UNIVERSITEÙ OUVERTE DE HCMV UNIVERSITEÙ LIBRE DE BRUXELLES ECOLE DE COMMERCE SOLVAY MMVCFB PROGRAMME DE MAITRISE EN MANAGEMENT VIETNAM-COMMUNAUTE FRANCAISE DE BELGIQUE TRAN VINH QUANG BUILDING THE DEVELOPMENT STRATEGY FOR THE PERIOD 2007-2010 FOR VIETNAM SCHREÙDER Co., Ltd. MASTER DEGREE THESIS In MANAGEMENT MMVCFB6 HO CHI MINH CITY YEAR 2007 UNIVERSITEÙ OUVERTE DE HCMV UNIVERSITEÙ LIBRE DE BRUXELLES ECOLE DE COMMERCE SOLVAY MMVCFB PROGRAMME DE MAITRISE EN MANAGEMENT VIETNAM-COMMUNAUTE FRANCAISE DE BELGIQUE TRAN VINH QUANG BUILDING THE DEVELOPMENT STRATEGY FOR THE PERIOD 2007-2010 for VIETNAM SCHREÙDER Co., Ltd. MASTER DEGREE THESIS in MANAGEMENT MMVCFB6 GUIDING PROFESSOR: Prof. Dr. HO DUC HUNG HO CHI MINH CITY YEAR 2007 ABSTRACT The lighting industry is in a growth stage in Vietnam. The market is attributed as small but promising of high demand in the future. The situation of competition among lighting companies, the growth trend and the failure or the success of the companies requires domestic lighting companies to have suitable development strategy. Vietnam Schreùder company is one of the most successful companies in terms of high market share. It has assembled lighting products of various kinds in which public and industrial lighting is the core product of the company. Those products account for 45 % of the market share. However, in the competitive environment, Vietnam Schreùder company has faced various difficulties especially the lack of the vision in the long term. The objective of the study will therefore design a development strategy for the company in the long term. Based on the examination and analysis of the external and internal environment, the study will determine strengths, weaknesses, opportunities and threats (SWOT). Derived from the SWOT and based on the general process of strategy formulation, the study will develop the most appropriate development strategy for the company. Finally some recommendations are suggested for the company to be able to implement the proposed strategy. COMMENTS FROM GUIDANCE COUNSELOR TOPIC: BUILDING THE DEVELOPMENT STRATEGIES FOR THE PERIOD 2007-2010 FOR VIETNAM SCHREÙDER PERFORMED BY: TRAN VINH QUANG GUIDED BY: Prof. , Dr. HO DUC HUNG      1. The topic that the author selects for his MBA thesis obviously has both meanings of current events and values of theoretical research. 2. The structure of the thesis is logical and compatible with the topic title already specified. Meanwhile this also targets at answering the three majors objectives that mentioned in the Chapter 1 (page 02). So based on these objectives, I think the thesis has provided the main fundamental solutions for these posed objectives. 3. The literature review of the Chapter 2 provides a theoretical framework of the thesis, especially to point out the process of the strategic management and standard tools for strategies formulations and selections. This theoretical background is rather sufficiently for the research of the thesis. 4. The Chapter 3 and 4 provide and overview of the external and internal environment analysis. The analysis is rather of high value. But it will be more convincing if the author uses the quantitative method to analyse SWOT model. 5. The writer’s efforts have been revealed distinctly in the strategy evaluation and solution. So I highly appreciate his attempts. 6. I am in agreement with the author’s conclusion and recommendations The thesis, on the whole, is eligible for the MBA degree. As the guidance counselor, I evaluate the quality of this thesis at the level: Great Distinction with mark of 17/20 Ho Chi Minh city, 25 February 2007 Prof., Dr. Ho Duc Hung Guidance Counselor iii Development strategy for Vietnam Schreùder for the period 2007-2010 Table of Contents TABLE OF CONTENTS Chapter Title Page Acknowledgement i Abstract ii Table of Contents iii List of Figures vi List of Tables viii List of Abbreviations x 1. INTRODUCTION 1.1. Rationale of the Research 01 1.2. Statement of the Problem 02 1.3. Objectives of the Research 02 1.4. Research Methodology 02 1.5. Scope and Limitations of the Research 04 1.6. Structure of the Research 04 2. LITERATURE REVIEW 2.1. Strategy and strategic management perspectives 06 2.1.1. Definition of strategy 06 2.1.2. Definition of strategic management 07 2.2. Process of the strategic management and standard tools for strategies formulation and selections 08 