Develop business strategy of seyang corporation vietnam

LIST OF TABLES Table 2.2 Competitive Profile Matrix of Seyang Corporation Vietnam Table 2.4 Qualifications of staff in Seyang Corp Vietnam in 2018 39 Table 2.5 Evaluation of managers on

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS HOÀNG ĐÌNH PHI

HÀ NỘI - 2020

DECLARATION

The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article

The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given

The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration

I would like to express my sincere thanks to the Board of Directors, departments and agencies of Ha Nam province for their enthusiastic assistance in the process of collecting data for the implement

Finally, I would like to express my sincere thanks to my family, friends and colleagues who have always created favorable conditions to help, cheer and encourage me during the thesis

TABLE OF CONTENT

DECLARATION i

ACKNOWLEDGMENTS ii

TABLE OF CONTENT iii

LIST OF TABLES v

LIST OF FIGURES vi

INTRODUCTION 1

CHAPTER 1: THEORETICAL BASIS FOR DEVELOPING BUSINESS STRATEGIES OF ENTERPRISES 4

1.1 Overview of business strategy of the enterprise 4

1.1.1 Definition 4

1.1.2 The role of business strategy in the enterprise 5

1.1.3 Business strategy levels and types of strategies 6

1.2 The basic content of the development business strategy 7

1.2.1 Determine the goals of the organization 7

1.2.2 External analysis 9

1.2.3 Internal analysis 14

1.2.4 Formation and strategic selection 16

1.3 Tools and techniques used in developing business strategy of the enterprise 17

1.3.1 IE Matrix 17

1.3.2 SWOT Analysis 18

1.3.3 QSPM Matrix 19

CHAPTER 2: ANALYSIS OF BUSINESS ENVIRONMENT OF SEYANG CORPORATION VIETNAM 21

2.1 Overview of Seyang Corporation Vietnam 21

2.1.1 The process of establishment and development 21

2.1.2 Organizational structure 22

2.1.2 Business performance of Seyang Corporation Vietnam 23

2.2 The business environment analysis of Seyang Corporation Vietnam 24

2.2.1 External factors 24

2.2.2 Internal factors 38

Table 2.7 Internal Factor Evaluation Matrix 47

CHAPTER 3: BUSINESS STRATEGY OF SEYANG CORPORATION VIETNAM VISION TO 20255 49

3.1 Development orientation of Seyang Vietnam Company to 2025 49

3.1.1 Expected situation of export garment market in coming years 49

3.1.2 The orientation of Seyang Corporation Vietnam 50

3.2 Develop business strategy for Seyang Vietnam to 2025 52

3.2.1 Strategies formed from the SWOT matrix 52

3.2.2 Select preferred implementation strategy 55

3.3 Solutions to implement business strategy for Seyang Vietnam until 2025 58

3.3.1 Enhancing marketing activities 58

3.3.2 Finding and expanding markets in new areas 59

3.3.3 Investment to expand production and business, increase profit rate 61

3.4 Some recommendations 63

3.4.1 Recommendations to central ministries 63

3.4.2 The relevant functional units 64

CONCLUSION 65

REFERENCEs 67

APPENDIX

LIST OF TABLES

Table 2.2 Competitive Profile Matrix of Seyang Corporation Vietnam

Table 2.4 Qualifications of staff in Seyang Corp Vietnam in 2018 39

Table 2.5 Evaluation of managers on marketing activities of the

Table 2.6 Financial indicators/ target of Seyang Vietnam from 2015 –

Table 3.3 Roadmap implementation of the business strategy of the

LIST OF FIGURES

Figure 1.1 Factors that form the mission of Seyang Corporaion Vietnam 7

Figure 2.1 Organizational chart of Seyang Corporation Vietnam 23

Figure 2.2 Business performance of Seyang Corporation Vietnam 25

Figure 2.3 The situation of exchange rate fluctuations of Vietnam recently 28

Figure 2.5 Process of performing export product of the company 46

INTRODUCTION

1 The importance of the topic

In the fierce competitive market, if business want to survive, they have to find the right path and develop their own strategy that appropriate to the external and internal factors of the company In particular, strategy is an integral part and is one of the most important basis for developing business strategy

Over the years, Vietnam's textile industry has always been successful in boosting exports to overseas with export turnover growing from 8% to 10% In 2019, the Ministry

of Industry and Trade said that the export turnover of textiles and garments was estimated

at US $ 4.89 billion, increase 19% compared to the same period in 2018 Remarkably, investment capital flows in the textile industry is growing, thus creating more competitive products as well

Seyang Corporation Vietnam is one of the major garment manufacturing companies, having many strengths and always leading the market However, in recent years, the production activities of the company have decreased, the market share has been narrowed significantly due to the participation of a series of domestic and foreign costume and apparel manufacturing companies In addition, there is a deep change in the domestic market and inadequacies in competitive strategy

Vietnam's textile industry has made many progresses in the past years, but there are still hidden risks Facing the challenges of the coming years, in order to maintain the market and the growth rate, each Vietnamese textile and garment business needs to deeply invest to improve working conditions, increase labor productivity, reduce labor costs on a product and reduce staffing while increasing output At the same time, businesses need to focus on caring workers both on working conditions, incomes, and living conditions, cultural and spiritual value to preserve skilled workforce In order to sustain and develop, textile and apparel enterprises must focus on 3 important factors: increasing productivity; investing in automation; choosing high-class orders, technical goods, high processing prices

Facing the situation of competition in the textile market as above, the company must take measures to maintain and improve business on the basis of developing appropriate business strategies for the next step

For these reasons, the author has chosen the topic: "Develop business strategies of

Seyang Corporation Vietnam" to help the company to build long-term business orientation and goals to enhance business results

2 Objectives of the research

The first thing is to systematize the theoretical and practical basis for developing a business strategy of the company

The second thing is to assess the current situation of Seyang Corporation Vietnam’s strategy in recent years

The final thing is to propose some ideas on business strategy development of Seyang Corporation Vietnam

3 Subject of the research

Doing theory and practice research of business strategy development process of enterprises

4 Research scope

Time: Research the situation through Seyang Corporation Vietnam’s documents

has been published over the years, focusing mainly in the years 2016 - 2018 Proposing orientations towards 2025

