GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONS PROJECT REPORT CONSTRUCTING BUSINESS DEVELOPMENT STRATEGY BY 2015 AND VISION BY 2020 FOR HA NOI BEER – ALCOHOL – BEVERAGE JOINT STOCK CORPORATION Group Nguyen Van Thao (Leader) Bui Anh Linh Nguyen The Than Nguyen Thi Thanh Nga NGHE AN 2012 TABLE OF CONTENTS Contens Page CHAPTER I: THEORY AND REALITY FOR CONSTRUCTING STRATEGY OF HABECO 1.1 Business strategy of the enterprise 1.1.1 Definition of business strategy 1.1.2 The role of business strategy 10 1.1.3 Types of business strategy 12 1.2 Process of strategy construction 16 1.2.1 Defining mission and targets 17 1.2.2 Analysis of internal and external environment 18 1.2.3 Techniques of analysis and strategy selection 20 CHAPTER II: GENERAL INTRODUCTION AND BUSINESS 27 ENVIRONMENTAL ANALYSIS OF HABECO 2.1 General introduction of the corporation 27 2.1.1 Establishment process, function, duty and organizational structure 27 2.1.2 Reality and results of business and production within the period of 29 2009-2011 2.2 Analysis of business environmental factors impacting on the activities 30 of the corporation 2.2.1 Analysis of external environment 30 2.3.2 Analysis of sector environment and competition 36 2.3.3 Analysis of internal environment 45 2.3.4 Selection of business strategy 54 2.3.4.1 External factor evaluation matrix 53 2.3.4.2 Internal factor evaluation matrix 55 CHAPTER III: BUSINESS STRATEGY FOR HABECO BY 2015 AND VISION 58 BY 2020 3.1 Strategic plan selection 58 3.1.1 IE matrix 58 3.1 Analysis of SWOT matrix 59 3.2 Selection of strategic solutions for HABECO within the period of 2012- 61 2015 3.2.1 Mission declaration of HABECO 61 3.2.2 Concrete targets 63 3.2.3 Selection of strategic methods for HABECO by 2015 and vision by 2020 64 3.3 Implementation plan 79 3.4 Recommendations 80 3.4.1 With regard to National Assembly and the Government 80 3.4.2 With regard to ministry of commerce and industry 80 3.4.3 With regard to Vietnamese beer, alcohol and beverage association 81 LIST OF ABBREVIATION Abbreviation HABECO SABECO VBL VBA VCCI English Vietnamese Ha noi beer, alcohol, beverage joint Tổng công ty Bia- rượu- Nước stock corporation giải khát Hà Nội Sai Gon beer, alcohol, beverage Tổng công ty Bia- rượu- Nước joint stock corporation giải khát Sài Gịn Vietnam Brewery Limited Cơng ty trách nhiệm hữu hạn Nhà máy bia Việt Nam Association of Beer - Alcohol - Hiệp hội Bia – Rượu – NGK Beverage Vietnam Việt Nam Vietnam Chamber of Commerce Phòng thương mại công and Industry nghiệp Việt Nam LIST OF FIGURES Contens Page Figure 1.1 Duty of strategic management 12 Figure 1.2 Process of constructing strategy of the enterprise 17 Figure 1.3 External environment 19 Figure 1.4: Importance Mark in IE Matrix 23 Figure 1.5 SWOT matrix 26 Figure 2.1 Beer consumption level per capita in Viet Nam 35 Figure 2.2 Vietnamese beer quantity from 2005 to 2011 37 Figure 2.3 Market share in 2011 of beers base on geographical location 38 Figure 2.4 Growth rate of quantity of beer producers from 2008 to 2011 39 Figure 2.5 Structure of Vietnamese beer market 40 Figure 2.6 Five competitive force model of Michael Porter for beer sector 45 Figure 3.1 IE matrix 59 LIST OF TABLES Contens Page Table 1.1 External factors evaluation matrix 21 Table 1.2 Synthesis table of internal factors 22 Table 2.1 Budget payment of the whole sector in 2011 31 Table 2.2 Prediction the consumption of beer, wine within the allowed age 34 (15+) in Viet Nam Table 2.3 Some financial norms of HABECO (2009 – 2011) 47 Table 2.4 Export results in 2010 and 2011 50 Table 2.5: Competitive advantages of three biggest beer producers in Viet Nam 52 Table 2.6: Comparison with competitive opponents 53 Table 2.7: External factors evaluation matrix 54 Table 2.8: IFE matrix 56 Table 3.1 SWOT matrix 64 Table 3.2 Concrete targets of growth rate by 2015 and 2020 69 Table 3.3 Export plan by 2012 72 PREFACE The need of the topic study Achievement of the twentieth century has marked a new development step of the industrial production which bring the global economy to a high development step Coping with such strong growth rate, on the half decade of 21st century, a series of big enterprises in the world have declared bankruptcy especially since 2008 with the collapse of American property market and banks and currently public debt in Europe to deeply impact on global economy together with political instability in some nations In Viet Nam, integration into WTO and globalization have deep influence on business activities of each enterprise And how to make an enterprise maintain stable business activities and growth rate in the strong competitive market impacted by many external factors that are hard to be controlled with a defined source and how to maintain stability and development in long term? We want to apply the learned knowledge to analyze, evaluate influences on business activities of an enterprise including objective and subjective factors, external and internal factors of the enterprise, then define opportunities, threats, strengths and weaknesses of enterprise (HABECO) HABECO is one of the state-owned enterprises with strong transferring when it transfers from state-ownership to the form of joint stock corporation in 2008; its average growth rate in recent years is 20%, average revenue annually increases 30%, state-owned budget payment annually increases 