2.2.1. Visions and Missions 11 2.2.2. External Analysis and Michael Porter’s five forces model 11 2.2.3. Internal Analysis and SWOTanalysis 17 2.2.4. Strategy formulation and selection 18 2.2.5. Strategy Implementation 19 2.2.6. Hierarchy of Strategy 20 2.3. Selecting development strategies 21 3. EXTERNAL ENVIRONMENT ANALYSIS iv Development strategy for Vietnam Schreùder for the period 2007-2010 Table of Contents 3.1. Macro-environment analysis 26 3.1.1. Political and legal factors 26 3.1.2. Economic factors 28 3.1.3. Social Factors 35 3.1.4. Technology factors 36 3.2. Current situation of Vietnam lighting industry 37 3.3. Orientations in development of the Vietnam lighting industry to the year of 2010 45 3.4. Industry environment analysis 48 3.4.1. Potential competitors 49 3.4.2. Rivalry among established companies 50 3.4.3. Bargaining power of buyers 57 3.4.4. Bargaining power of suppliers 58 3.4.5. Substitute products 59 3.5. Summaries of opportunities and threats for Vietnam Schreùder 60 4. INTERNAL ENVIRONMENT ANALYSIS 4.1. Company Profile 63 4.1.1. History of the Vietnam Schreùder Company 63 4.1.2. Organisation structure 65 4.1.3. Human Resources 67 4.2. Sales and Market Analysis 68 4.2.1. Sales performance 68 4.2.2. Market segmentation and targeted market 71 4.2.3. Products positioning 77 4.2.4. Pricing and Promotion 77 4.2.5. Distribution 79 4.2.6. Advantages and disadvantages & difficulties 79 4.3. Assembling capacity analysis 8 1 4.3.1. Assembling process, quality control and technology83 4.3.2. Advantages and disadvantages & difficulties 83 4.4. Profitability, financial performance and financial resources 84 v Development strategy for Vietnam Schreùder for the period 2007-2010 Table of Contents 4.5. Management Information System 86 4.6 Summary of Strengths and Weakness for Vietnam Schreùder 86 5. DEVELOPING STRATEGIES FOR VIETNAM SCHREÙDER 5.1. Company Visions and Missions 88 5.1.1. Visions 88 5.1.2. Missions 88 5.2. SWOT analysis 89 5.2.1. Summary of strategic situation for the company 89 5.2.2. SWOT strategies 92 5.3. Generating Development Strategies 94 5.3.1. Cost leadership strategy 94 5.3.2. Differentiation strategy 96 5.3.3. Focus strategy 97 5.4. Strategy evaluation and selection 98 5.4.1. Cost leadership strategy 98 5.4.2. Differentiation strategy 99 5.4.3. Focus strategy 100 5.5. Some specific solutions proposed for development strategy for Vietnam Schreùder 100 6. CONCLUSION AND RECOMMENDATIONS 6.1. Conclusions 106 6.2. Recommendations 108 6.2.1. What could be done further 110 6.2.2. Critical success factors 110 REFERENCES xi APPENDICES xi vi Development strategy for Vietnam Schreùder for the period 2007-2010 List of Tables and Figures LIST OF FIGURES Figure Page Figure 1.1 Research Methodology 03 Figure 2.1 The Determinants of Company Performance 06 Figure 2.2 The Determinants of Process of Strategic Management 08 Figure 2.3 Strategic management process 09 Figure 2.4 The Main Components of the Strategic Planning Process 10 Figure 2.5 Components of External Environment 11 Figure 2.6 Requirements for Competitive Success 12 Figure 2.7 SWOT Matrix 19 Figure 2.8 Hierarchy of Strategy 21 Figure 2.9 Development strategies 23 Figure 3.1 GDP during the period of 1995-2006 (f) 29 Figure 3.2 GDP growth rate in the period of 1995-2006 (f) 29 Figure 3.3 Vietnam: Headline Inflation 1999-2006 32 Figure 3.4 Emerging Asia: Heading Inflation 2003-2006 32 Figure 3.5 Managerial structure of lighting system in Vietnam 39 Figure 3.6 The mapping of competitors 54 Figure 3.7 The nationwide market share of lighting products 57 Figure 3.8 The Five forces effected the lighting industry 60 Figure 4.1 Vietnam Schreùder organizational structure 65 Figure 4.2 Sales over years from Year 2000-Chart 70 vii Development strategy for Vietnam Schreùder for the period 2007-2010 List of Tables and Figures Figure 4.3 Sales growth rate from Year 2000-Chart 70 Figure 4.4 Markets map for Vietnam Schreùder 75 Figure 4.5 Assembling capacity from 2003-2006 82 Figure 4.6 Productivity factors from 2003-2006 82 Figure 4.7 Resources analysis from 2000-2006 86       [...]