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FORMULATING BUSINESS STRATEGYFOR THE NORTH KINHDO FOOD PROCESSING JOINT STOCK COMPANY TO 2020LUẬN VĂNXây dựng chiến lược kinh doanh cho công ty Cổ phần chế biến thực phẩm Kinh đô Miền Bắc In order to solve the problem which was identified above, in this capstone project report, author focused on the following objectives:•Summary relevant theories on strategy to implicate for Vietnam’s confectionery market analysis.•Analyzing internal and external business environment to define strengths, weakness, opportunities, threats of NKD. •Proposal suitable business strategic choice which meet to business environment in new period.
THESIS FORMULATING BUSINESS STRATEGY FOR THE NORTH KINHDO FOOD PROCESSING JOINT STOCK COMPANY TO 2020 LUẬN VĂN Xây dựng chiến lược kinh doanh cho công ty Cổ phần chế biến thực phẩm Kinh đô Miền Bắc -1- TABLE OF CONTENT ACKNOWLEDGEMENT To complete capstone project report before graduating from the Master of Business Administration Program (GaMBA) by Vietnam National University in association , we have received many supports from different people We want to take this opportunity to thank everybody who has helped us in completing this capstone project report as well as this MBA course We would like to thank PhD Sean Mc Gough and Associate Prof and PhD Vu Tri Dung, who have delivered the strategic management course and given us the guidance to capstone project We admire the knowledge and dedication of the teachers so much We also want to thank all the teachers of the Gamba program, who have trained and helped us to improve knowledge in business administration We have actually been applying this knowledge to our work effectively -2- We also thank - Vietnam National University and University for having facilitated us with good senior business administration study and research environment Finally, we would like to send our deeply thanks to Board of Directors, staff of the Northern Kinh Do Food Processing Joint Stock Company We will not be able to complete this capstone project without their support Especially MBA Tran Quoc Viet, the company’s General Director, who has enthusiastically supported us during our empirical research in the company to complete this report ABBREVIATION WTO World Trade Organization APEC Asia –Pacific Economic Co-operation ASEM Asia – Europe Meeting GDP Gross Domestic Product SBU Strategic Business Unit PEST Political, Economic, Society, Technology SWOT Strength, Weakness, Opportunity, Threat BCG Boston Consultant Group PLC Product Life Cycle IT Information System R&D Research & Development -3- NKD North Kinh Do food processing joint stock company KDC Kinh Do Corporation LIST OF FIGURE Figure 1.1: The strategy – Making pyramid Figure 1.2: Identifying strategy for a single business Figure 1.3: Formulating business strategy model Figure 1.4: A company’s external environment Figure 1.5: The five forces model of competition Figure 1.6: Stage of the product life cycle Figure 1.7: The value chain: Primary and support activities Figure 1.8: The SWOT matrix Figure 1.9: The BGG matrix Figure 1.10: The Strategic Balanced Scorecard Framework Figure 2.1: The market share of Kinhdo holding -4- Figure 2.2: The revenue of NKD by years Figure 2.3: The monthly inflation rate in last three years Figure 2.4: Percent of the best selling product Figure 2.5: Comparing quality of product between NKD and c ompetitors Figure 2.6: Evaluating distribution among confectionary company Figure 2.7: Comparing revenue between BBC&NKD Figure 2.8: Comparing financial index between BBC&NKD Figure 2.9: These factors customer care for when decide to buy confectionary Figure 2.10: Evaluating customer’s loyalty (1) Figure 2.11: Evaluating customer’s loyalty (2) Figure 2.12: These levels of product group of NKD Figure 2.13: The density of every product line in 2007 Figure 2.14: The revenue of every product line by years Figure 2.15: The revenue and EBIT of the Bun line by years Figure 2.16: The revenue and EBIT of the Cake line by years Figure 2.17: The revenue and EBIT of the Snack line by years Figure 2.18: The revenue and EBIT of the Chocolate line by years Figure 2.19: Comparing Gross Profit between NKD&BBC Figure 2.20: Transportation cost per Revenue Figure 2.21: The chart of distribution system Figure 2.22: The chart of distribution system Figure 2.23: Comparing revenue per sale expensive between NKD&BBC Figure 2.24: The process of collect information and explain from customer Figure 2.25: Net Profit per Employee Figure 2.26: Percent of employee Figure 3.1: Strategic diagram of Kinh Do Corporation -5- Figure 3.2: Product life cycle