Space: Research project of developing business activities of Seyang Corporation Vietnam

Content: The thesis examines the components and the content of each step of

developing business strategy Factors affecting business strategy formulation; situation of developing business strategy and propose a number of ideas on business strategy development of Seyang Corporation Vietnam

5 Research Methods

- Data collection method

+ Secondary data: The author collects secondary data from the textbooks, master thesis, articles, related research works as a theoretical basis and collects from income statement, public processes, and financial statements of Seyang Corporation Vietnam

+ Primary data: Primary data is collected through the method of investigating related objects

Subjects of the survey: To research and develop Seyang Corporation Vietnam's business strategy, the author developed a questionnaire for managers of Seyang Vietnam

+ Content of the survey: Assessments of the importance of internal environmental factors, external environmental factors to business operations and the responsiveness of Seyang Vietnam and competitors to these factors

+ Order of the survey: On the basis of the designed questionnaire, the author made

a list of survey subjects and send the questionnaire via: direct and email The sample will

be collected in 10 board of management of Seyang

The questionnaire consists of 3 parts:

The introduction includes the reason for the interview and the information of the interviewee

The content includes questions related to the topic

The conclusion is the author's thanks to the respondents

Choosing method: Specific Identification Method

- Data processing methods:

The data is collected and processed by Excel software

- Information analysis method:

+ Descriptive statistics method: Based on statistical data, the number describe the fluctuations as well as changes in data This method is used to describe the current situation of Seyang Corporation Vietnam's business strategy development

+ Comparative method: This method is used in the process of analyzing and evaluating the actual situation of building business strategy of Seyang Corporation Vietnam over the years From there, draw comments and assessments to create a basis for the methods of analysis and synthesis

Absolute numerical comparison: Through the results between the values of the analysis period compared to the base period, we see the fluctuation in the absolute number of analysis criteria

Relative numerical comparison: From the results of comparison between the adjusted actual number according to a coefficient of the relevant norm in the direction of the scale to identify how many percentage increase or decrease the target

6 Structure of the thesis

In addition to the introduction, conclusion, list of references the thesis consists of

3 chapters:

Chapter 1 Theoretical basis for developing business strategies of enterprises

Chapter 2 Analysis business environment of Seyang Corporation Vietnam

Chapter 3 Business strategy of Seyang Corporation Vietnam vision to 2025

“Strategy” was first used in the military Gradually, this word is used in other areas

of socio-economic life The term "strategy" in Vietnamese is the combination of scrambling and calculating So according to the original, strategy is the plan to fight and, more importantly, to win

In the dictionary of American cultural heritage there is also a definition that reflects the military origin of the “strategy” phrase as follows: “It is the military command art and science, which is applied to make overall planning and conduct large-scale campaigns”

Alfred Chandler of Harvard University defines: “Strategy is determining the term basic goals of a business, and implementing plan along with the allocation of resources needed to get those goals” The thought expressed clearly in Mr Chandler's definition is the rational planning process, the business is described in the form of choosing its goals, defining the action plan (strategy) to achieve those goals, and allocate resources accordingly Similarly, James B Quinn of Dartmouth University defines: “It is the model

long-or plan of an long-organization to colong-ordinate key goals, policies and long-order of operations in an unified whole” In the same way, Wiliam F.Glueck says: “Strategy is unified, comprehensive and coordinated plan, designed to ensure that the basic goals of the business are achieved”

- Therefore, it is possible to define the “strategy” as the identification of basic term goals and the selection of appropriate operational guidelines to achieve those goals

long-An organization's business strategy is the setting of key goals, identifying optimal action programs and allocating the resources appropriately to achieve those goals in the most effective way

The existence of any organization in the world whether governmental or governmental, economic, political, cultural or social, profit or non-profit organization are all associated with an active purpose and its mission To achieve the set goals and missions, these organizations need their strategies

non-Strategy helps enterprises to clearly define the purpose and direction in the future, it

is a guideline for all activities of the business With a long-term operational orientation, it

is a solid basis for the deployment of operational activities Without a strategy or strategy that is not clearly, it will make the business disorient, when problems arise, it can only be solved in the short term, not in the long term

Strategy helps enterprises to adapt to the environment, make appropriate decisions and help maintain and enhance the company's position in the market The strategy also helps enterprises seize, take advantage of business opportunities and actively deal with risks

Strategy helps enterprises to use the most appropriate resources, contribute to improving the efficiency of using the resources, enhance the position of businesses

Strategy helps enterprises to choose suitable competitive advantages in an changing business environment, find ways to survive and grow to enhance their competitive position

ever-Strategy is a solid basis for enterprises to invest in research and development activities, training and retraining personnel, product development, and market expansion

1.1.2 The role of business strategy in the enterprise

The role of business strategy in the enterprises is shown in the below aspects: Business strategy is a guideline that helps enterprises to clarify their purpose in the future

Business strategy plays an orientation role of enterprises in the long term, it is a solid basis for the deployment of operational activities The unclear strategy will make the operation of the business disoriented, there are many problems that arise only in the short term but cannot be attached to the long term

Business strategies help enterprises to seize and take advantage of business opportunities; have proactive measures to deal with risks and threats in the market

Business strategy contributes to improving the efficiency of using resources, strengthening the position and ensuring the enterprise will have continuous and sustainable development

Business strategy creates solid bases for enterprises to make decisions in accordance with market fluctuations It is the basis for research and development activities, investment and development of training and retraining personnel, market expansion and product development In fact, most of the mistakes in investment, technology, market, etc are caused by the deviation in determining the strategic goals

Business strategy increases sales, labor productivity and business efficiency, avoids financial risks, increases prevention and prevents risks that the company will encounter in the business

For textile industry, business strategies also play an important role in product activities The garment industry is a highly competitive industry, especially affected by the seasonal and tastes of customers In particular, this industry is heavily dependent on exports, fashion trends, however, original conditions are increasingly stringent and requirements for input materials are increasing Therefore, the business strategy of businesses needs to be clear and detailed

Without a business strategy, garment enterprises will find it difficult to adapt to changes in the market, from which business activities will be inefficient, reduce sales, narrow market share