... Development strategy for Vietnam Schreùder for the period 2007- 2010 Chapter 1-Introduction - Page 2 - 1.2 Problem statement Based on the examination and analysis the external and internal environment, the study will formulate the development strategy for the Vietnam Schreùder Company in the long term 1.3 Objectives of research The study is an attempt to establish the development strategy for the Vietnam Schreùder... and media as well The framework of the study can be illustrated by Figure 1.1 Figure 1.1 Research Methodology Development strategy for Vietnam Schreùder for the period 2007- 2010 Chapter 1-Introduction - Page 4 - 1.5 Scope and limitations of the study The study is about the Vietnam Schreùder Company It aims at the formulation of the development strategy for the company in the long term The research study... and finance The goal is to identify strengths and weaknesses of the company to depict its current competitive situation Chapter 5 presents the design, evaluation and selection of the development strategy for the Vietnam Schreùder company Finally Chapter 6 includes recommendations on the implementation of the proposed strategy Development strategy for Vietnam Schreùder for the period 2007- 2010 Chapter... List of Tables and Figures xi WTO World Trade Organisation Development strategy for Vietnam Schreùder for the period 2007- 2010 List of Tables and Figures CHAPTER 1 INTRODUCTION Development strategy for Vietnam Schreùder for the period 2007- 2010 Chapter 1-Introduction - Page 1 - CHAPTER 1 INTRODUCTION 1.1 Rationale of the study One of the highlighted trends that characterize today’s business environment... including the rationale of the study, and statement, the objectives, the scope and limitations as well as the methodology and framework of the study Chapter 2 summarizes the literature review and contains the fundamental ideas on strategy, strategic management, and strategy formulation process as well as the Porter Model for analyzing industry Development strategy for Vietnam Schreùder for the period 2007- 2010. .. profit and loss from 2000-2006 84 Table 4.9 Performance analysis 85 Development strategy for Vietnam Schreùder for the period 2007- 2010 List of Tables and Figures ix Table 4.10 Combined balance sheets 85 Table 5.1 SWOT matrix for Vietnam Schreùder 92 Table 5.2 Summaries of strategy valuation 100 Development strategy for Vietnam Schreùder for the period 2007- 2010 List of Tables and Figures x LIST OF ABBREVIATIONS... profile • To formulate the development strategy for the Vietnam Schreder Company in the long term 1.4 Research Methodology The study begins with the literature review which concerns the strategic management process, particularly the process of strategy formulation It refers to the concepts and principles of the Porter Model to analyze the competitive environment of the industry Data for the study are collected... companies The fast growth of lighting industry, the desire to be leading company and the fact of tough competition lead to the need to establish a development strategy In fact, there is still a gap in strategy research for lighting companies like Vietnam Schreùder Hence, this research could effectively dedicate to how to develop a strategy for a particular lighting company – Vietnam Schreùder Development strategy. .. must be appropriate for its resources, circumstances, and objectives The process involves matching the companies' strategic advantages to the business environment the organization faces One objective of an overall Development strategy for Vietnam Schreder for the period 2007- 2010 Chapter 2-Literature review - Page 8 - corporate strategy is to put the organization into a position to carry out its mission... operations” (Boston: Houghton – Mifflin, 1992) The planning theme remains an important component Development strategy for Vietnam Schreder for the period 2007- 2010 Chapter 2-Literature review - Page 7 - of most management definitions of strategy Chandler defined strategy as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation . Bank xi Development strategy for Vietnam Schreùder for the period 2007- 2010 List of Tables and Figures WTO World Trade Organisation       Development strategy for Vietnam Schreùder for the period 2007- 2010. strategy for the company. Finally some recommendations are suggested for the company to be able to implement the proposed strategy. COMMENTS FROM GUIDANCE COUNSELOR TOPIC: BUILDING THE DEVELOPMENT. EN MANAGEMENT VIETNAM- COMMUNAUTE FRANCAISE DE BELGIQUE TRAN VINH QUANG BUILDING THE DEVELOPMENT STRATEGY FOR THE PERIOD 2007- 2010 for VIETNAM SCHREÙDER Co. , Ltd. MASTER DEGREE THESIS in MANAGEMENT MMVCFB6 GUIDING