is a strategic management tool which isused to identify the major strengths and weaknesses of a firm in relation to therival’s firm strategic position On the basis of this comparison, the firm can designwise offensive or defensive strategies Two types of systems can be used for theconstruction of competitive profile matrix i.e weighted rating system andunweighted rating system It is important to note that the meaning of weights andtotal weighted scores is same in both EFE (external factor evaluation) and CPM(competitive profile matrix)

The Competitive Profile Matrix (CPM) indentifies a firm’s major competitorsand its particular strengths and weaknesses in relatioin to a sample firm’s strategicposition The weights and total weighted scores in both a CPM and an EFE have thesame meaing However, critical success factors in a CPM include both internal andexternal issues; therefore, the ratings refer to strengths and weaknesses, where 4 =major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness.The critical success factors in a CPM are not grouped into opportunities and threats

as they are in an EFE In a CPM, the ratings and total weighted scores for rivalfirms can be compared to the sample firm This comparative analysis provides

important internal strategic information Avoid assigning the same rating to firmsincluded in your CPM analysis.

2.1.4 Contrucs an External Factor Evaluation Matrix (EFE).

An External Factor Evaluation (EFE) Matrix allows strategists to summarizeand evaluate economic, social, cultural, demographic, envionmental, political,governmental, legal, technological, and competitive information The EFE Matrixcan be developed in five steps:

- List key external factors as identified in the external – audit process Include

a total of 15 to 20 factors, including both opportunities and threats, that affect thefirm and its industry List the opportunities first and then the threats Be as specific

as possible, using percentages, ratios, and comparative numbers whenever possible

- Assign to each factor a weight that ranges from 0.0 (not important) to 1.0(very important) The weight indicates the ralative importance of that factor to beingsuccessful in the firm’s industry Opportunities often receive higher weights thanthreats, but threats can receive high weights if they are especially severe orthreatening Appropriate weights can be determined by comparing successful withunsuccessful competitors or by discussing the factor and reaching a groupconsensus The sum of all weights assigned to the factors must equal 1.0

- Assign a rating between 1 and 4 to each key external factor to indicate howeffectively the firm’s current strategies respond to the factor, where 4 = the response

is superior, 3 = the response is above average, 2 = the response is average, and 1 =the response is poor Ratings are based on effectiveness of the firm’s strategies.Rating are thus company – based, whereas the weights in Step 2 are industry –based It is important to note that both threats and opportunities can receive a 1,2,3,

or 4

- Multiply each factor’s weight by its rating to determine a weighted score

- Sum the weighted scores for each variable to determine the total weightedscore for the organization

2.2 Scan Internal System

2.2.1 Analysis Internal Resources (Internal Audit)

The process of performing an internal audit closely parallels the process ofperforming an external audit Representative managers and employees fromthroughout the firm need to be involved in determining a firm’s strengths andweaknesses The internal audit requires gathering and assimilating informationabout the firm’s management, marketing, finance/accounting,production/operations, research and development (R&D), and managementinformation systems operations

Performing an tinternal audit requires gathering, assimilating, and evaluatinginformation about the firm’s operations Some researchers emphasize theimportance of the internal audit part of the strathegic mannagement process bycomparing it to the external audit

2.2.2 Strengths and Weakness: T.O.W.S Matrix, SPACE Matrix, IFE Matrix IFE Matrix:

Internal Factor Evaluation (IFE) matrix is a strategic management tool forauditing or evaluating major strengths and weaknesses in functional areas of abusiness IFE matrix also provides a basis for identifying and evaluatingrelationships among those areas The Internal Factor Evaluation matrix or short IFEmatrix is used in strategy formulation

The IFE Matrix together with the EFE matrix is a strategy-formulation toolthat can be utilized to evaluate how a company is performing in regards to identifiedinternal strengths and weaknesses of a company The IFE matrix methodconceptually relates to the Balanced Scorecard method in some aspects IFE Matrixcan be developed in five steps:

- List key internal factors as indentified in the internal-audit process Use atotal of from 10 to 20 internal factors, including both strengths and weaknesses Liststrengths first and then weaknesses Be as specific as possible, using percentages,ratios, and comparative numbers