diagram of NKD Figure 3.3: BCG of NKD’s product lines Figure 3.4: The organization structure of NKD LIST OF TABLE Table 1.1: Summary of suitable options with every strategy in these three general Table 2.1: List of subsidiary of Kinhdo holding Table 2.2: Key finance factors of NKD Table 2.3: Vietnam economic development figures from 2004 to 2008 Table 2.4: Vietnam society development figure from 2004 to 2008 Table 2.5: List of major suppliers Table 2.6: Increasing price of major raw material Table 2.7: The revenue of every line by years Table 2.8: The profit and lost of Bun line by years Table 2.9: The profit and lost of Cake line by years Table 2.10: The profit and lost of the Snack line by years Table 2.11: The profit and lost of the Chocolate line by years -6- Table 2.12: Summary of NKD’s product life cycle analysis Table 2.13: Summary of external factors Table 2.14: Number of hours machine stop Table 2.15: Exploiting productivity of production capacity Table 2.16: Percent of waste in manufacturing process Table 2.17: The inventory of NKD Table 2.18: Transportation cost Table 2.19: Performance index of NKD’s distribution network Table 2.20: Statistics of human resource of NKD Table 2.21 Summary of internal factors Table 3.1 Matching SWOT to propose corporate-level strategy Table 3.2: Result of evaluation about product line’s position Table 3.3: Summary strategy of product line Table 3.4: Matching strategic objectives and strategic programs by balanced scorecard model LIST OF APPENDIX Appendix 1: The Income statement & Finance ratios of BBC Appendix 2: The NKD’s current organization structure chart Appendix 3: The Income statement & Finance ratios of NKD Appendix 4: The balance sheet of NKD in last five years Appendix 5: The list of machine and equipment -7- EXECUTIVE SUMMARY NKD is a subsidiary of Kinh Do Corporation After eight years of operation, the company has become a leading confectionery company in North Vietnam with the revenue estimated at more than 800 billion VND in 2009 However, in recent years, the growth of the company has been reduced, especially the profit was much affected by the fast changing business environment NKD is having difficulties in finding appropriate solutions to help the company exploit opportunities better and overcome challenges to continue the sustainable development As it is a large reputable company listed in Vietnam's stock market so we have chosen NKD as the target for researching, collecting information, analyzing and proposing some solutions to improve business strategy of NKD In fact, NKD is facing with hard competition of foreign competitors having strong finance, full experience In addition, a lot threats come from external environment such as high inflation rate, increasing fast of material price, the requirement higher and higher about food safety standard, the substitute product with more nutrition, convenience -8- in use, etc Weaknesses of the company also were showed, in which especially is weakness about strategic management However, NKD has a lot of strengths such as production, distribution network, and especially it is a market leader about brand, quality of product, revenue The group has applied PEST and Five Forces model to analyze external environment, Value Chain model to analyze internal environment After comparing between current business strategies and business environment in new period, the group has indicated unsuitable issues which will become terrible problem for the company Base on SWOT model which match external – internal environment, the group has proposed two major strategies for corporate level are vertical integration and diversified strategies It helps company improve competitive ability by the way to develop strengths, limit weaknesses, exploit well opportunities and overcome threats In business strategy level, the group has applied Product Life Cycle and BCG model to propose business strategies for four main product of the company Because it has different positions on the market and posit different stage in product life cycle analysis Therefore, it has also different business strategies This capstone project report has presented clearly these strategies for every product lines In the last part, the group has proposed some main solutions to implement strategies by using Balanced Scorecard model This capstone project report is written with hope that it will be implemented by NKD company -9- INTRODUCTION Rationale: Vietnam is considered as a country with great potential for food service, according to industry analysts Firstly, the country has over 86 million people Secondly, living standards in Vietnam have also