1.1.3 Business strategy levels and types of strategies

Business strategy levels

Corporate Level (The general strategies and towards the coordination of business

strategies): Based on the goals and objectives to identify the business areas that company should participate or will participate in; determine the ways which company will conduct and the role of each department in each step; determines resources (skills, assets, finance, relationships, technical capabilities, equipment) are required to be able to compete Coporate level strategy aims to: improve the results of separate business activities, aim at diversifying operations, creating synergies between business activities and identifying priority areas of investment and segmenting resources of the company appropriately

In garment enterprises, the corporate level is the overall strategy of business activities, identifying the right orientations for optimizing the use of enterprise resources Garment enterprises often have only one type of product with different product lines However, the products are diverse and plentiful, influenced by fashion styles, consumer trends,

Business Level is strategy that is specifically applied to each sector of the

enterprise These are specific strategies associated with each business or product line and tied to a defined market This strategy aims to orient the development of each industry or product category that contributes to the completion of the business level strategy The advantages and competitors of each industry are not the same, so enterprises have to come

up with a strategy consistent with the business level strategy Companies operating in many fields will have many different strategies Different unit-level business strategies

within the same enterprise need to be developed or adapted to be mutually supportive

In the garment industry, a functional business level is a specific strategy associated with each different product line Typically, the apparel product lines are segmented by customer income: fashion for high-income customers, popular fashion, cheap fashion, or segmented by using purpose: fashion, office, stree stylet, party,

Functional Level: All businesses have functional departments such as research and

development, production, human resources, finance, marketing, etc These functional departments need strategies to support the implementation of unit level, corporate level and company level strategy Functional level strategies are valuable at each stage of the business and company implementation

1.2 The basic content of the development business strategy

1.2.1 Determine the goals of the organization

The first component of the strategy development is the identification of mission and goal The company's mission and strategic goals are factors making a project from general

to specific

The mission outlines why the enterprises exist and what they need to do For example, the mission of a national airline might be - satisfy the requirement of high-tech transportation with reasonable prices for individuals and organizations in all the major areas By looking at the nature of the mission, it can be seen that the enterprise’s mission is formed: (i) business sector of the enterprise; (ii) corporate philosophy; (iii) aspirations of senior management

Figure 1.1 - Factors that form the mission of Seyang Corporaion Vietnam

( Source: Hoang Van Hai (Editor), (2010), Strategic Management, page19 )

Industry that company operate in

Desires of leaders

The company's business

Strategic goals specify what businesses hope to achieve in the long-term and medium-term Most profit organizations set a hierarchy of goals to maximize shareholder benefits

Setting strategic goals makes the mission and orientation become the results that need to be achieved Goals are envisioned as a commitment of the administrator to reach

specific results in a given time They explain what kind of achievement, how much and when They focus attention and energy on what needs to be done

The long-term goals and strategy need to be identified as an important target and the management should have the best plan to achieve the best results The experience of countless businesses and executives shows that the businesses having managers set goals with specific levels and then promote activities to achieve these goals are always be more successful than businesses just have good ideas without taking action

In order to make goals become an administrative tool, it must be indicated by specific numbers and there must be a deadline for completion This can avoid the general way of saying slogans such as "maximizing profits", "reducing costs", "becoming more efficient" or "increasing sales volume"; All of these phrases do not specify the number and timing of the task, so setting a goal is a practical way to make pressure: when the goal will

be achieved , what specific results are achieved and who is responsible for the implementation Bill Hewlett, the co-founder of Hewlett-Packard, once remarked, you can't manage what you can't measure Only when concretizing the goals set out by the data, you have chance to succeed

Instead of have disorientation action, the data requirement in the specific targets and make the director account for the deadline to achieve the goal will help create strategic decisions; it also will itself be a standard framework for assessing corporate performance

Goals affect the business activity and it is also a source of stimulation For example, increasing the market share by 20% requires the various actions needed to improve production efficiency and achieving 1 billion in revenue next year can be a challenge for businesses Finally, goals are used as a tool of evaluation and control It allows to check if the result is consistent with the requirements or not (for example: whether the delivery can be shortened within 1 week) to take appropriate actions (such as improving production and warehousing to reduce order and delivery times), reinforce accountability Enterprises can have long-term, medium-term or short-term goals Economists assume that enterprises set their goals in eight key areas

1/ Market position

In an enterprise, a fixed goal for a specific job can be a binding to other jobs For example, maximizing sales product is bound by production capacity, delivery time, quantity of products, production costs These factors are targets that can be assigned to production themselves However, the implementation of one goal may conflict with the others so the business needs careful calculations before taking action

Setting goals is not a simple thing In order to have an appropriate target for the enterprise, one of the following factors must be satisfied:

o The goal must be clear An ambiguous goal will have an adverse effect on the collective activities For example, the goal of becoming a leader in the commercial market will lead to many different explanations for the operation of a company

o The goal must have its own characteristics, a generic formation of goals such as

a 5% increase in market share will not mobilize maximum resources

o The goal requires realism (feasibility) will rise the interest of all members of the organization Define goals for each stage based on the mission and the impact of other objective factors at the same time

1.2.2 External analysis

1.2.2.1 Macroenvironment analysis

An enterprise that wants to conduct strategic analysis needs to know its strengths and understand important external factors to use appropriate analytical methods In particular, when enterprise wants to have a comprehensive view of the business area, they often choose PEST analysis according to four factors: Politics (P), Economics (E), Socialization (S), and Technology Environment (T)

While Michael Porter's Five Forces model used to explore the environment in which a product or company (or business unit) operates, the PEST model shows the effects

of factors in the macro environment: (1) Political Factors; (2) Economics Factors; (3) Social Factors; (4) Technological Factors

Figure 1.2: PEST analysis

Source: Yourfreetemplates.com (November, 2018)

These four factors are external factors of the business and have a direct effect on economic sectors Enterprises based on the impacts that these factors on industry to make the most appropriate activitie

Political Factors

This is a factor that affects all businesses in areas; institutional and legal factors that can affect the viability and development of any industry When doing business on an administrative location, businesses will be required to comply with the institutional and legal factors in that area

This factor often analyses the following aspects: Stability; Tax; Relevant laws; Policy