- Assign a weight that ranges from 0.0 (not important) to 1.0 (all-important) toeach factor The weight assigned to a given factor indicates the relative importance

of the factor to being successful in the firm’s industry Regardless of whether a keyfactor is an internal strength or weakness, factor considered to have the greatesteffect on organizational performance should be assigned the highest weights Thesum of all weights must equal 1.0

- Assign a 1-to-4 rating to ech factor to indicate whether that factor represents

a major weakness (rating = 1), a minor weakness (rating = 2) a minor strength(rating = 3) or a major strength (rating = 4) Note that strengths must receive a 3 or

4 rating and weaknesses must receive a 1 or 2 rating Ratings are thus based, whereas the weigths in step 2 are industry-based

company Multiply each factor’s weight by its rating to determine a weighted score foreach variable

- Sum the weighted scores for each variable to determine the total weightedscore for the organization

When a key internal factor is both a strength and a weakness, the factor should

be included twice in the IFE Matrix, and a weight and rating should be assigned toeach sratement

T.O.W.S Matrix:

The Threats – Opportunities –Weaknesses - Strengths (TOWS) Matrix is animportant matching tool that helps managers develop four types of strategies: SO(strengths-opportunities) Strategies, WO (weaknesses-opportunities) Strategies, ST(strengths-threats) Strategies, and WT (weaknesses-threats) Strategies Matchingkey external and internal factor is the most difficult part of developing a TOWSMatrix and requires good judgment – and there is no one best set of matches

There are eight steps involved in constructing a TOWS Matrix:

- List the firm’s key external opportunities

- List the firm’s key external threats

- List the firm’s key internal strengths

- List the firm’s key internal weaknesses.

- Match internal strengths with external opportunities, and record the resultant

SO Strategies in the appropriate cell

- Match internal weaknesses with external opportunities, and record theresultant WO Strategies

- Match internal strengths with external threats, and record the sesultant STStrategies

- Match internal weaknesses with external threats, and record the resultant WTStrategies

2.2.3 Selection the Most Advantages Strategy: QSPM

Quantitative Strategic Planning Matrix (QSPM) is a high-level strategicmanagement approach for evaluating possible strategies Quantitative StrategicPlanning Matrix or a QSPM provides an analytical method for comparing feasiblealternative actions The QSPM method falls within so-called stage 3 of the strategyformulation analytical framework

The Quantitative Strategic Planning Matrix or a QSPM approach attempts toobjectively select the best strategy using input from other management techniquesand some easy computations In other words, the QSPM method uses inputs fromstage 1 analyses, matches them with results from stage 2 analyses, and then decidesobjectively among alternative strategies

Stage 1: The first step in the overall strategic management analysis is used toidentify key strategic factors This can be done using, for example, the EFE matrixand IFE matrix

Stage 2: After we identify and analyze key strategic factors as inputs forQSPM, we can formulate the type of the strategy we would like to pursue This can

be done using the stage 2 strategic management tools, for example the SWOTanalysis (or TOWS), SPACE matrix analysis, BCG matrix model, or the IE matrixmodel

Stage 3: The stage 1 strategic management methods provided us with keystrategic factors Based on their analysis, we formulated possible strategies in stage

2 Now, the task is to compare in QSPM alternative strategies and decide which one

is the most suitable for our goals

The stage 2 strategic tools provide the needed information for setting up theQuantitative Strategic Planning Matrix - QSPM The QSPM method allows us toevaluate alternative strategies objectively Conceptually, the QSPM in stage 3determines the relative attractiveness of various strategies based on the extent towhich key external and internal critical success factors are capitalized upon orimproved The relative attractiveness of each strategy is computed by determiningthe cumulative impact of each external and internal critical success factor

3 STRATEGY IMPLEMENTATION AND EVALUATION

3.1 Implementing Strategy

3.1.1 The Nature of Strategy Implementation

Successful strategy formulation does not guarantee successful strategyimplementation It is always more difficult to do something (strategyimplementation) than to say you are going to do it (strategy formulation)! Althoughinextricably linked, strategy implementation is fundamentally different fromstrategy formulation Strategy formulation and implementation can be contrasted inthe following ways:

• Strategy formulation is positioning forces before the action

• Strategy implementation is managing forces during the action

• Strategy formulation focuses on effectiveness

• Strategy implementation focuses on efficiency

• Strategy formulation is primarily an intellectual process

• Strategy implementation is primarily an operational process

• Strategy formulation requires good intuitive and analytical skills

• Strategy implementation requires special motivation and leadership skills

• Strategy formulation requires coordination among a few individuals

• Strategy implementation requires coordination among many individuals.