improved quite rapidly The GDP growth has registered 7-8% on average during that last five years, and is expected to achieve higher growth in next time, thanks to more open trading policy Food service therefore is projected to develop in line with the country’s growth Sales of packaged food in Vietnam are expected to grow by 15% in current value terms to reach VND37 trillion The key areas with the highest growth rates include bakery products, dairy products, noodles, dried processed foods, oils & fats, and baby food These are also among the largest contributors in value terms, thus making the future growth of packaged food very promising - 10 - Table 3.4: Matching strategic objectives and strategic programs by balanced All strategic objectives for each perspective in the Balanced Scorecard and strategic programs that helps achieve a strategic objective Di V scorecard model Strategic Objectives Financial perspectives F1: The revenue growth 20%-45% yearly F2: Gross Profit: 27% - 30% F3: Net Profit: 14% - 19% F4: ROA: 20 -30%; ROE: 35%-40% Customer perspectives C1: Improve brand and consolidate customer loyalty in the North C2: Obtain competitive pricing C3: Ensure customer satisfaction Internal process perspectives P1: Apply modern management processes P2: Exploit distribution system well P3: Improve inventory management process P4: Improve material supplying process Learning and Growth perspectives L1: Improve quality of human resource L2: Create professional working environment L3: Improve competitive compensation policy L4: Contribute society activities Source: from evaluation of the group First is diversified strategy The benefits are derived from horizontal relationship that is the leveraging of core competencies or sharing of activities across business units within a corporation Instead, potential benefits can be gained from vertical - 102 - relationship – the creation of synergies from interaction of the corporate office with the individual business unit There are two main sources of such synergies First, the corporate office can contribute to “parenting” and restructuring of (often acquired) business Second, the corporate office can add value by viewing the entire corporation as a family or “portfolio” of business and allocating resources to optimize corporate goals of profitability, cash flow, and growth Additionally, the corporate office enhances value by establishing appropriate human resource practices and financial controls for each of its business unit (3, pp202) When this strategy is implemented will create growth of revenue meeting with requirement of financial objective is revenue growth increase by 20% – 45% yearly At that time, the firm has more strategic business units that mean having more opportunities to increase revenue and get more profit from other businesses Second is vertical integration strategy The firm incorporates more process toward the original source of raw material (backward integration) and toward ultimate consumer (forward integration) The benefits of it include (1) a secure of source of supply of raw material or distribution channel that cannot be “held hostage” to extend markets where costs can fluctuate over time, (2) protection and control required to produce and deliver valuable products and services, (3) access to new business opportunities and new form of technologies, and (4) simplified procurement and administrative procedures since key activities are brought inside the firm, eliminating the need to deal with a wide variety of suppliers and distributions (3, pp198) When implement this strategy, the most important thing is help the firm can reduce cost of good sold thank to stableness and low price of raw material thus can achieve gross profit as well as ROA, ROE objectives Third, the concentric strategy will help the firm to consolidate market share and increase profitability of business unit, in this situation is the Snack’s product line Fourth and fifth are exploit new market and develop new product Both strategic programs are implemented will help the firm increase revenue and expand to market share The firm have to implement there strategies to ensure that competitive position of every product line in particular and the firm in general are increasing on the market However, the firm should note selection suitable segments to focus and develop new product which meet customer demand and has profitability - 103 - 3.4.2 The solutions to achieve customer perspectives One of the most important objectives of NKD is improvement brand and consolidation customer loyalty in the north for Kinhdo band In order to achieve this objectives, the firm