Strategic management CAPSTONE PROJECT REPORT “STRATEGIC DEVELOPMENT HERBAL MEDICINES OF TRAPHACO JOINT STOCK COMPANY GaMBA01 M0709 Strategic management GRIGSS UNIVERSITY GLOBAL ADVANCE MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT “STRATEGIC DEVELOPMENT HERBAL MEDICINES OF TRAPHACO JOINT STOCK COMPANY 2011-2015” Group No: Nguyen Thi Muoi Le Thanh Ha 3.Tran Dinh Dong 4.Tran Huong Giang Class: GaMBA01.M0709 HANOI, 2011 INDEX CHAPTER I: 1.1 The concept and the role of the business strategy to the enterprises: 1.1.1 Some concepts of business strategy: Figure 1.2: The process of planning 11 Figure 1.3: The process of planning business strategy 12 Figure 1.5: Macro environment 15 GaMBA01 M0709 Strategic management Board of directors and executive directors 20 Members of board of directors: 20 Table 2.1: Remarkable Achievements: 24 Table 2.2: Growth speed 2006-2010 26 Figure 2.1:EPS and Growth of revenue at Traphaco .26 Table 2.3: Products portfolio: 29 Figure 2.2: Revenue of consuming the pharmaceuticals and average .35 Figure 2.3: Traphaco's market share in Vietnam's pharmaceutical industry .38 Figure 2.4: Traphaco's market share in Vietnam's pharmaceutical industry .39 Figure 2-5 Model of value chain 44 Figure 2.6: Structure 45 Table 2.7: PRODUCTION CAPACITY OF THE MACHINE LINE.46 Figure 2.7:Revenuse structure by products 51 Figure 2.8: Cost price structure and the average gross profit of products 52 Table 2.9: Effective criteria 2006-2010 53 Table 2.10:Operation capacity 2006-2010 54 Table 2.11:Capital structure 2006-2010 55 Table 2.12: Solvency 2006-2010 55 Table 2.13: Profitability 2006-2010 55 Table 2.14: Analysis SWOT 58 Table 3.1:SWOT matrix model to determine the product development strategic applied at Traphaco 66 Table 3.2: Specific business plan of the herbal medicine to 2015 69 Figure 3.1:Structure of Gross Profit according to the product 69 c/ Distribution solution 73 - Build a professional distribution system applying the advanced management technology in the whole three regions: Northern, Central and Southern 73 List Figure and table Figure Figure 1.1:Three levels of strategy in the business Error: Reference source not found Figure 1.2: The process of planning .Error: Reference source not found Figure 1.3: The process of planning business strategy Error: Reference source not found GaMBA01 M0709 Strategic management Figure 1.4: Four blocks create competitive advantage Error: Reference source not found Figure 1.5: Macro environment Error: Reference source not found Figure 1.6: BCG matrix Error: Reference source not found Figure 1.7: SWOT Matrix Error: Reference source not found Figure 1.8: Space matrix Error: Reference source not found Figure 1.9: Basic stages of strategic administration.Error: Reference source not found Figure 2.1:EPS and Growth of revenue at Traphaco Error: Reference source not found Figure 2.2: Revenue of consuming the pharmaceuticals and average Error: Reference source not found Figure 2.3: Traphaco's market share in Vietnam's pharmaceutical industry Error: Reference source not found Figure 2.4: Traphaco's market share in Vietnam's pharmaceutical industry Error: Reference source not found Figure 2-5 Model of value chain Error: Reference source not found Figure 2.6: Structure Error: Reference source not found Figure 2.7:Revenuse structure by products Error: Reference source not found Figure 2.8: Cost price structure and the average gross profit of products.Error: Reference source not found Figure 2.9: BCG MATRIX Error: Reference source not found Figure 2.10: Space Matrix Error: Reference source not found Figure 3.1:Structure of Gross Profit according to the product Error: Reference source not found Table Table 2.1: Remarkable Achievements: Error: Reference source not found Table 2.2: Growth speed 2006-2010 Error: Reference source not found Table 2.3: Products portfolio: .Error: Reference source not found Table 2.4: Brands of expanded category Error: Reference source not found Table2.5: System of quality standard applied at TRAPHACO Error: Reference source not found Table 2.6: The product groups brand extension .Error: Reference source not found Table 2.9: Effective criteria 2006-2010 Error: Reference source not found Table 2.10:Operation capacity 2006-2010 Error: Reference source not found Table 2.11:Capital structure 2006-2010 Error: Reference source not found Table 2.12: Solvency 2006-2010 .Error: Reference source not found Table 2.13: Profitability 2006-2010 Error: Reference source not found Table 2.14: Analysic SWOT Error: Reference source not found Table 2.15: External Factors Environment (EFE) of Traphaco Company in comparison with competitors (in the Herbal medicine) Error: Reference source not found GaMBA01 M0709 Strategic management Table 2.16: Internal Factors Environment (IFE) of Traphaco Company in comparison with competitors (in the Herbal medicine)Error: Reference source not found Table 3.2: Specific business plan of the herbal medicine to 2015 Error: Reference source not found GaMBA01 M0709 Strategic management ACKNOWLEDGEMENTS To complete our Capstone Project Report, Group – Class M0709 would like to send our sincerely thanks to: - The professors, and the doctors of the master training program in Master of Business Administration (MBA), held by Griggs University collaborating with the ETC, who taught and guided us during the training process - The academic staff of