Economics Factors

Enterprises need to pay attention to economic factors both in the short term, long term and the government's intervention

Generally, enterprises will base on the analysis of the following economic factors

to make decision on investing: The economic situation; Factors affecting the economy; Economic policies of the Government; Future economic prospects

Social Factors

Each country has their own unique cultural values and social factors, and these

factors refer the customer characteristics

Cultural values build up a society and make it existence and development Therefore, the common cultural factors are well protected, especially the spiritual culture

This factor includes: average life expectancy, health, diet; average income, income distribution; lifestyle, education, aesthetics, psychology; living condition

Technological Factors

In the revolution of technology, a series of new technologies are invented and integrated into products and services Especially, in the field of information technology, modern communication technology has helped to link geographical distances and modes of transmission

1.2.2.2 Microenvironment analysis

Michael Porter is a leader in strategy and competition; he provided a theoretical framework for analyzing competitiveness for businesses The five competitive pressures model were thought to be an achievement of mankind

Porter’s Five Forces Model was first published and reviewed in Harvard Business Magazine in 1979 with the aim to find the profit-making element in business This model

is considered a useful and effective tool to find out the source of profits Most importantly, this model provides competitive strategies for businesses to maintain or increase profits

The purpose of Porter's Five Forces Model is to analyze whether enterprises should enter or operate in a certain market However, today's business environment is "active", this model can also be used as search tool to show what a certain industry need to be improved to produce more profits

Figure 1.3: Porter’s Five Forces Model

Source: Michael Porter (1980, page 61-78)

Porter’s Five Forces Model can be summarized as follows:

Threat of New Entry

They are companies that are not currently competing in the industry but are likely

to enter the market The higher the entry fee of new companies is, the higher the barriers to entry are

+ Trademark Loyalty is buyers' preference for products of existing companies This reduces the threat of potential competitors because the task of dispelling well-established customer preferences is extremely difficult

+ Absolute cost advantage: Existing companies may have absolute cost advantages over entrants If current companies have absolute cost advantage, the threat from the entrants is reduced

+ Economy scale is the improvement of the marginal efficiency due to the enterprise accumulating experience If the cost is significant, the entrance must be in a position to either enter the small scale and lose the cost advantage, or take risks to enter a large scale and large capital costs

+ Conversion costs are the one-time cost when customers want to convert their purchases to other suppliers Switching fees can relate to the cost of purchasing additional equipment, staff training costs, and even mental costs when a relationship is terminated

+ Barriers are factors that make more difficult and expensive to enter a sector

Competitive Rivalry

Generally, the level of competition between companies in the industry is a total of three main factors: (1) competitive structure; (2) demand conditions; (3) barriers to leaving the industry

+ Competitive structure refers to the distribution of the number and size of companies Many dispersed industries have low entry barriers and small difference in primary products These two characteristics create a trend of cyclical gains Whenever demand is high and profits are high, low entry barriers will enable an influx of people

to enter, whenever demand is high and profits are high

+ Demand conditions have the meaning competition level in existing companies The growth in demanding of new customers or purchasing of existing ones tends to ease competition because it opens up a larger space for growth Demand growth tends to reduce competition, all companies can sell more without having to win the market of other companies, and the profits will be increased contemporaneously

+ Barriers to leave the industry are the emotional, strategic and economic factors that can keep a company in the industry even having low income

Buyer Power

The third factor of the Porter's five forces is the power of the buyer Buyers may be end-users of products or companies that deliver products to end-users, such as retailer, wholesaler

As the supply industry is made up of many small companies and there is a few buyers; this make the buyer overwhelm the supply companies

In case buyers make bulk purchases, they may use the purchasing power as bargaining leverage to reduce the price

Supplier Power

The fourth factor in Porter's five force model is the power of suppliers Suppliers can be seen as a threat when they can increase price or reduce the quality of product that they provide, thereby reducing the profitability of the company On the contrary, if the supplier is not reputative enough will make the company have an opportunity to push down prices and require high quality

Threat of Substitution

The last force in Porter's model is the threat of substitution Alternatives are those

of industries that serve the same customer as the one being analyzed

- Physical assets (land, machinery, buildings - both in quality and quantity) and technological assets (copyrights and patents) Technology and equipment are one of the important factors in the production process Production is a key activity of enterprises and

it is associated with creating products and services for business Evaluation of this work focuses on factors such as the application of new technical and technological qualifications; operation scale (expand or narrow); organizational structure (the arrangement of workshops, machinery equipment, storage systems, number of warehouses ); cost (goods purchase, transportation, loading, unloading, delivery and warehousing ), these factors have a great influence on the production activities and create competitive advantages compared to other competitors

- Human resources (skills and loyalty of employees): Human resource management

is very important to the success of business To achieve the strategic goals, enterprises must prepare a team of people who work effectively, responsibly and with high productivity A business strategy is perfect and effective when enterprises have productive people…

Human resource evaluation will help businesses identify strengths and weaknesses

of the members in each department for job requirements Factors for evaluating human resource management include recruitment, training, development orientation, interest, evaluation, selection, rotation, appointment, and remuneration, reward, discipline

Encouraging all the members of the company is an important thing to do in businesses, creating value in accomplishing the strategic goals set out If there is timely encouragement, employees will feel that they are interested in, enthusiastic and responsible for businesses and help businesses create more products with high productivity, quality and

great profit in the context of a changing business environment In order to get effective encouragement, enterprises must have a strict and clear reward, punishment system

- Trademark (reputation, brand, financial reputation, strategic reputation) This is an important factor affecting business operations of the business A reputable brand enterprise will be able to compete well in the market At the same time, products, services and goods

of that business are also easier to be accepted by consumers Businesses can easily deploy business activities, launch new products

- Marketing can be described as a process of identifying, forecasting, setting and satisfying consumers' desires for an enterprise's product or service To analyze the marketing activities of enterprises, we need to focus on issues such as customer analysis, buying and selling activities, product and service planning, pricing, distribution, market research, opportunity analysis and social responsibility