should implement three programs that are develop new product, invest new machine with modern technology to produce high quality product, and conduct customer management system In fact, currently Kinhdo is well-known brand in Vietnam and was accepted by customer However, competition is harder and harder because of integration process and open door of economy In addition, customer need change fast thus if Kinhdo has not strategic programs to improve and consolidate customer loyalty, threats of declining trust and market share are easy to happened The objective about obtaining competitive pricing which have relation with vertical integration and concentric diversification should be implemented parallel with improvement quality of product Generally, Kinhdo’s product has high quality and high price also However, the price is high but customer can accept because of comparing with quality of that product The competitive pricing in this situation are understood that is level of price customers will deceive to buy because they are satisfied about quality of product comparing with similar product of competitors The vertical integration strategy will help the firm decrease price of raw material In addition, The concentric diversification for snack product line will help the firm focus on core competitions which can decrease cost of good sold thus it will help the firm to keep competitive pricing especially is product line in maturity stage of product life cycle such as snack product line The ensuring customer satisfaction objective will be conducted by customer management program Along with other programs which were concerned above, customer management is program the firm should implement as soon as possible because this is a big weakness of NKD If its competitors know this weakness they exploit this weakness as big their opportunity Additionally, NKD in particular and Kinhdo in general is big company in VN with well-known brand but lack of a good customer management system is terrible problem 3.4.3 The solutions to achieve internal process perspectives - 104 - The diversified strategy will help the firm to achieve objective about applying modern management and exploiting distribution system Diversification means the firm will operate in more business fields which make effort to apply modern management system such as: ISO, MBO (Management By Objective), TQM (Total Quality Management), Value chain, etc In addition, buy back, merger or joint venture will make opportunity to use strength each other’s about management system When the firm implement diversified strategy, its distribution system will are exploited better because will having more product using this distribution system to sell their product Supply chain management is one of modern management which NKD should implement First, it will help the firm to overcome two weaknesses are inventory and supplying material management and last it will help the firm to improve management When the firm becomes bigger and operates in many business fields, supply chain is a management method can not be lacked Normally, supply chain is applied with support of software like ERP software (Enterprise Resource Planning) It will not only help to manage well inventory or supplying material but also help declining cost of good sold for company 3.4.4 The solutions to achieve learning and growth perspectives Two major programs to achieve learning and growth perspectives are recruiting & training and restructuring First is restructuring With yearly growth has been over 30%, change fast of business environment, strategic objectives and business strategy of the firm has changed, the current organization structure can not meet requirements of that change Therefore restructuring is a program having to implement which can create good condition for implementing new business strategy According to business strategy which proposed above, the organization structure is organized following matrix model is most suitableness This organization model is organized by two directions First is product line direction with division of the firm’s product into product lines such as Bun, Cake, Snack, Chocolate, and others Every product line has a leader who has responsibility to run and implement business strategy of that line Second is functional direction which is divided into functional departments such as: Marketing, Sale, Quality control, production, accounting, etc These functional departments have responsibility to conduct business strategy following its function The Excutive Management - 105 - Committee includes senior managers of company having responsibility to give final important