the Griggs University who guided us in the process of doing the research; - The officers and staff of the ETC belonging to the Postgraduate Department, Hanoi National University; We also would like to send our sincerely thanks to Traphaco Corporation, the leader board of the Corporation, especially Ms Vu Thi Thuan, Chairman of Manager Board and CEO of Traphaco Corporation who enthusiastically supported us in the process of implementing the Capstone Project Report Group Members: Nguyen Thi Muoi Le Thanh Ha Tran Dinh Dong Tran Huong Giang GaMBA01 M0709 Strategic management OVERVIEW The 21st century marked the changing of the world in the fields of economy, society, politics, science and technology many new technologies has continuously launched, the regulations on controlling the quality are becoming tighter and tighter, the environment has many unexpected changes, the impact of the spread financial crisis causing severe consequences in many countries, Besides, the economy of the world is shifting to the trend of global integration, so the operations of the enterprises must be suited to the trend of the global economy, and the regional and international integration by searching and promoting comparative advantages to win in an increasingly fierce and intensive competition in the nation, international and global In that context, each enterprise has new opportunities to exploit; at the same time they have to face much risk should be prevented and limited Therefore, to adapt to business environments with high efficiency and long-term success requiring Vietnamese enterprises in general and the pharmaceutical corporations in particular must have a strategic thinking, which means to have a long-term vision to ensure the survival and development of the enterprises Besides, the enterprises trading in the pharmaceutical sector - a particular type of enterprise, doing business in the health and safety of the community must meet a series of GMP - WHO requirements (standard manufacturing medicine as recommended by the WHO) To overcome these challenges and take advantage of opportunities well require the enterprises in the pharmaceutical industry to choose the right orientation, to define an appropriate and timely business strategy Before the general reality of the pharmaceutical manufacturing enterprises in Vietnam, and with the desire to offer a highly practical business strategy helping to effectively take advantage of the opportunity to bring the pharmaceutical manufacturing industry of Vietnam to grow and expand to the world With the help of the staff in Traphaco Corporation, after a process of doing the research, gathering documents, studying and analyzing, the members of group decided to choose and the research topic: GaMBA01 M0709 Strategic management “STRATEGIC DEVELOPMENT HERBAL MEDICINES OF TRAPHACO JOINT STOCK COMPANY 2011-2015” Subject of the research: There currently are two major kinds of medicine on the market; those are herbal medicine and western medicine However, the proportion of people using the western medicine is much higher The lower proportion of herbal medicine does not means its treating effect is not as good as that of western medicine, but it mainly dues to the medicine using habits of the people, the orientation of the doctors to patients, (because most of doctors can enjoys the commissions from the patient's prescription from the foreign pharmaceutical corporations) Besides, the herbal medicines of the domestic pharmaceutical corporations are limited and lack diversity that does not meet the requirements of the patients According to the survey of WHO for seven groups of common western medicine used in Vietnam, based on the criteria of the type, the name of specific medicine, producer and supplier showed that medical prices in Vietnam are higher from to 40 times compared with the general prices in the world (according to online dantri on the 26th of June 2010) Besides, at present, the domestic medicine is only about 652/1.563 of active ingredients, and according to the World Health Organization (WHO), Vietnamese pharmaceutical industry is in development levels between 2.5 to (in the classification scale from to 4), that means it only produces some of certain generic medicines and exports some pharmaceuticals, the pharmaceutical enterprises mainly invest in manufacturing the common and simple pharmaceuticals only, with much overlapping, not pay attention to invest in production of specialty medicines, or special dosages, and generally the enterprises meeting the requirements of ASEAN GMP and GMP-WHO are low With orientation to create breakthrough in technology to apply the products from nature into the production creating higher value products with good effect from which discovers and exploits the medicinal resources to serve the protection of public health The Traphaco Corporation - with 39-year experience in the pharmaceutical GaMBA01 M0709 Strategic management sector has chosen the main business direction is to trade and manufacture the herbal medicines Through understanding the overview of the pharmaceutical industry of Vietnam, the achievements and limitations of the pharmaceutical corporations in general, and Traphaco Corporation in particular, the subject of this research is to focus on activities as well as strategies for developing the herbal medicine at Traphaco Corporation Scope and Objectives