- Corporate culture is the highest goal, value standards, basic concepts, standards of behavior that all employees of the enterprise follow Formed in the course of business and production for a long time, the content of the corporate culture includes: analyzing the current state of the corporate culture (analyzing the structure, assessing the enterprise culture level, directions and impact level, advantages and disadvantages of enterprise culture), analyzing internal factors and objective environment of enterprise culture, analyzing the interaction between business leaders and enterprise culture, analyzing the characteristics and value trends of the corporate culture

The function of the finance department includes planning analysis and checking the implementation of financial plans and financial situation of enterprises The financial department has a profound influence on the entire business

- Management capacity:

The criteria for evaluating an organization's validity include: effectiveness; unification in command; rationality of decentralization and management margin; appropriateness between positions; coordination between departments in the organization

Analysis of the organization's current situation: analysis the organization's tasks; analyze the organization's current status; identify problems that exist in the organization of the enterprise and find the causes

The value of a business is measured by the amount that buyers are willing to pay for a product or service Enterprises have profit if the created valu e is greater than the cost To gain a competitive advantage, the functional parts of the enterprise must either create a value with lower cost than competitors, or have to make their products

Manufacturing

External logistics (Export)

Sale, Marketing

sales service

After-(Source: M Porter, Competitive advatages, 2010, page 76)

"Every company is a collection of activities to design, manufacture, sell, deliver and support products," Michel Porter said Every activity increases the value of the product The "value chain" is divided into main activities and supportive activities The main activities are: internal logistics, production, external logistics, marketing and sales, after-sales service Supportive activities are: material management, research and development, human resource management and infrastructure of enterprises The division

of activities in the Value Chain facilitates to check costs and results of implementation in each activity, find ways to improve each activity as well as the coordination between them, corresponding to the strategy to create the value of each specific product as well as the whole enterprise At the same time, analyzing competitors to estimate their costs and results to have a basis comparison with their businesses, seek to create superior value than competitors

1.2.4 Formation and strategic selection

According to Fred R Davis (2003, p 91), to formulate and select a feasible strategy for businesses, we can summarize the 3-stage decision-making process as follows:

Stage 1: Summarizes the basic information that needed for the formulation of the strategy During this stage, the tools used were Analyzing External Business Environment (PEST), analyzing the industry's competitive environment (Michael Porter's five forces model); internal factors matrix (IFE), external factors matrix (EFE)

Stage 2: One of the tools used in this stage is the SWOT matrix, with information

drawn from stage 1, aligning the strengths and weaknesses within the business with opportunities together with challenges from the outside environment to form a viable strategic option

Stage 3: Use the assessment and strategic selection matrix (QSPM) to select the strategy The QSPM matrix uses information from stage 1 to objectively evaluate the feasible strategies that can be selected in stage 2 This matrix represents the attractiveness

in the relative strategies, thus providing an objective basis for selecting specific strategies

1.3 Tools and techniques used in developing business strategy of the enterprise 1.3.1 IE Matrix

(i) External Factor Evaluation (EFE)

The External Factor Evaluation (EFE) helps us to summarize and quantify the

impacts of environmental factors on businesses The EFE matrix is developed in 5 steps:

Step 1: Catalog the key opportunity and risk that greatly affect the success of the company in industry

Step 2: Assign importance by classifying from 0.0 (unimportant) to 1.0 (most important) for each factor It should be noted, the importance of assigned factors indicates the relative importance of that factor to the success of the enterprises The most importance

of the listed factors is equal to 1

Step 3: Classify from 1 to 4 for each representative factor (in fact, a wider range

of points can be assigned) Given the biggest weak point by 1, the smallest weak point

by 2, the smallest strong point by 3 and the biggest strong point by 4 This is the level

of business response to opportunities and threats from the environment

Step 4: Calculate points for each factor by multiplying its importance by the corresponding classification score

Step 5: Calculate the total score for all factors given in the matrix by adding up the scores of the corresponding component elements of each enterprise

Accordingly, if the total score of the entire list of factors included in the EFE matrix is 4, the enterprise responds well to opportunities and threats from the environment If 2.50 and above, businesses have above-average response Conversely,

if the total score in the EFE matrix is less than 2.50, the response of the business is

lower than the average

(ii) Internal Factor Evaluation (IFE)

Internal factors are considered the most important in each business strategy and goals that the business has set After considering internal factors, strategic managers need

to do with the elements to consider the ability to react and recognize the strengths and weaknesses This helps enterprises make the most of their strengths to exploit and prepare internal resources to deal with weaknesses and find out ways to improve these weaknesses

According to Fred R David (2003, p 248-249), to form an IEF matrix requires 5 steps:

Step 1: Catalog from 10 to 20 elements, including the strengths and weaknesses that affect the business, to the goals that the business has set

Step 2: Sort the importance from 0.0 (unimportant) to 1.0 (very important) for each factor The importance of these factors depends on the impact level of these factors on the success of the business in the industry The total of all factors must be equal to 1.0

Step 3: Determine each factor according to the score from 1 to 4, where 4 is very strong, 3 points is quite strong, 2 points are quite weak, 1 point is very weak

Step 4: Multiply the importance of each factor by its corresponding number to determine the score of the factors

Step 5: Total the points of all the factors to determine the total number of matrix Assessment: The total number of points in the matrix is in the range from 1 to 4, regardless of the number of important factors in the matrix

1.3.2 SWOT Analysis

Research the inside and outside environment of the business is an important part of the strategy development process Internal factors of a business are often considered to be strengths (S) or weaknesses (W) and external factors are considered opportunities (O) or risk (T) Therefore, the method of general analysis on strategic environment is considered

as SWOT analysis

The SWOT analysis provides useful information for connecting a company's resources and capabilities to the competitive environment This is a tool in formulating and selecting strategies The following analysis shows us how SWOT analysis relates to environmental research inside and outside the enterprise

SWOT (also called SWOT matrix) is a method of analyzing Strengths, Weaknesses, Opportunities and Threats

Strengths and Weaknesses mean internal factors that create (or reduce) value These factors may be the company's assets, skills, or resources compared to competitors Opportunities and Risks are external factors that create (or diminish) the value of a company that is beyond its control Opportunities and Risks arise from a competitive business environment, geographic, economic, political, technological, social, legal or

cultural

SWOT provides a tool for strategic analysis, review, evaluate the position and orientation of a company or a business project SWOT is suitable for team work and analysis, used in business planning, strategy formulation, competitor evaluation, marketing, product and service development, etc