3.1.2 Annual Objectives

Establishing annual objectives is a decentralized activity that directly involvesall managers in an organization Active participation in establishing annualobjectives can lead to acceptance and commitment Annual objectives are essentialfor strategy implementation because they (1) represent the basis for allocatingresources; (2) are a primary mechanism for evaluating managers; (3) are the majorinstrument for monitoring progress toward achieving long-term objectives; and (4)establish organizational, divisional, and departmental priorities

Annual objectives should be compatible with employees’ and managers’values and should be supported by clearly stated policies More of something is notalways better Improved quality or reduced cost may, for example, be moreimportant than quantity It is important to tie rewards and sanctions to annualobjectives so that employees and managers understand that achieving objectives iscritical to successful strategy implementation Clear annual objectives do notguarantee successful strategy implementation, but they do increase the likelihoodthat personal and organizational aims can be accomplished Overemphasis onachieving objectives can result in undesirable conduct, such as faking the numbers,distorting the records, and letting objectives become ends in themselves Managersmust be alert to these potential problems

3.1.3 Policies

Changes in a firm’s strategic direction do not occur automatically On a to-day basis, policies are needed to make a strategy work Policies facilitate solvingrecurring problems and guide the implementation of strategy Broadly defined,policy refers to specific guidelines, methods, procedures, rules, forms, andadministrative practices established to support and encourage work toward statedgoals Policies are instruments for strategy implementation Policies set boundaries,constraints, and limits on the kinds of administrative actions that can be taken to

day-reward and sanction behavior; they clarify what can and cannot be done in pursuit

of an organization’s objectives

3.1.4 Resource Allocation

Resource allocation is a central management activity that allows for strategyexecution In organizations that do not use a strategic-management approach todecision making, resource allocation is often based on political or personal factors.Strategic management enables resources to be allocated according to prioritiesestablished by annual objectives Nothing could be more detrimental to strategicmanagement and to organizational success than for resources to be allocated inways not consistent with priorities indicated by approved annual objectives Allorganizations have at least four types of resources that can be used to achievedesired objectives: financial resources, physical resources, human resources, andtechnological resources Allocating resources to particular divisions anddepartments does not mean that strategies will be successfully implemented Anumber of factors commonly prohibit effective resource allocation, including anoverprotection of resources, too great an emphasis on short-run financial criteria,organizational politics, vague strategy targets, a reluctance to take risks, and a lack

of sufficient knowledge

3.1.5 Managing Conflict

Interdependency of objectives and competition for limited resources oftenleads to conflict Conflict can be defined as a disagreement between two or moreparties on one or more issues Establishing annual objectives can lead to conflictbecause individuals have different expectations and perceptions, schedules createpressure, personalities are incompatible, and misunderstandings Establishingobjectives can lead to conflict because managers and strategists must make trade-offs, such as whether to emphasize short-term profits or long-term growth, profitmargin or market share, market penetration or market development, growth orstability, high risk or low risk, and social responsiveness or profit maximization.Trade-offs is necessary because no firm has sufficient resources pursue all strategies

to would benefit the firm Conflict is unavoidable in organizations, so it is importantthat conflict be managed and resolved before dysfunctional consequences affectorganizational performance Conflict is not always bad An absence of conflict cansignal indifference and apathy Conflict can serve to energize opposing groups intoaction and may help managers identify problems Various approaches for managingand resolving conflict can be classified into three categories: avoidance, diffusion,and confrontation Avoidance includes such actions as ignoring the problem inhopes that the conflict will resolve itself or physically separating the conflictingindividuals (or groups) Diffusion can include playing down differences betweenconflicting parties while accentuating similarities and common interests,compromising so that there is neither a clear winner nor loser, resorting to majorityrule, appealing to a higher authority, or redesigning present positions Confrontation

is exemplified by exchanging members of conflicting parties so that each can gain

an appreciation of the other’s point of view or holding a meeting at whichconflicting parties present their views and work through their differences