of the Research: This Capstone Project Report Analysis deeply the current status of Traphaco Corporation by positioning the enterprise with the theoretical model to identify weaknesses and strengths, opportunities and challenges of the enterprise from which help Traphaco Corporation not only have the strategic business plans, but also have solutions to implement those strategies the most effectively For this purpose, Group - Class M0709 would like to focus on building strategies for development of the herbal medicines in the period of 2011-2015 at Traphaco Corporation Through the matrix model of SWOT, our group confirms that the strategy of SO (the combination of strengths and opportunities) is the optimal strategy for the production of herbal medicines at Traphaco Corporation What is the objective of the strategy? What is the content of the strategy? What solutions are placed for the process of building the strategy? Will these issues be addressed in this Capstone Project Report? Research Methodology: To implement the topic: “STRATEGIC DEVELOPMENT HERBAL MEDICINES OF TRAPHACO JOINT STOCK COMPANY 2011-2015”, our group agreed to use the method of data survey, then based on theories studied to Analysis and offer comments, reviews, recommendations to build the strategies for development of the herbal medicines in the period of 2011-2015 at Traphaco Corporation General principle for making any decision, or in other words, to make a conclusion on any issue, we must be based on actual surveyed results combined with the academic theories GaMBA01 M0709 Strategic management This Capstone Project Report mainly uses method of collecting secondary data including: - Internal data of Traphaco Corporation; - Sources from books, internet; - Using some references, documents specialized in domestic and foreign Strategic Management In addition, our group also uses the method of statistical sample, survey, and analyzing the questionnaires Structure: Beside the introduction and the conclusion, the Capstone Project Report includes main chapters: Chapter I: General theory of business strategy Chapter II: The current business situation of Traphaco herbal medicine Chapter III: Strategy development herbal medicine of Traphaco Joint Stock Company 2011-2015 GaMBA01 M0709 Strategic management However, in order to maintain the top leading position in the field of producing and distributing the herbal medicine in the context of increasing competitive market, many potential threats, Traphaco needs to create more differentiated products in order to compete with the western medicines in the treatment of acute diseases Currently, the company has been successful for product of BOGANIC, Carmanus specialized in treating liver, Hoat Huyet Duong Nao to treat headaches, Vien Sang Mat for eye treatments, Duong Cot Hoan, Didicera for the arthritis, Ampelop for the stomach, These products have gained the favorite brand by the customers in Vietnam In order to achieve the fixed orientations, beside focussing on investmen in the stage of research and development (R & D) to create the distinctive products, Traphaco should also strengthen the marketing to promote the brand Strategy for the development of herbal medicine at Traphaco follows the direction of creating differentiated products with the superior features; maintaining and developing in the good relationships with customers, establishing and maintaining good and stable relationships with the partners in developing the distribution channels; building and developing the brand; becoming a learning organization which constantly renews and improves as the customer's request for its self-improvement and safe, efficient, sustainable development and integration into the world Strategy for the development of herbal medicine at Traphaco based on the following factors: - Increasing the investment in research, invention and innovation to create products with differentiated features; - Set up and maintain good relationships with customers; - Set up and maintain good relations with partners; - Optimize the organizational structure of the apparatus; implement the work of separation of powers and authorization strongly Clearly define the roles, functions and duties of each position; - Build a system of efficient operating procedures; - Have high-quality and well-trained human resources; 70 GaMBA01 M0709 Strategic management - Have a quality controlling system; - Maintain and hold fast to the famous brand of Vietnamese pharmaceutical 3.1.2.3 Solutions to implement the strategy One of the basic factors to implement the strategy successfully is to determine the factor to be the key for success, solutions to deploy the strategy as well as time and schedule of the strategy a/ Determine the target customer and the target market To determine target customers, Traphaco needs to segment the customer based on the customer’s behavior to the company's products, living area, age, gender, education, occupation (in which the income segment is the most appropriate because the income is the main factor governing the demand for products) Based on the income: According to the statistics of the General Department of Statistics, source from the World Bank and ABD, the distribution of income ratio of households in Vietnam in 2008 as follows: - Households with the incomes below the 2.5 million dong were 20% accounting for 5.5% of the total