SWOT can be used for evaluation: a company (market position, marketability, etc); sales method; product or brand; business ideas (product ideas or commercial ideas); strategic options (market penetration, or launching a new product); partnership; investment opportunities; etc

SWOT analysis is the evaluation data in a logical order to understand, present, discuss, and make applicable The four-dimensional assessment of SWOT is an extension

of the two dimensions "strengths" and "weaknesses" SWOT analysis can be used for all types of decision making, and its framework allows enterprise to positive thinking, beyond the framework of habit or instinct

1.3.3 QSPM Matrix

The QSPM matrix uses the input data from previous analysis to help the strategy builder objectively selecion which strategies are the most attractive and worthy to pursue a successful goal The process of developing a QSPM matrix consists of 6 steps

Step 1: List external opportunities / challenges and important internal strengths /

weaknesses in column (1) of the matrix These elements are taken from the EFE and IFE analysis

Step 2: In column (2) of the matrix mark the corresponding numbers to each

element in the classification column of the EFE and IFE analysis

Step 3: Review the SWOT matrix and identify replaceable strategies that the

organization should consider to implement, recording these strategies in the top row of the QSPM matrix The strategies are organized into separate groups (if any)

Step 4: Determine the attractive score (column A): Unattractive = 1, less attractive

= 2, quite attractive = 3, very attractive = 4 These numbers represent the relative attractiveness of each strategy compared to others

Step 5: Calculate the total attractive score of each strategy corresponding to each

key success factor recorded in column (1) by multiplying the classification number by the number of interest points in each row (put in column B)

Step 6: Cumulative points of interest will have the total number of attractive points

for each strategy (considering all relevant internal and external factors that may influence

strategic decisions) The higher the total score, the more appropriate the strategy and deserve to be selected for implementation

CHAPTER 2: ANALYSIS OF BUSINESS ENVIRONMENT OF SEYANG

CORPORATION VIETNAM 2.1 Overview of Seyang Corporation Vietnam

2.1.1 The process of establishment and development

Name: Seyang Corporation Vietnam

Address: Lot 54, Handicraft Village, Nhat Tan Commune, Kim Bang District, Ha

Nam Province

Representative: PARK CHAN JOON

Seyang Corporation Vietnam is a 100% Korean-owned enterprise established on January

25, 2013, investment license No 061043000033 issued by Ha Nam People’s Committee with the main activity is produce costumes Total investment capital is US $ 2,000,000 and total space

Currently, the total number of employees is 510, of which 46 people are in the professional division

The company's consumption market is increasingly expand, the company's products are available in the US, Japan, Canada, and South Korea produced for famous brands such as GAP, Nike, ADIDAS, DISNEY, LOTTO The company exported mainly clothing products to foreign market

Seyang Corporation receives a contract for sewing / processing products according

to the requirement of customer The products are manufactured exactly the design and contract regulations, the final acceptance test before packaging and shipping to partners At present, the company is responsible for purchasing raw materials, sewing and delivering according to the contract

Seyang Corporation is a manufacturing company specializing in apparel, committing to doing production force and type in the business registration, paying special

attention to produce garments and trade the products that the company produces

2.1.2 Organizational structure

The organizational structure of the company is implemented as following model:

Figure 2.1: Organizational structure of Seyang Corporation Vietnam

(Source: Administrative offices, Seyang Corporation Vietnma)

President: Supervising the company's production, business activities and economic

management

Chief Executive Officer: Assisting the President to manage and operate the

departments, day-to-day operations of the company and to perform the assigned tasks and duties

Human resouces department: In charge of materials, health, protection, human

resource management, salaries, emulation and commendation policies for employees Building an organizational model, standards, functions of managers, professional staff, production workers and labor rules and other duties assigned by the Director

Accounting department: This department has to build financial regulations and

asset management, collect and monitor debt, balance finance to help company

Factory III

implement business plans, financial statements that in accordance with state regulations etc

Import and export planning department: Developing market plans, searching for

new consumer markets, performing work related to import and export goods/ products, receiving orders and providing product information for customers, preparing ordering procedures Moreover, checking progress of orders at the company and partners is one of the most important tasks Making deliveries to partners and finalizing orders Handling arise trouble with customers after orders and directly in charge of the company's warehouse etc and other duties assigned by the Director

Technical Department: Researching and guiding the implementation of

technological processes in each workshop, doing research and application of advanced science; In charge of the company's sewing segment before deploying production to improve labor productivity and production activities and other duties assigned by the Director

Production management: Receive samples of garments from the technical

department and transfer them to the relevant workshops (the sewing workshop is responsible for sewing the products, designs, dimensions following the information of the technical department; the textile workshop will take charge the service of weaving into pieces) Directly in charge of the workshops of the company: textile, garment, electronics etc and other duties assigned by the Director

2.1.2 Business performance of Seyang Corporation Vietnam

In recent years, the domestic and the world economy have grown significantly; the garment market has positive signals Consequently, the revenue and profit of Seyang Coporation Vietnam has grown over the years Among textile exporting countries, Vietnam became the country with the largest export growth, not only high growth in speed, textile exports also grow strongly in key markets such as US, South Korea, EU, Japan In particular, the highest growth of textile and apparel exports is the US market (reached 10 billion USD since 2014) Korean market is in second position Compare to the Japanese market, Vietnam is the second largest exporter of textiles and garment Among the top 5 countries exporting textiles and garments to Japan, Vietnam is the country with the highest growth rate Vietnam has surpassed Bangladesh to become the third largest exporter of textiles and clothing

Unit: Million VND

Figure 2.2: Business performance of Seyang Corporation Vietnam

(Source: Financial statements of Seyang Corporation Vietnam)

In 2015, the Company's revenue reached VND 60,057.2 millions, increased VND 10,078.2 millions in profit In 2016, revenue increased by 63.52%, reaching VND 987,778.1 millions, profit was also doubled, reaching 27,005.5 millions

By 2017, Vietnam's apparel export market increased significantly, the Company's revenue continued to increase to VND 1,735,239.4 millions, (increase 75.67%) and the profit also increased VND 60,918.2 millions