3.2 Strategy Review, Evaluation, and Control

3.2.1 Describe a practical framework for evaluating strategies.

The strategic-management process results in decisions that can havesignificant, longlasting consequences Erroneous strategic decisions can inflictsevere penalties and can be exceedingly difficult, if not impossible, to reverse Moststrategists agree, therefore, that strategy evaluation is vital to an organization’s well-being; timely evaluations can alert management to problems or potential problemsbefore a situation becomes critical

Strategy evaluation includes three basic activities: (1) examining theunderlying bases of a firm’s strategy, (2) comparing expected results with actualresults, and (3) taking corrective actions to ensure that performance conforms toplans

Strategy evaluation is important because organizations face dynamicenvironments in which key external and internal factors often change quickly and

dramatically Success today is no guarantee of success tomorrow! An organizationshould never be lulled into complacency with success Countless firms have thrivedone year only to struggle for survival the following year.

A revised IFE Matrix should focus on changes in the organization’smanagement, marketing, finance/accounting, production/operations, R&D, andmanagement information systems strengths and weaknesses A revised EFE Matrixshould indicate how effective a firm’s strategies have been in response to keyopportunities and threats This analysis could also address such questions as thefollowing:

 How have competitors reacted to our strategies?

 How have competitors’ strategies changed?

 Have major competitors’ strengths and weaknesses changed?

 Why are competitors making certain strategic changes?

 Why are some competitors’ strategies more successful than others?

 How satisfied are our competitors with their present market positions andprofitability?

 How far can our major competitors be pushed before retaliating?

 How could we more effectively cooperate with our competitors?

Measuring Organizational Performance

Another important strategy-evaluation activity is measuring organizationalperformance This activity includes comparing expected results to actual results,investigating deviations from plans, evaluating individual performance, andexamining progress being made toward meeting stated objectives Both long-termand annual objectives are commonly used in this process Criteria for evaluatingstrategies should be measurable and easily verifiable Criteria that predict resultsmay be more important than those that reveal what already has happened Reallyeffective control requires accurate forecasting

Taking Corrective Actions

The final strategy-evaluation activity, taking corrective actions, requiresmaking changes to competitively reposition a firm for the future Taking correctiveactions does not necessarily mean that existing strategies will be abandoned or eventhat new strategies must be formulated.

3.2.2 The Balanced Scorecard

The Balanced Scorecard is an important strategy-evaluation tool It is aprocess that allows firms to evaluate strategies from four perspectives: financialperformance, customer knowledge, internal business processes, and learning andgrowth The Balanced Scorecard analysis requires that firms seek answers to thefollowing questions and utilize that information, in conjunction with financialmeasures, to adequately and more effectively evaluate strategies beingimplemented:

 How well is the firm continually improving and creating value alongmeasures such as innovation, technological leadership, product quality, operationalprocess efficiencies, and so on?

 How well is the firm sustaining and even improving upon its corecompetencies and competitive advantages?

 How satisfied are the firm’s customers?

3.2.3 Contingency Planning

A basic premise of good strategic management is that firms plan ways to dealwith unfavorable and favorable events before they occur Too many organizationsprepare contingency plans just for unfavorable events; this is a mistake, becauseboth minimizing threats and capitalizing on opportunities can improve a firm’scompetitive position Regardless of how carefully strategies are formulated,implemented, and evaluated, unforeseen events, such as strikes, boycotts, naturaldisasters, arrival of foreign competitors, and government actions, can make astrategy obsolete To minimize the impact of potential threats, organizations shoulddevelop contingency plans as part of their strategy-evaluation process Contingencyplans can be defined as alternative plans that can be put into effect if certain key

events do not occur as expected Only high-priority areas require the insurance ofcontingency plans Strategists cannot and should not try to cover all bases byplanning for all possible contingencies But in any case, contingency plans should

be as simple as possible Some contingency plans commonly established by firmsinclude the following:

 If a major competitor withdraws from particular markets as intelligencereports

 Indicate, what actions should our firm take?

 If our sales objectives are not reached, what actions should our firm take toavoid profit losses?

 If demand for our new product exceeds plans, what actions should our firmtake to meet the higher demand?

 If certain disasters occur—such as loss of computer capabilities; a hostiletakeover attempt; loss of patent protection; or destruction of manufacturing facilitiesbecause of earthquakes, tornadoes or hurricanes—what actions should our firmtake?