income of the society; - Households with the incomes from 2.5 to million dong were 20% accounting for 8.5% of total income of the society; - Households with the incomes from -14 million dong were 40% accounting for 39% of total income of the society; - Households with the incomes from 14 - 44 million dong was 19% accounting for 43% of total income of the society; - Households with the incomes of more than 24 million dong were 1% accounting for 4% of total income of the society; Thus, there are 20% of the population who are rich are, but nearly 50% of the total income of society Those with high incomes will concentrate mostly in the big cities, average age of 30 or over and they pay much attention to their health => the 71 GaMBA01 M0709 Strategic management need to use the kinds of medicine to enhance the health and to treat well is great => this is the customers Traphaco need to orient Based on the population structure by urban/rural: According to Vietnam General Department of Statistics in 2005, Vietnam ranked the 13 th in the world with 83,119,900 people of which 27% live in the cities, and 73% live in rural areas The rate of annual population was 1.18% The most populous cities in Vietnam are Ho Chi Minh City and Hanoi City Nearly all the cities across the country are in the trend of urbanization Thus, the population in these regions is growing rapidly Population living in the cities is not evenly distributed: the urban population accounted for 73% in which 72% in the big cities Culture and Society: with the specific characteristic of most Vietnamese population living in rural areas with low income and often having the habit of using herbal medicines, then the herbal medicines usually have reasonable prices attracting the attention of the customer Consumption trend: In the context of difficult economic times, the people will return to use domestic goods more so this is an opportunity for the domestic pharmaceutical companies in general, and Traphaco in particular to develop Currently, the pharmaceutical products in the country are not worse than imported products In short: Any enterprise also considers the customers to bring the greatest benefit is the target customer For Traphaco, the customers who are the rich, with high incomes living in the big cities at the age from 30 to 60 are its target customers and target market is Southern market b/ Price solution * Make the price equally to the competitors Apply the kinds of products without differentiating with that of competitors in efficiency and use value * Pricing discrimination 72 GaMBA01 M0709 Strategic management - For the different regions, for example, in the north, the company has a firm position, so the price can be made higher than that of the competitors, but the market in the Central and the South the price should be reasonable (at least equally to the competitors by raising the discount rate for resellers, system of hospitals, health centers) * High-price making Company should be applied when it has the different products from the competitors The company should follow the strategy of “the leader of the market” For example: kinds of high quality herbal medicines such as: Hoat huyet duong nao, Boganic, Ampelop, Livbinic, Didicera, Doc hoat tang ky sinh,… c/ Distribution solution The distribution system is one of the vital factors for the company The distribution system must satisfy two main requirements: a prosperous quantity and a punctual supplication So, for the development strategy to be reliable and effective, the company should improve these issues: - Build a professional distribution system applying the advanced management technology in the whole three regions: Northern, Central and Southern - Open additional branches in provinces with GSP standard storage system, especially in Southern market In addition to the current branches in Ho Chi Minh City, the company will construct and improve five more branches in Vinh Long, Dong Nai, Bình Thuan, Vung Tau and Can Tho * Complete the bulk sale system - Curently the company has wholesale centers such as A7 Ngọc Khánh, A8 Thành Công, 31 Láng Hạ To improve distribution quality the company should has encouragement policies for these centers * Complete the agents system Market expansion in Southern and Central regions as well as the construction of headoffice and storehouses in Ho Chi Minh city will create the advantage for TRAPHACO in trademark broadcast and in supplying and distributing products in these markets Currently the sale in the Southern market only accounts for 20% total 73 GaMBA01 M0709 Strategic management sale monthly of TRAPHACO Through market survey, the customers in Southern region were considered very potential for the business of the company The Company is planning the overall plan to make this sale reach 50% in density For the agent system, the company needs to build a system stretching over the whole nation and has clear punishments and rewards to supervise and manage the operation of the agents However the decisions on rights and responsiblities should not be too strict to have better result d/ Marketing and Trademark solution For the marketing mix activities -Build the trademark of TRAPHACO medicine in Vietnam market by planning the Marketing mix strategy which focuses on broadcasting about TRAPHACO's productivity and quality of products -Plan a favorable method of export For herbal medicines: Study and select the potential market to register herbal medicines under the form of functional foods to avoid the medicine barrier For western medicine products: export to ASEAN countries, especially in the current situation when the ASEAN countries are executing the integration of pharmaceutical standards and registration Using the "adjustment product" strategy in export marketing strategy: TRAPHACO needs to study specifically about the foreign market's productivity, business environment, social cultural political environment and customers' tastes to adjust the products to suit the different markets; then plan the suitable general marketing strategy for each country After that the company can execute marketing activities for experience on market expansion For the Southern market - Strengthen with priority the investment on broadcast activities of products and trademark from 3% to 5% for the Southern market - Plan the customer policies suitable to the development of herbal medicine for intermediate customers such as hostpitals and pharmacies (sale promoting policy, commission policy ) - Open customer club in Southern provinces 74 GaMBA01 M0709 Strategic management - Strengthen the customer service systems in stores and display more herbal medicament products - Punctual delivery - Increase the investment on sale expense from 10% to 15% of the regional sale The trademark is a valuable asset of the company which is hard to build but easy to ruin This is because the trademark carries the reputation and commitment of the company toward customers, is the summarized experience of customers with the company's products Building the trademark means creating a good image of the company in the mind of the customers For the products relating to customer health care, it is always necessary to make the customers feel safe when using those products So the package stage must be done well Traphaco should create a forum for customers for in time feedback to take the customers as the centre and always quickly understand the customers' tastes and demands Product and Trademark broadcast As the herbal medicaments are the products in OTC group, they are allowed to be advertised in public media This is also the advantage of Traphaco's product development strategy *Strengthen community advertising to bring information to every customer • Television: Broadcast television advertisements on National channel, in radio programs of Voice of Vietnam, in big music events, in weekend movies, in football match, sport tournaments with the appearance of Vietnam national sport teams • Newspaper: Advertise on Youth, Teenage, Saigon Liberation, Saigon economy time, Vietnam economy time • Internet: Place the logo and the link to the website of the company on www.vnexpress.net, www.tuoitre.com.vn, www.thanhnien.com.vn *Use big logo to attract the attention of the customers *Organize free drug-using consultant events *Organize sales promoting activities when releasing the new products 75 GaMBA01 M0709 Strategic management *Send product samples to hospitals and pharmacies to introduce *Build a hot line phone *Build a specialized marketing team e/ Product policies (The company needs to:) -Develop new drug lists applying new dosage technologies -Plan strategies to take advantage in manufacturing the products with materials which are no longer under exclusive protection -Strengthen the research of cholesterol reducing medicine, anti-cancer and continue investing in expanding the research on groups which have increasing demand -Account the investment cost in each research and development project to have adjustment in time and increase investment to suit the environment and business goals -Invest in the research on natural products which are the strengths of Vietnamese companies -Cooperate with Pharmaceutical institutions and universities in clinical experiments to have scientific proofs for the high valuable products such as: Multiflorous knootweed, parasite nursing recipe, marisca treatment recipe SITAR -Step by step study to improve the quality of herbal medicament products, research and standardize input material and construct the clinical test for herbal medicines These are the key to helps herbal medicine products compete for higher market share in both domestic and foreign markets f/ The company's organization management Follow the plans of construction and improvement of the company's factories, ensuring that the company can soon release the herbal medicines in the international market Need a separate department specialized in foreign language and international business for studying the foreign markets and plan the strategies and processes of foreign market development (the international marketing department) For the cooperation and affiliation: Find opportunities to transfer technology 76 GaMBA01 M0709 Strategic management and copyrights with the products which the company is unable to research and manufacture Follow the basic steps of cooperation with foreign institution Increase staff's grade by sending to study in developed countries In Southern market: - Need to build standardized management system for each branch under the policy of the company with clear work assignment Plan the strategy and process of recruitment for development quality The company expects to recruit 200 more personnel for the Southern market As the business operation network is