In 2018, although the growth rate has decreased, the Company's revenue still achieved a positive level with VND 1,921,345.7 millions, profit increased to VND 70,324.9 millions

2.2 The business environment analysis of Seyang Corporation Vietnam

2.2.1 External factors

2.2.1.1 Macroenvironment factors

(i) Legal and political

Organizations are cells of the economy Every decision of the organization is strongly influenced by the elements of the political and legal

- Politics: Along with improving investment and cutting administrative procedures

in recent years, Vietnam is one of the most attractive economies in Asia - Pacific region besides the United States, Indonesia and China The political stability has helped Vietnam gain many achievements and become one of the interesting markets for Asian investors

In country relationship, besides the positive factors, there still exists some disagreements; disputes in the East Sea area continue to be complicated, involving many countries and sovereignty of national territory, which still contain hidden threats The resistance of hostile forces still exists Therefore, besides the task of economic development, we still need to continue training a regular and modern army force to meet the requirements of protecting the country

The US-China trade war brought opportunities to transfer orders from China to Vietnam: Vietnamese textiles and garments ranked second in the import market share in the US, just behind China Therefore, Vietnam's textile and apparel industry is expected to benefit from this movement when Chinese textile and apparel are taxable to 25%

Many opportunities from free trade agreements (FTAs): partners from CPTPP contribute to the total 25% value in textile and garment export and import of Vietnam Therefore, the official implementation of CPTPP is expected to support export growth In addition, the RCEP agreement, currently in negotiation expected to bring many advantages to Vietnam not only in exporting but also in importing raw materials

However, Vietnam's textile and garment industry mainly depends on imported raw materials (accounting for 38% of textile and garment import and export value) The garment industry has the largest raw materials import percentage (accounting for nearly 60% of import value) Vietnam's garment manufacturing industry participates in the global apparel value chain mainly at processing (CMT), accounting for 65% market share Meanwhile, the CPTPP requires strict rules of origin

- The law: In order for the market economy to operate effectively, it is necessary to have laws system and government policies to regulate the market Today, political and legal factors are increasingly affecting the production and business activities of enterprises

Currently, Vietnam's textile and apparel industry is managed by the following agencies:

 Ministry of Industry & Trade: www.moit.gov.vn and Ministry of Planning & Investment: www.mpi.gov.vn

 Vietnam Textile and Apparel Association (VITAS), Vietnam Cotton and Spinning Association (VCOSA)

 The Vietnam National Textile and Garment Group (VINATEX)

All Associations participating in the management of Vietnam's textile and apparel industry are controlling effectively

In recent years, government has issued many guidelines and policies to develop the textile industry:

Decree No 111/2015 / ND-CP of the Government: Regarding the development of supporting industries: Textile and garment is one of six fields in Vietnam's list of supporting development priority industries Specifically, the Government will support 50%

of the funding for research and development activities and 50 -75% for the application and production technology transfer activities In addition, textile and garment auxiliary enterprises are also entitled to incentives on corporate income tax, exemption of import tax

to create fixed assets, preferential loans and reduction of land rent etc

Decision 3218 / QD-BTC: On the planning for development of Vietnam's textile and garment industry till 2020, with a vision to 2030

Decision No 55/2001 / QD-TTg of the Government stipulating the capital support for small and medium-sized enterprises in the textile industry: However, the effectiveness

of this decision is not high due to capital are relatively small, mainly from domestic banks Regarding bank capital, the current interest rate is 6%, if enterprises borrow long term, it can be up to 8% or even 10% Thus, the capital policy for textile enterprises has not supported businesses to access cheap loans

In the latest report on “Business environment 2017: Equal opportunity for all” conducted by the World Bank, Vietnam ranked 82 out of 190 economies on the level of improvement (VNEconomy)

Economic growth in recent years tended to be relatively stable and regained

momentum after the recession Over 20 years of development, Vietnam's economic growth rate has been continuously maintained at a high level, the average GDP growth rate during the period of 2011-2017 is 5.98% / year High economic growth with population growth is curbed has led to an increase in GDP per capita per year Vietnam's GDP in Q4 / 2017 increased by 7.65% compared to the same period in 2106 For the whole year 2017, GDP achieved an impressive growth rate of 6.81% compared to 2016 - the highest level since

2008 Overall, the GDP of the whole year 2018 increased by 7.08%, is the highest increase since 2008

Table 2.1: National GDP growth rate from 2013 to 2017

National GDP growth rate (%) 6.68 6.21 6.81 7.08

(Source: General Statistics Office)

Vietnam has been taken advantage of all resources to invest in economic development In addition to domestic investment with the participation of all economic sectors, foreign investment in Vietnam will recover and continue to develop leading to promote the market of goods and raw materials for garment industry From that, demand for products in apparel continues to grow Vietnam is becoming a reliable investment country

In 2017, inflation decreased to 4.93% The percentage of inflation in 2017 increased by 1.41% compared to the average in 2016 This is a fairly low increase, confirming the stability of the economy

Inflation is controlled at a moderate level which can stimulate investment, economic growth and ensure the relative stability of the company's input raw materials

From the beginning of 2017, monetary policy in general and interest rate management of the State Bank in particular, have had a great impact on the market Specific and synchronous solutions in operating monetary policy, interest rates have gradually decreased and directly helped businesses reduce capital costs in production and business In 2017 and earlier, the survey results of associations, industries showed that interest rate accounts for a large proportion of the cost of goods and service In contrast, interest expense nowadays has decreased by more than 50% compared to the previous two years Even in some enterprises, interest expense has decreased by up to 70% due to having a good sales plan