decision See the figure 3.7 in next page Second is recruiting and training, in order to achieve having human resource with high quality and professional working environment objectives, the firm should implement well recruiting and training In addition, improving compensation police for employee also is very important to overcome current weaknesses are unstableness and unbalance among worker, staff and manager levels EXCUTIVE MANAGEMENT COMMITTEE Follow functional organization BUSINESS Sale/Marketing PRODUCTION QC/RD/Factories SUPPORT HR/Account/IT/OM BUN Follow product line CAKE SNACK CHOCOLETE OTHERS Source: from opinion of the author Figure 3.4 The organization structure of NKD The objective about contribution society activities is looked like corporate culture Beside business activities, the firm should attend to society activities which not only create good tradition but also improve company image for consumer and whole society LIMITATION - 106 - This capstone project report has finished base on objectives which the group set up However, it even was limited by some issues below: Firstly is information, although the group strove to collect information by many ways, information which needs to analyze is not enough, especially is internal information such as competitors, market demand, etc Secondly, NKD is operating in many different business fields, when realize this capstone project report, the group focuses only confectionary business field Of course, having closed relation among business fields thus formulating suitable strategy have to be considered with strategy of other business fields In fact is that, although didn’t mention in this capstone project report, the group considered generally all business fields of the company to propose business strategy for it Additionally, confectionary is major business of company, therefore its business strategy will make orientation for all other different business fields Thirdly, because of limitation of time and money, the group couldn’t enough implement interviewing with all interviewee who can provide necessary information for analyzing such as: consumer, line manager, senior manager of KDC, etc However, the group thinks that limitation showed above don’t affect hard to finishing this capstone project report The most important thing is that it has solved all of its objectives With his responsibility, by heart himself, the group has written this capstone project report with hope that it will contribute importantly for company’s development in new period CONCLUSION - 107 - According to industry analysts, Vietnam is considered to be a country with great potential for food processing industry First of all, our country has more than 86 million people Secondly, the living standard in Vietnam has increased quickly GDP growth has reached an average of 7-8% in the last five years thanks to the reforming, opening and integrating policy Thus the food service industry is expected to develop rapidly in line with the country growth The sales of packaged food in Vietnam is expected to increase by over 15% comparing to the present value, reaching VND 37 trillion The main areas with the highest growth rate include bread, dairy products, dried food processing, oil and grease, children food These are companies contributing the most value, thereby making the potential future of packed food very promising Having operated in the food processing and trading in northern Vietnam, NKD wants to become the leading company manufacturing and supplying to customers with high quality products, ensuring people’s health and moving forward to improve the quality of life for people Being a large reputable company in Vietnam's stock market, the group has chosen NKD as the subject for researching, collecting information and applying knowledge to formulate the appropriate business strategy to help the company create competitiveness advantages by exploiting opportunities better, avoiding challenges, consolidating strengths and overcoming weaknesses To successfully implement this capstone project report, the group has applied various methods and models which are important tools for formulating business strategy such as PEST and Five Forces model to find the opportunities and threats; Value Chain model and Product Life Cycle to find the strengths and weaknesses, SWOT model, BCG model to choose appropriate strategies and Balance Scorecard to propose main solutions to implement the company strategy The group has completed this capstone project with one great hope to contribute important things to the development of NKD company in the new period However, the success will depend