DISSERTATION BUILDING DEVELOPMENT STRATEGY FOR TERAZO TILES OF NAM THANG TRADE CONSTRUCTIVE INVESTMENT JOINT STOCK COMPANY DURING THE PERIOD OF 2011 – 2016 TABLE OF CONTENTS LIST OF ABBREVIATION LIST OF TABLES .7 LIST OF FIGURES ACKNOWLEDGEMENT INTRODUCTION .9 CHAPTER 1: LITERATURE REVIEW OF STRATEGY AND STRATEGIC MANAGEMENT 11 1.1 Fundamental definitions 11 1.1.1 Definition of strategy 11 1.1.2 Definition of strategic management 13 1.1.3 Roles of strategic management 13 1.1.4 The meaning of building the business strategy 14 1.1.5 Process of building the business strategy 15 1.2 Analyze the external environment 16 1.2.1 Analysis of macro environment 16 * Economy environment 16 * Science-technology environment 16 * Culture-social environment 17 * Demography environment 17 * Political-legal environment .17 * International environment 18 1.2.2 Analysis of micro- environment 18 2.3.1.6 External Factor Evaluation EFE 21 1.2.3 Analyze the internal environment of the company 21 1.2.4 Strategy formulation 24 1.2.4.1 Strategy formulation process 24 1.2.4.2 Analyze SWOT matrix .25 1.2.5 The basic business strategies in the practice 25 CHAPTER 2: ANALYZING THE SITUATION BUSINESS STRATEGIES ON TERAZO TILES OF NAM THANG TRADE CONSTRUCTIVE INVESTMENT JSC 30 2.1 Introduction of Nam Thang trade constructive investment Joint Stock Company 30 2.1.1 History of development - Vision of the company .30 2.1.2 Managing structure of the company 31 2.1.3 Production and business operations of the company 33 2.2 Introduction about the products 35 2.2.1 General characteristics of the product .35 2.2.2 Summarizing producing technology 35 2.2.3 Distribution methods of products and sales services 36 2.3 External environment analysis 37 2.3.1 Macro environmental analysis 37 2.3.1.1 Economic environment (E): 38 2.3.1.2 Political environment and legal (P): 39 2.3.1.3 Natural environment, culture, social (S): 40 2.3.1.4 Technology Environmental (T): 40 2.3.1.5 International environment 41 2.3.2.1 Analyze the industry environment .42 2.3.2.2 Analyzing micro-environment (analyzing five competitive forces) 43 * Bargaining power of supplier 44 2.4 Analyze the internal environment .47 2.4.1 Resources 47 2.4.2 Intangible resources 51 2.4.3 Production activities 52 2.4.4 Business activities 53 2.4.6 Internal factor evaluation matrix IFE 55 2.4.7 Using SWOT Matrix to making strategy for Terazo tiles of Nam Thang TCI Joint Stock Company 56 CHAPTER 3: BUILD BUSINESS STRATEGY ON TERAZO TILES FOR 58 NAM THANG TCI JOINT STOCK COMPANY IN 58 THE PERIOD 2011-2016 58 3.1 Developing objectives of Nam Thang TCI JSC 58 3.1.1 Mission and vision confirm of the company .58 3.1.2 Development objectives 59 3.1.3 Analyzing SWOT Matrix to making strategy on Terazo tiles of Nam Thang TCI JSC .60 3.1.4 Choosing developing strategy 61 3.1.5 Solutions to build development strategy for Terazo tiles of Nam Thang TCI JSC in the period 2011 – 2016 .63 CONCLUTION .67 REFERENCE 68 LIST OF ABBREVIATION AFTA ASEAN ASEM Asean Free Trade Area Association of Southeast Asian Nations Asia-Europe Meeting APEC Asia-Pacific Economic Cooperation CEO JSC R&D SWOT WTO Chief executive officer Joint Stock Company Research and development strengths, weaknesses, opportunities, threats World Trade Organization LIST OF FIGURES Figure 1.1: Procedures of determining strategy Figure 1.2: Model of competitive forces by Mr Porter Figure 1.3: Process of building EFE matrix Figure 1.4: Process of building IFE matrix Figure 2.1: Organization structure of the company Figure 2.2: Producing process Figure 2.3: The market share LIST OF TABLES Table 1.1: SWOT Analysis minimalist framework Table 1.2: Compare the characteristics of the general strategies Table 1.3: Quantitative matrix according to the GREAT criteria Table 2.1: The report of result on business activities Table 2.2: Revenue by Terazo Table 2.3 External Factor Evaluation matrix Table 2.4: The substitute products Table 2.5: The competitors Table 2.6: Ballance sheet 2009 – 6/2011 Table 2.7: Labor quality Table 2.8: Average income per labor Table 2.9: Internal Factor Evaluation matrix Table 2.10: SWOT analysis Table 3.1: GREAT matrix ACKNOWLEDGEMENT First of all, the Group No.4 - GaMBA01.M1009 would like to express our sincere thanks for the Master of Business Administration Program, the Affiliate Programs between Griggs University, USA and Center for Education Technology and Career Development, Vietnam University Hanoi for organize MBA course in Vietnam and facilitating our Capstone Project Report Secondly, we would like to express our sincere thanks to the Leaders and staffs of Nam Thang trade constructive investment Joint Stock Company, who have fully supported our team in providing valuable input information for this Capstone Project Report Last but not least, let our thanks go to our families whose encouragement has helped us complete the course without having any difficulties We have tried to complete the assignment in the best way using our best knowledge and ability However, the shortcomings are inevitable We wish to receive valuable comments from teachers and colleagues INTRODUCTION The title of research “Building development strategy for Terazo tiles of Nam Thang trade constructive investment Joint Stock Company in the period 2011-2016” The reason of research Vietnam has approached the market economy for over 20 years This duration is not too long as well as too short for Vietnamese enterprises to apply management methods of the market economy procedure Strategic management has been considered as one of the most useful business theories which can help enterprises to achieve successes in a long – term The way they are using these theories, however, should be re-considered in almost all organizations in Vietnam In 2002, with the approval of Hanoi Planning & Investment Department, Nam Thang trade constructive investment Joint Stock Company was established and started to build the most modern Terazo tiles in Vietnam by a technology chain from Italy All equipments of the factory are also controlled and checked by experts from FDT – Italy Through many years of developments, Terazo tiles - its main product - has achieved a certain position step by step in the market as well as in consumer’s mind In comparison with other products in the market, however, the awareness of Terazo tiles is not really clear Moreover, the