GRIGGS GLOBAL ADVANCED UNIVERSITY MASTER OF BUSINESS ADMINISTRATION CAPSTONE PROJECT REPORT BUSINESS STRATEGY FOR GARMENT JOINT STOCK COMPANY THE PERIOD 2013 - 2017 Group Number: Ho Quang Quynh - Leader N ~ Student’s name: Dinh Quang Khai WwW HONG FORMULATION Vu Thi Quynh Hoa xR SONG PROGRAM Nguyen Thi Kim Ngoc HANOI 2012 IN CAPSTONE PROJECT REPORT Group No.03- GaMBA.MO2LI CONEIRMATION SONG — oe “——— Add: SONGHONG _ HONG GARMENT 105 Nguyen Dục JOINT STOCK Thuan Street Nam Tel: +84 3503649365 Dinh City Viet Nam Fax: +84 3503646737 Date: 15/12/2012 To: — - Master of Business administration program — Griggs University -ETC~Vietnam National University, Hanoi Subject: Song Hong Garment Joint stock Company Capstone of Group - Song Hong.JSC No 03 - GaMBA.MO0211 about — Griggs University has done fully support for Group No 03°00 practiced and learned in company COMPANY MO211 when they about operation status, vision and strategy of company - Group memembers have expressed an enthusiastic followed up current situation of company and creative, have closely and receive a good result in working time in Song Hong JSC For and-orrbehalf of SONG HONG JSC Ps =/CONG TY SA io Bui Duc Thinh Chairman of SONG HONG JSC t1 Global Advanced Master of Business Administration Contents CONTEHES vuyyndeendansaiobarsaaeig0641500181000016363131009/4044000039/33808586040215985046/0099080/1/06604018SG38G 26,8 /7)42017070125//070/0400 g7 EN PRODUC TION uy 1.1111.111 " LIST OF ABBREVIATIONS sssisinsissssccsitenneonernnennemmannecnemeamaran LIST OF DIAGRADSI AND TABLE wisacnanncnumisninnonianccrmemancnnsecnvessasun CHAPTER Ìuaddeaauddidrdidtdtioxil10000100806606.698/0006150900625560088S00064819686068849544968ùeyoMiopgreured 10 THEORETICAL BACK GROUN DD iccscscnccscnsncsnsescsvennsariennamanoncmemcnnncanammans 10 1.i Concept, role and basic characteristics of business strategy 10 li [SGRECDES Gf DUSTIGUS STINGER IES cercecccucammn emer: OT 10 er 1] l1.3; gSi0 CHETACISLISUCS OF BUSINESS STALE RY ascitic wenmroonacmmrormnenmnneremanns II 1.2 Specific strategies 12 1.3 Steps of strategic development 13 1.4 Strategy analysis and selection 14 LAL Mlaor0envlfoninionl HiHlVflỗvvsoeaeeuesaadaodebbaeioisktvoidiAi6466651466100448088614 14 LA2 H(UREPV GHNIYOTUHEBTE NHAI ElỗguuedddddaeididỷdoisdtsnotoeadttioteGiaG08gDS6okBSl 14 li, — CØTRBEHHWE ĐEGONIE TH Ho eessemssennsendaaeniiddmeendediothorskdtstoolrEMCBHOREDRGEEIOES L7 LAA TnierraiernyifonmEnl HHRDWNÍSseessuoeesaedadaadidddddiddiiiadiibiaAsoaddikeleolsasisi 18 14.5 Building matrices for Dusmess strategy SElECHION sacs cisnmscscamucsesccans 20 CHAPTER, wisanumunmnunnnnuaaicsadiiiem memes mmemasnmnmnnummmnnnmenane 24 FOUNDATION FOR DEVELOPMENT OF BUSINESS STRATEGY OF 24 SÓNG HONG GARMENT JOINT STOCK COMPANY - 24 2.1 Introduction about Song Hong Garment Joint Stock Company: 24 tol ‘ORREE! DIEQIIUGH er venennseesmen cremains ĐIƯẾTH@RS'ECDffSS ĐỀ CD 24 mconnnnamanoremionnenemonmmencaromenemerterenane 25 21.0 EISLHDIISHIWEHEWRQ D6VEIGDTIHGRÍ DEOCSETsoeeseeinesensddriadreimiseeoiooiseeoee Ba 2.52% CHẾNHISSHŒNH! ElUnrl tí VDITĐBRNWI qauaeaaaaecaiyvaỷdardkssnodbolisbkeliasotkeboegl 26 2.1.5 _ Business results of Song Hong Garment Joint Stock Company in the GE 2.2.) 208 200 To smspnonrrang-tsahonstrohnetrosofngntggtypuarlg9rstMrV00140001005007108013001034:60/400/190:14000//0245101G00080 0M 28 General environment analysis uốny MACrOEUVITONHIENL SUAS 29 cme | manne 29 CB Global Advanced Master of Business LEHIRET SANGO Administration Hrsssnnsrsenenaenostnsdkrsdticgiiaieitd00pAGS0006l086010.0100/GG/G30S5380106164380G đc 0IfMETTIVE€ TTEEIE TXINHTDN Si LÍT TỦ ng aeiesssesossveseotAdi0190 91 93014009820001009/6000900/0031366 42 =.“~.- EX⁄1e£ial THOI0F #yalualion =ÐTE NHITY seuue dan 2.3 Internal environment analysis: Hi go ng0ansnnsenadoioe 46 50 “uc - HĐSOUYOG-QHSEU HTHIWSsemnnnrsensdredsdkesdiitoddiodiitisiSSAYECNGEMUANAGSUQGMSCEIINEGUNS 50 “ra HHƯFWHBI TWGIDFEEVRIigHifif=iITRHEE NHHỮoeoseeeesansnsiesiinsemosessssser 61 CHAP TELE lễ uaeeaedredrrruadiioooidaiepitngniesexg0030083090/600100120066403861013940440810200380/0211660248408384% 65 STRATEGY SELECTION — IMPLEMENTATION SOLUTION FOR 65 SONG HONG GARMENF USC srccssssmncrveesesemnioresenennennnmssenemiivennniensscsanns 65 3.1 Vision and mission of the Song Hong Garment Joint Stock Company 65 Suk VU 3.2 revere eeren eet Selecting business strategy in 2013 — 2017 period 65 65 32,1 SWOT of Song Hong Garment Joint Stock COMPANY sacsisisccsccscencsenneeeee 65 Pee ‘eesti $32.35 Formulating QSPM niatrix to choose the StralePY