on the implementation process as well as change responses of the Board of Directors, managers and employees in the company Due to the time and knowledge limit, shortcoming is unavoidable for this capstone - 108 - project report Our group wishes to receive comments from teachers, professionals and classmates to improve the report - 109 - REFERRENCE 1) PGS, TS Lê Thế Giới; TS Nguyễn Thanh Liêm; ThS Mai Hữu Ái (2007); Quản trị chiến lược; Nhà xuất thống kê 2) Garry D Smith; Danny R Arnold; Bobby G Bizzell (1997) Chiến lược sách lược Kinhdoanh Nhà xuất thống kê 3) Arthur A Thompson and Jr A.J Strickland III (Both of the University of Alabama) (1995) Crafting and Executing Strategy McGrew-Hill Irwin twelfth edition 4) Gregory G Dess (University of Texas at Dallas), G T Lumpkin (University of Illinois at Chicago), Marilyn L Taylor (University of Missouri at Kansas city) (2005) Strategic management McGrew-Hill second edition 5) Fred R.David (Francis Marion University, Florence, South Caroline) (2005) Strategic management concept, Tenth Edition, Upper Saddle River, New Jersey 07458 6) (2006) PEST analysis, http://www.quicmba.com/strategy/pest/.V3, PP1-3 7) (2006) PEST analysis, http://www.netmba.com/strategy/pest/.V3, PP1-3 8) (2006) Porters Force, http://www.themanager.org/Models/p5f.htm V3, PP1-3 9) (2006) Value Chain Analysis, http://www.marketingteacher.com/lessons/lesson_value_chain.htm v3, pp1-3 10) (2006) value chain model, http://www.ocw.mit.edu/ocwweb/sloan-school-ofmanagement/15-565Jintegrating-eSystems -Globel-InformationSystemsSpring02/CourseHome/index.htm 11) Paul R Niven ((2002) Balanced Scorecard step by step, John Wiley & Sons, Inc 12) http;//www.12manage.com/methods_bcgmatrix.html - 110 - APPENDIX Appendix 1: The Income statement & Finance ratios of BBC Incom statement Items Revenue from sales of goods and services Deductions Net sales Costs of goods sold Gross profit Financial income Financial expenses Interest expenses Sales expenses Administrative expenses Net operating profit Other revenue Other expenses Other profit Profits before tax Corporate Income Tax Deferred Corporate Income Tax Profits after tax Earnings per share 2008 2007 545,208 788 544,419 420,514 123,906 31,517 32,509 7,215 76,055 28,102 18,757 3,721 553 3,168 21,925 1,074 456,850 2,875 453,975 335,662 118,313 14,190 4,427 3,297 74,254 21,061 32,762 1,223 659 564 33,325 8,882 20,851 24,443 2006 2005 2004 343,061 1,731 341,331 254,909 86,422 9,011 3,324 2,478 51,308 16,092 24,710 1,160 538 622 25,332 6,149 287,092 1,730 285,362 216,296 69,066 220 3,153 245,607 1,600 244,007 179,084 64,923 141 3,445 35,856 14,357 15,921 561 390 170 16,091 3,773 37,164 12,493 11,963 1,076 950 126 12,089 2,894 19,183 12,318 9,195 Financial ratios Items Debt ratios Short-term liabilities/Owners' Equity Total liabilities/Owners' Equity Total liabilities/Total assets Growth ratios Sales growth Net profit growth Liquidity ratios Current ratio Acid ratio Profitability ratios Gross Profit/Sales Net Profit/Sales Return on Equity (ROE) Return on Assets (ROA) Liquid assets turnover Inventory turnover Sales per shares Earnings per shares (EPS) 2008 2007 69% 84% 45% 2005 2004 31% 33% 25% 92% 96% 49% 91% 98% 49% 1.27 0.65 2.77 1.64 1.21 0.47 1.24 0.45 2.54 5.23 44,643.96 2,403.76 25& 6% 11% 8% 2.18 5.35 33,923.76 1,906.49 24% 4% 14% 7% 2.83 4.65 28,062.53 1,211.36 27% 4% 11% 6% 2.67 4.17 23,995.61 904.28 20% -15% 35,302.84 1,352.11 2006 33% 27% Source: www.SSI.com.vn - 111 - Appendix 2: THE NKD’S CURRENT ORGANIZATION STRUCTURE CHART BOARD OF MANAGEMENT Source: From report of NKD ACCOUNTING INFORMATION TECHNOLOGY HUMAN RESOURCE ORDER MANAGEMENT MAINTENANCE RESEARCH & DEVELOPMENT QUALITY CONTROL FACTORIES BAKE RIES MAR KETING SALES - 112 - SUPPORT PRODUCTION BUSINESS Appendix 3- The Income statement & Finance ratios of NKD Incom statement Items Revenue from sales of goods and services Deductions Net sales Costs of goods sold Gross profit Financial income Financial expenses Interest expenses Sales expenses Administrative expenses Net operating profit Other revenue Other expenses Other profit Profits before tax Corporate Income Tax Deferred Corporate Income Tax Minority interests Profits after tax Earnings per share 2008 2007 2006 2005 2004 691,727 566,065 422,662 356,323 276,730 2,390 689,338 526,246 163,091 6,851 80,190 17,777 62,426 25,964 1,362 3,797 3,642 155 1,518 539 27 -4,549 561,516 429,414 132,102 47,339 13,781 12,462 43,667 24,593 97,401 6,492 7,876 -1,384 96,017 23,697 3,234 419,429 306,081 113,348 4,206 4,670 3,898 33,130 24,712 55,042 5,289 4,712 577 55,619 -5,126 1,576 354,747 262,152 92,595 1,005 4,383 1,721 275,009 205,360 