expanded, the company need to build a new organization structure to ensure the operation and supervision g/ Technology - Research and development: The rapid development of achievements in science, technology and economy of the world has changed dramatically the earth and the environment New diseases appeared To be able to produce the medicines for those diseases, the company has to invest in new product research and development activities, especially for the natural medicines and redirect the research and development activities into a new direction of discovering new advanced medicines Invest in advanced technology production line satisfying the technical requirements of WHO To boost investment in research into the field of biotechnology applications and regional planning medicinal plant h/ Facilities: Enhance the production capacity by investing to replace the old equipments and build synchronyzed equipment sets Improve and upgrade the new factories to reach GMP standard Increase investment in fix assets in Southern region like buying land for head office construction, building GSP standard pharmaceutical storehouses Build the standardized storage system satisfying the demand for expansion Check the operation process guaranteeing the effective application of LEAN To be active in production Traphaco needs to construct and develop the company's own domestic material source 3.1.2.4 Deploying route 77 GaMBA01 M0709 Strategic management a/ The plan of deployment The deployment of a new business strategy needs a stage-clear route with the following specific issues: The stage of 2011 – 2012: is the stage which creates the foundation and momentum for the following stages In this stage, Traphaco needs to focus on the systematic construction of distribution networks in the Central and Southern regions Pay attention to the investment in the new herbal medicine research and development for the breakthrough in technology, training and development, specifically are: -Strategy to develop new dosages: research, apply and produce new dosages with TRAPHACO's production lines -Strategy to modernize and standardize: by modernizing the production lines, the company will advance in materials, herbal medicine dosages and discover new herbal materials for new medicine -Strategy to develop demanded products: the research and development of western medicine and herbal medicines in Vietnam medicine encyclopedia and Essential drug list to optimize the maximum performance of the company's facilities and join the strategy to supply the national demand for medicines -Strategy for difference development and leading: Focus in research and development of distinguished and leading products * For the Southern Market -Build and complete the facilities to start operation and make use of the branches in Southern market -Recruit and train the management system, pharmaceutical processors, sale staff with high grade and specialized for the branches in Southern provinces -Implement transfering the business model according to the new strategy Increase higher management officers in regions, build the customer relationship management systems, manufacture new products, invest new facilities and equipments The stage of 2012 – 2013: After successfully testing the new products, the company will start mass production and organize PR and distribution activities New 78 GaMBA01 M0709 Strategic management product distribution policies will be applied for the key products to promote the consumption reaching the grow criteria The stage of 2014 – 2015: Maintain the grow speed of ket herbal medicines, and at the same time develop new products on the markets both in depth and width b/ Necessary activities in the deployment - Organize meetings to get feedback on the new organization model from management officers - Analysis the ideas, consider and make decision - Contact management positions when there are changes in organizational personnel - Bulletin activities Every change affects the mind of the influenced target., thus the bulletin activities are important and necessary for the whole staffs to understand the spirit of changing Bulletin of the change in the model of business strategy will come with the scheduled deployment plan The bulletin contents are • The reason why it is necessary to change the model of business strategy • Jobs to be done when changing into the new model of business strategy • Issues encountered when we implement the change • Declare that the change is necessary and compulsory so that all the employees are required to follow • In cases with changes in trademark identification, an event organizing company should be hired to organize the change and inform on the public media 3.2 Recomendation 3.2.1 For the Traphaco Corp To succeed in the strategy of herbal medicine development in the period of 2010-2015 Group offer the following recommendations: The company needs to professionalize the enterprise operation With the growth speed of consumption sale of herbal medicine products of the whole company in general and of the Southern market in particular, the company needs to change the organization structure to suit the situation, rearrange personnel to avoid wasting labor In addition, the company should strengthen the training of staff to 79 GaMBA01 M0709 Strategic management meet the new technology process A detailed description of work for each department is