ssccscccicssassccesansninvmavnerns 68 jx ớt 0201011911101 VẤN censor 3.3 OT LE WRK cere nricamtdcmounenrenemememanemmanananns 68 Solutions on strategy implementation: 71 73 3.5.) SOlions Ot Produclon COPACUY suaaaeeeiaeiiedeieteouiioitidtdedtilidlidkodisde 73 3.3.2 =SOlIHGIS 0H HGflHf1LPf€SGUTWGG O6VEIGDHHGHE sedddadndddodaddddaaddid-iaesseoae 74 Deseo - GDIHEIQRS ỐffLBEHBGIUUẨT aaeaeaddeaeeeeeeseennnnetssbsetdseeoiderooihasseossiliV9AI40020/N0I a] Dede S0IEIðfSOH THBSTNRIREEsoseaaeeedutdeiaeitueoiiioitdiltiakddlliidesdsssnoeronestrsie 78 điều SOUTHS OH TINS cencorcmmecnnmerum 3.3.6 Solutions on research and development (RGD) csccescurenmsncemrsmmaascces vine 84 eR 83 duôn - DOIHHIOITERISK HIGHGPEDHfEfioeedaiemeeeneironndedeeesieteddroosliolgrseihngonsiosbLlE'B 84 3.3.8 Budget plan and stratesy ñinplementation schedule .e+ 85 to CONCLUSION scammer 6300000039000073G0880380N0đ60đ 88 HENGT BH” EŠ ca sscnsccmaarsnnememnnnn ORE 030401368046000404003300187/00/545 90 c3 Global Advanced Master of Business Administration ACKNOWLEDGEMENT First of all, our group would like to express our gratitude to Ass.Pro.Dr Ngo Kim Thanh who has directly taught and guided us to complete this Capstone Project Report; as well as lecturers from Griggs University (USA): and Board of Leaders of Center for Educational Technology and Career development (ETC),Post Graduate Faculty - Vietnam National University of Hanoi for having supported us during the course and enable our completion of this Capstone Project Report We also would like to send departments providing of Song us with our Hong essential sincere Garment documents thank Joint and to Board Stock of Leaders Company helping and relevant for enthusiastically us complete this Capstone Project Report, especially for the advices and comments from Mr Bui Duc Thinh, Chairman of Company’s Board of Management Owing to our limited knowledge and time, we could not avoid mistakes in the analysis of the report Therefore, we would like to receive comments from lecturers of the program to improve our report and make it applicable effectively in the current situation of Song Hong Garment Joint Stock Company Our group would like to commit that the report is an independent research of the group All the data and results presented in the report are honest and from clear S2 sources CS Global Advanced Master of Business Administration INTRODUCTION Reasons for selecting the topic: Since and played 1990, Vietnam’s textile and garment industry has developed rapidly an important role in the growth of the economy Among all the industrial export items, textile and garment products have the highest export value and growth rate In 2011, export value of textile and garment industry reached US$ 14.043 billion, making up over 16% in the total export value of the country and ranking first in the top list of Vietnam's export value Taking advantage of opportunities in the global economic integration and preferences of the State in the accelerating period of Vietnam’s textile and garment industry Song Hong Garment Joint Stock Company has made reasonable investment, improved technology and product quality and reduced prices to create competitiveness gained high for its products Therefore, Company profit, and made significant has made a huge growth, contribution to the socio-economic development of the locality and the region However, in the recent years, due to the global economic crisis, demand for textile and garment products from major markets such as the U.S., EU, etc is forecast to experience a sharp drop Especially, exchange rate instability, inflation, high interest rate and rising requirements of buyers in the world on product quality, production costs, delivery schedule and tough competition also have negative influences on Company’s business and production In 2012, Company’s growth has leveled off; rate of return has decreased compared to the previous years, etc In that context, Company needs to promote weaknesses to seize opportunities, overcome achieve its set target Strategic management its strengths and minimize threats and raise competitiveness to is one of the tools helping Company achieve this goal Formulating a specific and detail strategy implementing it drastically will help the Company for each period and be proactive in coping with the CG Global Advanced current economic Master of Business Admunoictration situation and make development plan to sustain its operation, assert Its position, and make sustainable development steps in the future Object and scope of the