69,649 162 3,452 30,501 17,586 41,130 6,106 5,594 511 41,641 6,225 24,336 15,838 26,185 5,141 4,260 881 27,067 3,342 952 72,320 32 60,713 35,416 23,725 Financial ratios Items Debt ratios Short-term liabilities/Owners' Equity Total liabilities/Owners' Equity Total liabilities/Total assets Growth ratios Sales growth Net profit growth Liquidity ratios Current ratio Acid ratio Profitability ratios Gross Profit/Sales Net Profit/Sales Return on Equity (ROE) Return on Assets (ROA) Liquid assets turnover Total assets turnover Inventory turnover Sales per shares 2008 2007 2006 2005 2004 160% 133% 34% 24% 54% 171% 63% 151% 60% 65% 39% 69% 41% 78% 44% 23% -99% 34% 19% 19% 34% 29% 49% 32% 66% 0.62 0.44 1.07 0.89 1.72 1.12 4.55 3.83 1.36 0.52 0.2% 26% 19% 3.27 17% 29% 20% 1.57 14% 30% 18% 3.56 10% 22% 13% 1.97 9% 31% 17% 4.91 11.4 56,058.61 9.06 55,707.18 10.23 49,932.03 12.4 35,193.91 7.95 27,283.20 Source: www.SSI.com.vn Appendix 4: The balance sheet of NKD in last five years - 113 - Items ASSETS A - CURRENT ASSETS I Cash and Cash Equivalents Cash Cash Equivalents II Short-term financial investments Short-term investments Provision for devaluation of short-term investments III Short-term receivable Accounts receivable Prepayments to suppliers Inter-company receivable Receivable based on progress of construction contracts Other receivable Provision for short-term bad debts IV Inventory Investory Provision for devaluation of inventory V Other short-term assets Short-term prepayments Deductible VAT Taxes and receivable from State Budget Other short-term assets B LONG-TERM ASSETS I Long-term receivable Long term accounts receivable Investments in subsidiaries Inter-company long-term receivable Other long-term receivable Provision for long-term bad debts II Fixed assets Tangible fixed assets - Historical cost - Accumulated depreciation Financial leasehold assets - Historical cost - Accumulated depreciation Intangible fixed assets - Historical cost - Accumulated depreciation Construction in progress III Investment property - Historical cost - Accumulated depreciation IV Long-term financial investments Investments in subsidiaries Investments in joint ventures Other long-term investments Provision for devaluation of long-term financial investments 2008 2007 2006 2005 2004 210,993 69,902 52,902 17,000 8,449 24,353 -15,904 57,825 16,675 7,385 31,813 1,953 356,819 253,500 173,500 80,000 13,491 15,286 -1,795 26,409 12,695 5,266 6,981 1,466 117,875 28,207 28,207 180,128 64,521 56,026 14,166 84,124 6,229 3,370 1,344 1,734 1,734 44,685 11,756 8,089 22,867 1,973 1,514 60,471 60,471 61,985 61,985 41,003 41,003 28,609 34,575 14,346 3,074 55 7,917 3,300 374,352 1,435 670 47 2,245 731 2,873 1,056 96,008 144 1,056 79,653 144 144 144 93,855 54,813 77,726 -22,913 13,354 23,523 -10,169 12,763 13,278 -515 12,925 78,242 57,816 71,562 -13,746 9,967 17,214 -7,247 10,453 10,601 -148 2005 2,009 2004 1,267 717 271,689 1,452 62 213,076 211,668 188,849 272,225 -83,376 3,634 23,523 -19,889 11,268 15,095 -3,826 7,916 34,312 34,525 -213 124,983 224,457 182,099 236,399 -54,300 6,575 23,523 -16,948 12,614 15,095 -2,481 23,169 208,044 182,582 215,982 -33,400 9,958 23,523 -13,566 14,115 15,095 -980 1,389 42,618 3,988 3,988 169,580 -44,597 42,618 Appendix 4: The balance sheet of NKD in last five years (cont) Items V Other long-term assets 2008 3,390 - 114 - 2007 4,614 2006 1,045 Long-term prepaid expenses Deferred tax assets Other long-term assets Total assets LIABILITIES AND OWNERS' EQUITY A LIABILITIES I Short-term liabilities Short-term borrowings Payable to suppliers Unearned revenue Taxes and Payable to State Budget Payable to employees Expenses payable Inter-company payable Payable based on progress of construction contracts Other short-term payable 10 Provision for short-term payable II Long-term liabilities Long-term payable to suppliers Long-term inter-company payable Other long-term payable Long-term borrowings Deferred tax liabilities Redundancy Pension Fund B - Owners' Equity I Owners' Equity Contributed capital Surplus share capital Other owners' capital Treasury stocks Assets revaluation reserve Exchange rate reserve Invesment and Development Fund Financial Reserve Fund Other Fund 10 Retained Earnings II Other Sources and Funds Remuneration and Welfare Fund Expenditure Fund Expenditure Fund in fixed assets C MINORITY INTERESTS Total liabilities and owners' equity 3,316 73 4,471 144 901 2,009 1,267 276,135 135,679 113,171 39,564 59,285 41,247 8,596 11,634 7,495 8,299 652 585,346 628,508 144 330,951 367,687 342,602 135,036 37,351 2,068 12,675 2,188 11,502 114,153 376,568 332,605 113,575 45,116 1,011 26,725 2,036 4,417 123,037 129,961 68,550 27,067 23,369 1,098 2,933 1,874 5,608 6,330 27,630 16,688 271 25,085 43,963 61,411 22,032 1,696 38,881 3,053 217,433 214,594 122,967 55,767 3,386 251,741 249,422 100,798 55,767 200,804 199,795 84,000 55,767 -127 -127 -61 4,570 73,607 18,038 15,007 3,031 59,205 2,206 162,964 162,964 125,767 76,394 76,014 61,647 364 35,986 2,839 2,839 92,984 2,319 2,319 60,089 1,009 1,009 226 585,346 199 628,508 186 330,951 36,833 14,367 380 276,135 135,679 Source: www.SSI.com.vn Appendix 5: The list of machine and equipment - 115 - - 116 - [...]