Figure 2.3: The situation of exchange rate fluctuations of Vietnam recently

Textile industry has to import up to 80% of raw materials from abroad so the fluctuation of exchange rate will greatly affect the business situation of the company It can

be seen that 2018 is the year that have the exchange rate fluctuated greatly During the year, the rate announced by the State Bank increased by 1.6%, the exchange rate on the interbank market increased by 2.7% compared to the beginning of the year Over the past 7 years, only 2015 witnessed a more volatile exchange rate increase of 5.1% The VND decreased by 2.7% against the USD, showing that the VND is much more stable than other currencies in the region The positive changes in Vietnam's macroeconomic picture have partly eliminated negative effects from the world and created favorable conditions for the State Bank's exchange rate management activities Although the exchange rate in 2018 had

a relatively increase compared to previous years, it can be said that 2018 is still a successful year in the exchange rate management activities of the State Bank The State Bank of Vietnam has regulated the exchange rate quite smoothly through two main modes: the exchange rate mechanism and flexible foreign currency trading In general, the State Bank's exchange rate adjustment policies have clearly shown the activeness and flexibility

in response to changes in the domestic and international foreign exchange market

=> Oppotunities

The economic situation is positive, having a positive impact on the all activities of the company: good GDP growth, moderate inflation, slight and stable bank interest rates while the exchange rate is approved by the State Bank

(iii) Cultural - social - natural - population

Vietnam is located in the center of North-South and East-West cultural and economic exchange, and has a particularly important strategic position in South East Asia, with a long coastline and enormous marine economic potential Vietnam's natural factors

are considered to be quite favorable for sustainable economic development in the 21st century Natural conditions and geographical location are suitable for the development of industry, agriculture and services Especially, with an appropriate geographical position, Vietnam has the advantage of trading with other countries

Vietnamese society is combination between modernity national The learning with the world is increasingly expanding The strong development of technology, especially in the field of information technology, promotes Vietnamese society to increasingly integrate with the international community

The large population with the improvement of people's living standards and the intellectual level With such a large population, this will be a rich source of labor for the textile industry Moreover, the number of trained workers who access to science and technology is increasing

The textile industry is rather depends on the ingenuity of workers than depends on machinery and equipment.Vietnam can produce a wide range of products from shirts, coats, pants and sportswear to underwear, t-shirts, skirts, suits as labor is considered to

be skillful This is a great advantage in developing the textile industry

The trend of scientific and technological application has developed strongly, especially the application of automation technology in production, research, design, production management and consumption

Industry 4.0 offers both opportunities and challenges; however, Vietnam will face more challenges than opportunities

=> Opotunities: Vietnam is a latecomer country so we can use the modernist

technologies If we take advantage of this opportunity and skip some other development stages, we can save time compared to other countries We can change the management and

economic development model Vietnam will be able to make a breakthrough

=> Challenges: There are many challenges such as technology, human resources,

policies and infrastructure Specifically, Vietnam's technology level is moderate and uneven, so it will be difficult to access to industry 4.0

The textile industry is a highly fashionable industry with many production steps Industry 4.0 is unlikely to simultaneously replace human labor in a short time, especially the sewing stage However, it still increases the risk of job loss for garment workers, especially low-skilled workers and those that are easily replaced by machines The level of impact at each stage of production is also different Therefore, Vietnamese garment enterprises need to identify jobs in the production line which apply technical advances, improve labor productivity, and use labor resources at the same time

(v) The international environment

Over the years, the EU has escaped from recession and experienced growth, Japan and South Korea maintained their growth rates, this is an opportunity for Vietnam to have more channce to exports

According to The Office of Textiles and Apparel (OTEXA), Vietnam is the second largest textile and garment exporter in the US with a market share 13.2% of total US import value (China account for 36% market share) From 2014 to 2018, China's export market share in the US market showed the decreasing, while Vietnam's textile and apparel market share increased from 9% to 13% Moreover, Vietnam also maintains a high and stable growth in export value to this market Therefore, the US-China trade war is expected

to create good opportunities for other markets such as Vietnam, Bangladesh and Mexico to continue increasing market share in the US thanks to the movement from China to Vietnam However, Vietnam and Bangladesh are expected to have great advantages thanks

to cheap labor cost and strong production capacity In addition, the problem of Bangladesh

is in technology because the orders of Bangladesh are mostly large and have simple technical requirements At the same time, low labor conditions in Bangladesh are also factors for importers to consider

On January 14, 2019, the CPTPP Agreement officially came into effect in Vietnam, opening up many opportunities for textile exports, especially when the market share of the countries in the Agreement accounts for ~ 16% of the total export value In particular, Japan and Canada are the two biggest customer on Vietnam's textile and apparel import The major textile markets are located in countries such as Japan, Canada, Australia, New Zealand, and Singapore, as these countries import a lot of textile and apparel products,

mainly from China This opportunity will come to Vietnam when the CPTPP agreement comes into effect Especially, 3 big markets of Canada, Mexico and Australia - 3 members

of CPTPP that Vietnam still not had a free trade agreement (FTA) The value of these three markets is about 10-13 billions USD, and Vietnam's market share in total imports is 300 millions to 500 millions USD These agreements also open up investment opportunities for countries in Vietnam such as auxiliary materials, weaving, dyeing and yarn Recently, investors from South Korea participated in the textile industry the most thanks to the FTA European, American, Taiwanese and Hong Kong are also interested and consider invest in textile industry of Vietnam Many textile projects of foreign investors have been started in places such as: Da Lat wool spinning factory with a scale of about 20,000 m2, a joint venture between Südwolle Group – Germany; a joint stock company Lien Phuong Textile and Garment; Dyeing factory in Nhon Trach Industrial Zone (Dong Nai) of the US

(i) Supplier Power

The company is currently borrowing capital from the Joint Stock Commercial Bank for Investment and Development of Vietnam - Ha Nam branch The pressure on capital is not too heavy because the loan only accounts for 30% of the total business capital The Company's reputation is quite good and the Government has many support activities

Regarding the equipments, the Company has had joint ventures suppliers providing machinery and equipment: Clipsal, ATA Industry Co., Ltd, Viet Tien Tung Shing

Fabric materials: company has suppliers such as Long An, Thanh Cong, Kondo, Textile Vietnam, in addition to importing raw materials from countries such as Japan, India, China, Thailand , Taiwan

Garment accessories: company has suppliers such as: Golden-Viec, Dinh Son Trade and Production Co., Ltd, Quoc Oai Textile Garment Accessories Co., Ltd, Viet Thuan VTEC

The company has good relationships, trustworthy partners for transportating goods through the customs system, the shipping companies to deliver goods more smoothly

Thus, in each field, the company has their own supplier, which shows that the