company often encounters with the situation of lacking products for sales because the production capacity of its unique factory in Quoc Oai, Ha Tay cannot meet the increasing demand of customers In addition, there are more and more tiles products and the market is becoming so competitive It is clear that Terazo tiles is sort of clear and effective strategies, especially marketing strategy or financial strategy to stay stable in the material constructive industry This topic does not only apply knowledge of strategic management but also contributes significant practical recommendations for the development of Nam Thang trade constructive investment Joint Stock Company as well as Terazo brand Purposes of the research The research focused on following issues: - Fundamental theories of strategy and strategic management - Useful models to analyze the process of establishing and choosing strategy - The real situation in which Nam Thang trade constructive investment Joint Stock Company has been implementing its strategy for Terazo tiles - Analyze factors of the external and internal environment which affect on company’s strategy - Appropriate solutions to build the development strategy for Terazo brand of Nam Thang trade constructive investment Joint Stock Company Objective, scale and methodology - Objective and scale: The research focuses on current strategic management activities of Nam Thang trade constructive investment Joint Stock Company and provides some solutions for the period of 2011-2016 - Methodology: The research used two kinds of information sources: Primary and secondary information The secondary information came from various sources However, a major percentage of them were from reports about current business situations of Terazo tiles which were provided by Nam Thang trade constructive investment Joint Stock Company Besides, we were also gathered from many opened sources such as internet and books Structure of the research Introduction Chapter 1: Literature review of strategy and strategic management Chapter 2: Analyzing the situation business strategies on Terazo tiles of Nam Thang trade constructive investment jsc Chapter 3: Some solutions to build development strategy on Tarezo tiles of Nam Thang trade constructive investment jsc CHAPTER 1: LITERATURE REVIEW OF STRATEGY AND STRATEGIC MANAGEMENT 1.1 Fundamental definitions 1.1.1 Definition of strategy There are many different definitions on strategy, but the most popular definition is "Strategy is a series of complex actions to mobilize the resources of an organization to achieve a certain goal." – Text book of “Strategic Management”Global Advanced Master of Business Administration, Hanoi, 2010 We know that in all definitions of policy there is some word with different meaning According to Mr.Mintzberg, there is words (5P): Plan, Partern, Position, Perspective, Ploy Until now, Plan is an important part in definition of business strategy Alfred Chadler (Harvard University) thinks that “strategy is to determine long –term corporate targets, to select method or plan of implementation and distribution resources necessary for achieving that target” (Source: Johnson & Scholes- Exploring Corporate Strategy, 2009) There is a lot of such definitions, because strategy has a large concept with complicated meaning However, strategy can be recognized by certifying its character and by distinguishing strategy and tactics * By characters, strategy has main following contents: - Long-term missions that company wishes to achieve - Setting-up and selecting the solutions for achieving mission - Implementing and distributing resources for mission achievement Corporate business strategy is master action program to focus on mission achievement Strategy does not define exact method to achieve the mission, because this is the target of other supplemented programs Strategy makes only the frame of guidance on mind and action for corporate management leaders * By level, in any business corporate, strategy has some different levels, along whole the corporation (or some of corporations) to every employee who works in the corporation + Corporate strategy: is at corporate level to focus on master mission with whole corporate scope, satisfying expectations by owners of capital contribution + Business strategy: is in relation with how corporation can compete successfully in the market + Functional strategy – is strategy supported to corporate and business strategy achieving the mission based on recourses, procedures, personnel and other necessary skills + World-wide strategy (international business) – is a selection, facing to international business when corporate operates multiple business outside its border 1.1.2 Definition of strategic management Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives It involves the systematic identification of specifying the firm's objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm's objectives Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc., to achieve organizational goals It is generally the highest level of managerial activity, usually initiated by the board of directors and executed by the firm's Chief Executive Officer (CEO) and executive team Strategic management hopes to provide overall direction to the company has ties to the field of organization studies Strategic management includes these following specific steps:  Strategic planning  Strategic implement  Strategic checking and evaluation 1.1.3 Roles of strategic management Characteristics of business environment have a big affect to existence and development of company They can create new opportunities and challenges for corporation And the company which wants to exist has to find out a new management method, it is exactly “strategic management” - strategy is the basis of 10 ... STRATEGIES ON TERAZO TILES OF NAM THANG TRADE CONSTRUCTIVE INVESTMENT JSC 30 2.1 Introduction of Nam Thang trade constructive investment Joint Stock Company 30 2.1.1 History of development. .. Matrix to making strategy for Terazo tiles of Nam Thang TCI Joint Stock Company 56 CHAPTER 3: BUILD BUSINESS STRATEGY ON TERAZO TILES FOR 58 NAM THANG TCI JOINT STOCK COMPANY IN ... The title of research ? ?Building development strategy for Terazo tiles of Nam Thang trade constructive investment Joint Stock Company in the period 2011-2016” The reason of research Vietnam has