 If a new technological advancement makes our new product obsolete soonerthan expected, what actions should our firm take

CHAPTER 2: M1 COMMUNICATION COMPANY – EXTERNAL AND

INTERNAL ASSESSMENT

1 GENERAL INFORMATION OF M1 COMMUNICATION COMPANY

NAMED: M1 COMMUNICATION ONE MEMBER LIMITED LIABILITY

COMPANY

Address: An Khanh, Hoai Duc, Hanoi, Viet Nam

Tel: 069.529150 - 04.62650365; Fax: 04.62650365;

Email: m1company@viettel.com.vn

Certificate of Business Registration No: 0500141369

Capital: 190,000,000,000 VND (One hundred ninety billions Viet Nam dong)

 OWNER INFORMATION

Name of Corporation: Viettel Group

Address: No 1 Giang Van Minh, Kim Ma, Ba Dinh, Hanoi, Vietnam

 MAIN BUSINESS

- Manufacture of communication equipment

- Manufacture of consumer electronics products

- Manufacture of measuring, testing, navigating and control equipments

- Manufacture of structural metal products

- Manufacture of electronic components

- Manufacture of plastic products

- Manufacture of spare parts and accessories for motor vehicles

1.1 History, Milestone, Organization, Culture History & Milestone

 20/11/1945: M1 Communication Factory founded

 2010: M1 Communication Factory is acquired by Viettel Group

 10/2011: Change from M1 Communication Factory to M1Communication One Member Limited Liability Company

- With a long history of 67 years of operating, M1 Communication Company

is the one of few main company produce military equipment for the demand fromthe Ministry of Defense

- Before 2010 year, the main business of M1 Communication Companyspecializes in assembly and producing the military telecommunication equipments

- From 2010 to now, with the desire to bring the company to become themodern electronic production, the Ministry of Defense assigned the M1 company to

a subsidiary of Viettel Group Beside the continuous effort to ensure the task inrepair and producing military telecommunication equipments, M1 have toresearched and produce the telecommunication devices for consumer market

- In early 2012, M1 has complete received and installed the new modernproduction line for electronic devices manufacturing with total investment about

300 billion Vietnam dong from Viettel Group The capability of production linesreached about 3 – 5 millions whole set USB 3G / year or 3 millions mobilehandset / year Moreover, these production lines can adapt with the requirement ofmanufacture for the infrastructure devices which use the complicated and newtechnology for Viettel Group’s demand

- With the total usage area more than 8,000 meter square, the human resourcemore than 400 employees include engineers and staff who are working in long -term

in foreign electronics manufacturing factory before like Canon, Samsung,Panasonics, Foxconn M1 available ensure to meet the market’s requirement instrong and effective

1.2 Vision and Culture

- Led the company to high-tech manufacturing organization, ready toproduce large number of telecommunications devices for domestic and internationalmarket; diversification, differentiation of products to penetrate the appropriatemarket segments, build M1 brand to the Electronics Manufacturing ServicesCompany No 1 in Vietnam

- M1 communication company is a member of Viettel Group which have basicculture is solder’s discipline Enter the business in the electronics production sector,especially produce the telecommunications electronic equipment is characterized byfierce competition and rapidly change technology, M1’s managers and staffs alwaystry to make a difference on all action, on all products and services and especially ininnovation: “Innovation is alive” Another most important point of our company isalways to mention that everything in the company must be made quickly: rapiddeployment of ideas, decisions, strategies and targets This point has created theworking environment consensus, hard, coordinate and learn from colleagues,partners, to the common goal.

 Organization, Main Market & Core Product

Picture 4: M1 Communication Company Organization Chart

 Main Market & Core Products

No Name of product Quantity

per year Main market Potential market

sets

Ministry of Defense

Ministry of PublicSecurity; Ministry ofAgriculture and RuralDevelopment

100-Viettel Group;

Vietnam Posts andTelecommunicationsGroup (VNPT);

Ministry of PublicSecurity

Laos, Cambodia Haiti,Mozambique

5 USB 3G (data card) 100,000

sets Viettel Group

Consumer market:Vietnam, Laos,Cambodia, Haiti,Mozambique, Peru

6

Handset 2G

low-end

300,000sets Viettel Group;

Consumer market:Vietnam, Laos,Cambodia, Haiti,Mozambique, Peru

Table 1: List of Products