20%, average profit annually increases 12% HABECO is the enterprise with the distinctive product of Ha Noi city named Ha Noi beer; in the economic integration, deep globalization then to maintain stable business activities and sustainable development then enterprise must have long term strategy to cope with external influences and strong economic competition Via learned knowledge and the time of research and approaching business reality of HABECO, we have applied from the theories to reality to create the business strategies with some detailed proposals for HABECO to be in ready position to stabilize growth rate in the long term to become one of the leading enterprises of beverage in Viet Nam and the region The targets and application of the topic The main purpose of this research is to select a strategy for the long term development of HABECO based on environmental analysis and evaluation, internal and external prospects of the sector of beer, alcohol and beverage by 2015 and 2020 The targets of research are as follows:  Reconsider the best model of development strategy of beer, alcohol, beverage in the nation  Define strengths, weaknesses, opportunities and threats of HABECO  Evaluate present situation of HABECO to develop competitive program  Construct business strategy by 2015 and 2020 for HABECO Study object and scope: This report will study the business strategy of HABECO which is one of the three leading enterprises of the sector of manufacturing beer - alcohol - beverage of Viet Nam The study scope of this topic includes activities of production, trading and external environmental factors impacting on the activities of the company This topic is studied and analyzed within working weeks (05/08/2012 – 19/09/2012) The data in the report has been collected since 2006 Analyze and evaluate current business strategy of HABECO; propose ideas and solutions to improve business strategy of HABECO within the period of 20122015 an strategic vision by 2020 Study methods: - Methods of approaching: the report has used the approaching methods such as particular approaching method; historic approaching method, qualitative and quantitative approaching methods - The method of data analysis and processing: the report has used the methods of statistical description, analysis, synthesis when evaluating business results of HABECO; EFE matrix, IFE matrix, SWOT matrix, IE matrix - Information sources: the report has use secondary information from papers, books, internet and reports of HABECO, commercial and industrial ministry Structure of the report This report includes chapters Preface Chapter 1: Theory and reality of constructing strategy for HABECO Chapter 2: general introduction and analysis of business environment of HABECO Chapter 3: selection of development strategy for HABECO by 2015 and vision by 2020 Recommendations and conclusions CHAPTER THEORY AND REALITY OF STRATEGY CONSTRUCTION FOR HABECO 1.1 Business strategy 1.1.1 Definition of business strategy “strategy” is the terminology originated from the Greece word “Strategos” to be used in the army; modern military theorist Clawzevit supposes that: military strategy is the steering art in favorable position According to Larous Coi dictionary: strategy is the art to steer media to reach success In 1962, Chandler has defined strategy as “the task of defining basic long term targets and purposes of the enterprise and the applying a series of action as well as allocation of necessary resources to implement this target” (Chandler, A.1962 Strategy and Structure Cambridge, Massachusetts MIT Press) By 1980s, Quinn has given a more general definition “strategy is the model or plan to gather the main targets, policies and a serial action into a strongly consolidated organization” (Quinn, J., B 1980 Strategies for Change: Logical Incrementalism Homewood, Illinois, Irwin) Then, Johnson and Scholes have defined the strategy in the quickly changed environmental conditions: “Strategy is the long term orientation and the scope of an organization to occupy competitive advantages for the organization via defining its resources in a changed environment to meet market demand and satisfy the expectation of stakeholders” (Johnson,G., Scholes, K.1999 Exploring Corporate Strategy, 5th Ed Prentice Hall Europe) Brace Henderson, the strategist and the founder of Boston consultancy corporation has defined that “strategy is to carefully search for an action plan to develop and connect competitive advantages of the organization The differences between you and the competitive opponents are the advantages for you” Michael Proter also agrees with the opinions of Henderson: “competitive strategy is related to the difference This is to select carefully a serial activities to 10 ... development strategy for HABECO by 2015 and vision by 2020 Recommendations and conclusions CHAPTER THEORY AND REALITY OF STRATEGY CONSTRUCTION FOR HABECO 1.1 Business strategy 1.1.1 Definition of business. .. Vietnamese Ha noi beer, alcohol, beverage joint Tổng công ty Bia- rượu- Nước stock corporation giải khát Hà Nội Sai Gon beer, alcohol, beverage Tổng công ty Bia- rượu- Nước joint stock corporation. .. includes chapters Preface Chapter 1: Theory and reality of constructing strategy for HABECO Chapter 2: general introduction and analysis of business environment of HABECO Chapter 3: selection of development