study: - Object of the study: Song Hong Garment Joint Stock Company - Scope of the study: Applying basic theories and methodologies on strategic formulation and strategic management based on the competitive trend in garment and textile business to make contribution to improving the strategic formulation of Song Hong Garment Joint Stock Company in the period 2013-2017 Objective of the study: In the current context, each textile and garment company must formulate for it a competitive strategy in domestic market to maximize its advantages so as to gain market share and high profit Therefore, the main objective of this capstone project is to formulate a feasible and suitable business strategy for Song Hong Garment JSC Research methodology: - Using statistical description, comparison and analysis and synthesis - Using SWOT analysis (strengths, weaknesses, opportunities, and threats), Five Forces Model and tools of business strategy selection - Studying secondary data from relevant topics, books, newspapers, internet sources; analyzing financial statements, corporate management activities, and statistics of Song Hong Garment JSC - Collecting comments and judgments of experts in textile and garment industry and members in Board of leaders of Song Hong Garment JSC Structure of the study Apart from the table of contents, list of abbreviations, list of charts and tables, introduction, conclusion, references appendix the report is divided into three main chapters as follows: - Chapter 1: Theoretical background - Chapter 2: Foundation for development ‘nA Garment Joint Stock Company of business strategy of Song Hong t1 - Global Advanced Chapter 3: Master of Business Strategy —_ Administration selection -implementation Garment Joint Stock Company solution for Song Hong c2 Global Advanced Master of Business Administration LIST OF ABBREVIATIONS WTO World Trade Organization APTA Asean Free Trade Association ASEAN Association of Southeast Asian Nations LU European Union VITAS Vietnam Textile and Apparel Association tái The consumer price index GDP Gross national product FOB delivers finished products on board EEE External Factor Evaluation Matrix IFE Internal Factor Evaluation Matrix IE Matrix evaluating internal and external factors CPM Competitive Profile Matrix PEST Political - Economic — Social — Technology QSPM Quantitative Strategic PlaningMatrix SWOT Matrix Strengths - Weaknesses - Opportunities — Threat SO Competitive strategy combining the strengths and opportunities of Company vi Competitive strategy combining the strengths and risks of Company WO Competitive strategy combining the weaknesses and opportunities of Company WT Competitive strategy Company USD United State Dollar VND Viet Nam Dong BCTC Financial Statement combining the weaknesses and risks of c2 Global Advanced Master of Business Administration Brig LIST OF DIAGRAM AND TABLE Strategic development process Figure 1.2: Five Forces Model by Michael Porter Figure 1.3% Impact of external environment Table 1.1: EFE Matrix lable CPM Matrix t` Figure 1.1: IFE Matrix Table 1.4: SWOT Matrix lable IE Matrix nN Fable 1.3: Table 1.6: QSPM lable 2.1: Some business results from 2010 to June 2012 lable 2.2: GDP growth and inflation rate of Vietnam lable 2.3: List of contracts with major suppliers Table 2.4: Competitive Profile Matrix - CPM Table 2,3: Comparison of financial indicators lable 2.6: EFE Matrix of Song Hong Garment JSC Fable 2.7: Business results of Song Hong and Garment JSC Table 2.8: Structure of Revenue Table 2.9: Structure of gross profit lable 2.10: Structure of production cost over revenue lable 2.11: Major financial indicators able 2.12: IFE Matrix of Song Hong and Garment JSC able 3.1: SWOT Matrix for SONG HONG lable 3.2: IE Matrix lable 3.3: QSPM Pable 3.4: Targets for the period 2013-2017 by year lable 3.5: Marketing Mix Strategy lable 3.6: Budget plan and strategy implementation schedule Matrix GARMENT JSC Matrix ... Garment Joint Stock Company of business strategy of Song Hong t1 - Global Advanced Chapter 3: Master of Business Strategy —_ Administration selection -implementation Garment Joint Stock Company. .. Business Administration Business strategy of a firm is reflected in a continual process Business strategy always has aggressive thought to win in business Business strategy is often built up for. .. strategic formulation and strategic management based on the competitive trend in garment and textile business to make contribution to improving the strategic formulation of Song Hong Garment Joint Stock