necessary Build a clear wage policy with specific and fair punisment and reward systems, with separate reward system for each department to optimize creativity and new ideas Apply the ISO 9000 and ISO 1400 management system in managing, supervising and cooperating among departments for better planning Plan strategy to supply material according to crops to suit the production plans, avoiding fragmentation or leftover to get rid of cost wasting Purchase new synchornized equipments in production lines (for example: purchase the same size and type of frames ) to save materials and time of production Rebuild the new correct operating process to reduce the percentage of spoilage and waste of materials The company needs to deploy, expand and implement the project for clean herbal crops as soon as possible Establish the project department for the deployment of product development strategy in the period of 2011-2015 and has constant supervision, management and assessment to adjust the operation to suit the strategy so that the strategy succeed beautifully 3.2.2 For the Vietnam Pharmacy Management Department -In the intergration process, the commitments for intellectual property protection are greatly respected So that the Management Department needs to have particular opinions or suggests clear handling systems when there are cases with mimics violating the intellectual property rights All these are for a fair competition environment of the domestic market -The Vietnam Pharmacy Management Department also need to design and publish the plan of economy integration of the pharmacy industry so that the domestic pharmaceutical companies can be active in designing their own plans - The Vietnam Pharmacy Management Department needs to study and offer legal and technical "barriers" which "fit" the international regulations and commitments to reduce competitive pressure from abroad to Vietnam companies, 80 GaMBA01 M0709 Strategic management creating opportunities for Vietnam pharmaceutical companies to has the conditions for preparation and adaptation CONCLUSION In the economy, the pharmaceutical industry is assessed as an industry with high potential and growth speed, thus although the barriers to entry are high but the opportunities to develop high profit of the companies still are significant, there are many companies want to enter this industry Currently, the country has about 180 chemical medicine manufacturing companies, 84 herbal medicine manufacturing companies, 89 medicine export and import businesses, 900 medicine distribution centers and 57,000 retail stores Domestic and foreign phamarceutical companies have been investing on their products in the market, making the competition among products fiercer and fiercer With the responsibility of a member of Traphaco Corp, we wish the company can stand firm and maintain the position as the leading herbal medicine manufacturer of Vietnam in the increasingly fierce competition condition of the market And with the company's target to create high quality herbal medicine products which can compete with the western medicine products especially those imported for community service, Group 5-M0709 realized that Traphaco needs to a well-designed business 81 GaMBA01 M0709 Strategic management strategy in the period from 2011 to 2015 and proposed the topic “Strategy to develop herbal medicament products in the period 2011-2015 for Traphaco Corp.” Upon competion of this topic we have combined the knowledge learnt in the MBA of International Business training programs of Griggs University with the practical study in Traphaco Corp In the process of topic study, it is impossible to avoid all the limits and mistakes With the learning spirit we expect to received the feedback from lecturers from the academic council and other classmates for a more complete Capstone Project Report Sincerely thanks, Hanoi, February 20th, 2011 REFERENCES Strategic Management - Associate Professor-Dr Le The Gioi, Dr Nguyen Thanh Liem, Ma Tran Huu Hai - Statistics Publisher (2007) The "Strategic Management" textbook of National Economic University - Associate Professor-Dr Le Van Tam, Associate Professor-Dr.Nguyen Thanh Do, Dr Phan Dang Tuat, Ma Vu Tri Dung, Ma Ngo Kim Thanh, Ma Pham Thi Nhuan, Ma Dang Vu Dai, Lecturer Truong Duc Luc - Statistics Publisher 2000 Reference materials from : www.Traphaco.com.vn; www.tinkinhte.com; www.quantri.com.vn; www.strategy- business.com; www.mckinseyquarterly.com "Strategic Management" study materials from Griggs University Micheal Porter, (1996), “Competitive Strategy”, Science & Technology Publisher 82 GaMBA01 M0709 Strategic management 6.“Strategic Management”PGS.TS Lª ThÕ Giíi, TS NguyÔn Thanh Liªm, ThS TrÇn H÷u H¶i-Statistical Publishing house 2009 83 GaMBA01 M0709 Strategic management 84 ... and has high growing ability so that it has opportunity to grow well and has stable high profitability Group 2: The enterprise has potential and good competitive ability The solution for the enterprise... BUSINEES SITUATION OF TRAPHACO HERBAL MEDICINE 2.1 Overview of Traphaco joint stock Company: 2.1.1 General introduction about the company � Name: Traphaco Company � English name: Traphaco Joint Stock... Ms Nguyen Thi Mui: Deputy of general director 3- Mr Nguyen Huy Van: Deputy of general director 4- Mr Tran Tuc Ma: Deputy of general director 5- Ms Hoang Thi Ruoc: Deputy of general director 6-