... customers throughout a network consisting of 45 Kinhdo Bakeries (39 shops in Ho Chi Minh City and 6 shops in Ha Noi City) On the other hand, Kinhdo is expanding direct sell by franchise form In overseas market, Kinhdo has exported his products to many countries such as United States, Japan, Russia, Germany, Taiwan, Singapore, Malaysia, Cambodia, Laos, Thailand At now, Kinhdo is focusing to some new and large... Snacks Launching Snacks with Kinhdo brand, reasonable prices and various flavor met domestic customer needs That was first successful step of Kinhdo which has opened big opportunities for the next important next development Then after that, Kinhdo has invested millions of USD to buy modern technologies to meet variety of consumer need, such as: Cookies line, Cracker line, chocolate line, so on They have... Strategic choices (3) setting up vision, mission and long term objective for the firm; (4) business strategic choice which can choose the most suitable business strategies to apply for Business(5) A’sthe lastBusiness B’s implementation, Business Business the company; is strategic in C’s this step will show D’s how strategy strategy strategy strategy - 19 STRATEGIC IMPLEMENTATION strategies chosen will... perspective Typical examples include profitability, revenue growth, and economic value added (6, pp17) • Customer perspective When choosing measure for customer perspective, the firm must answer two critical questions: Who are out target customer? And what is our value proposition is serving them? This perspective will normally include measure widely used today: customer satisfaction, customer loyalty, market... availability of information, and alignment could all have a place here (6) CHAPTER 2: STRATEGIC ANALYSIS FOR NKD 2.1 Introducing the NKD’s background Kinhdo Group: - 35 - Established in 1993, Kinhdo was a small workshop with total capital investment of USD 125,000 and 70 staff It produced and distributed some kinds of Snacks which were new to Vietnamese consumers The years 1993 and 1994 were the creek for Kinhdo’s... strategy – making pyramids for diversified company (3) Responsibility of corporate – level managers Responsibility of business – level general managers Corporate Corporate Strategyies Strategyies Businessstrategies strategies Business Responsibility of heads of major functional activities within a business unit or division managers Responsibility of plant managers, geographic unit managers, and lower-level... charge to manage different strategy level Corporate strategy is responsibility of corporate-level managers, business strategy is responsibility of business level-general managers, functional strategy is responsibility of heads of major functional activities within a business unit or division and operating strategy is responsibility of plant managers, geographic unit managers, and managers of front line... enterprise Kinh Do Corporation is one of the food processing enterprises in Vietnam's largest established in 1993 in Ho Chi Minh City, KDC has developed very rapidly, with revenues (particularly confectionery food industry) each year reached over 3,000 billion and captured more than 35% market share (according to Euromonitor International survey of 2008) Corporation Food Processing North Kinh Do (NKD)... Figure 1.4: A company’s external environment A PEST model: PEST is model scanning the general environment which can effect dramatic on firm strategy Typically, a firm has little ability to predict trends and events in the general environment, and event less ability to control them (3) PEST is the abbreviation of Political, Economic, Social, and Technological segments It describes a framework for analysis... assist each other with reasonable prices, improved quality, development of new services, just-in-time deliveries, and reduce inventory cost, thus enhancing long term profitability for all concerned (4) • The Bargaining Power of Buyer: when customers are concentrated or large, their bargaining power represents a major force affecting the intensity competition in an industry Rival firms may offer extended