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The necessity for building up a business strategy. The application meaning of the studied theme for the enterpriseAnalysis of external environment: General environment: opportunity and challengeEnvironment in relevant professional job trades:+Specific features of the professional job trade+Competitive forces; Customers; suppliers; replaceable products; potential competitors; direct competitorsEnvironment of competitive rivals: Analysis of future orientations, present strategy, assumptions and capability of competitors.To build up business strategy for the enterprise, the performance solutions and recommendations for the enterprise
THESIS TO BUILD UP THE BUSINESS STRATEGY of MECO JSC IN PERIOD 2009 - 2015 TABLE OF CONTENTS PREFACE CHAPTER I BASIS FOR ARGUMENT 12 1.1 Business strategy: 12 1.1.1 Definition of strategy, business strategy: 12 a) Definition of strategy: .12 b) Definition of business strategy: .13 1.1.2 Basic matters in building up business strategy: .14 1.1.3 Target of business strategy: 16 1.1.4 Basic business strategies: 18 1.1.5 Relationship between business strategy and other strategies: 22 a) Corporate Strategy 23 b) Business Strategy (competitive strategy) .25 c) Functional Strategy (or Operational Strategy) .26 1.2 Procedure for building up business strategy: 26 1.2.1 To analyse external environment .28 a) Macro environment: 28 b) Analysis of job trade environment 28 c) Model of five competitive forces: 29 1.2.2 Selection of business strategy 41 CHAPTER II ANALYSIS OF ACTUAL SITUATION OF THE ENTERPRISE 43 2.1.Overview on the Enterprise 43 2.1.1.Summary of establishment and development process .43 2.1.1.1.General introduction 43 2.1.1.2.Summary of establishment and development process 43 Summary of establishment and development process: .43 2.1.2.The Company Organization Structure .45 2.1.2.1.Organization Structure Chart 45 2.1.2.2.Function & Task .47 2.1.3.The Company Management Structure .48 Management Board 48 2.1.4.Main business activities 49 2.1.5.Posted Securities .51 2.1.5.1.Securities type : Common share 51 2.1.5.2.Nominal Value : 10,000 VND/ share 51 2.1.5.3.Total posted securities : 13,200,000 shares 51 2.1.5.4.Restriction on the holding ratio to the foreigner 51 2.2.Analysis of status and result of production and business activities in the years 2006, 2007, 2008 52 2.2.1.Main business activities 52 2.2.1.1.Construction and installation activity .52 2.2.1.2.In regard to the industrial – mechanical production activities .54 2.2.1.3.Trading – Export & Import activities .55 2.2.2.The turnover and profit structure of production and trading activities through the years of 2006, 2007, 2008 56 a) Net turnover structure of production and trading 56 .57 b) The gross profit structure of production and trading activities .58 2.2.3.Result of business activities 59 2.3.1.Assessment on condition of building up strategy of enterprise: .60 2.3.2.Analysis of business environment of enterprise 63 Analysis of competitive forces in the job trade: 64 2.3.3.Company’s position in comparison with other enterprises operating in job trade .71 2.3.4.Analysis of internal company: 73 a) Analysis of value chain: 73 b) Analysis of core capability .76 2.3.5.SWOT Analysis 78 CHAPTER III : BUILDING UP BUSINESS STRATEGY FOR COMPANY, PERFORMANCE SOLUTION, RECOMMENDATIONS .82 3.1 Building up business strategy for company 82 3.1.1 Statement of mission 82 3.1.2 Determination of task .82 3.1.3 Determination of target 82 3.1.4 Selection of solution for business strategy : 84 Cost – Leadership Strategy ( governing strategy ) 86 Differentiation Strategy ( strategy in combination with cost – leadership ) .89 Strategy of close relation with customers ( strategy in combination with cost – leadership strategy and differentiation strategy ) 90 3.2 Some solutions for strategy performance : 92 3.2.1 Company Administration : .92 3.2.2 Culture and Leadership for strategy : .98 3.3 Action plans: 98 3.4 Quality Control: 100 3.5 Recommendations: .101 CONCLUSION 103 REFERENCES 104 TO BUILD UP THE BUSINESS STRATEGY of MECO JSC IN PERIOD 2009 - 2015 Enterprise: Vietnam Mechanization Electrification & Construction Joint Stock Company (MECO JSC) PREFACE General context: At present, majority of enterprises over the world pays so much attention and highly treasures the building-up of business strategy, they determine this is a topranking task for the each enterprise The directors of big-sized enterprises often spend a big part of their time for studying the business strategies (according to the data given by some articles it takes about 40% of annual time) In 1947, there was only 20% of American enterprises having business strategy; in 1970 this amount had reached 100% Many American enterprises assume that the business strategy building-up is the job occupying the most of time As mentioned by Mr Wilson, the Chairman of General Electric (GE) of America, having said: Every day I can just a few jobs, however there is a job that never finished, it is to build up the future planning ( Source: www.royal.vn/index2.php?option ) There are quite a lot of examples actually proving that even the most successful strategies still can not be forever long-lasted We may should be vigilant with the signs showing it is time to change or to adjust and modify the existing strategies Tens of years ago, the Japanese Canon company was just a small company, in which the American and Japanese big-sized enterprises were not much interested However, right that time, the company had already their strategy for developing to an international leading big company in the field of production of small-sized camera, cinecamera and had intention to defeat the American Xerox company in the field of producing photocopier, printer and other various office machines From holding 13% market of photocopier in America in 1998, until now Canon has gained 36,6%; and the market share of Xerox from 38,3% has been reduced to 14,2% remaining at the same time Canon has also overtaken Xeroc in the market of fast-speeded laser printer Not only so, the Canon also has become a fearful competitor to Lexmark specializing in production of sprayed printer, to Eastman Kodak in the field of digital camera, and also to GE right in the trade on which this group has gained success, i.e the superior photo-taker used in the health care job Kodak had led in trade of producing film used for taking photos in the years of 1970th, however in the early years of 21st century Kodak was faced to strong attacks by the strong competitors in digital technology such as Fuji, Sony, Canon… forcing them to reduce 72% dividend of shareholders to increase investment with 13 billions USD for business of digital trading with hope of enabling to increase profit from 13 billions USD to 16 billions USD in 2006 and according to statement given by Managing Director of Dan Carp, only doing so can help Kodak to maintain and develop further ( Source : www.igo-doanhnhan.bl ogspot.com/2007/08) Epson was a typical example of profit decrease fue to loss of market share when presenting a strategy of producing low priced laser printer in 1989 with expectation of hastening market decrease of needle printer and assumming that the loyal customers of Epson might should buy their laser printer However, they have failed to Hewlett-Packed, a leading company in field of laser printer having entered into market with product of laser printer with price lower than the laser printer produced by Epson For Vietnamese enterprises, according to the assessment by Mr Jago Penrose, a financial policy analysis expert of United Nations Development Programme (UNDP) in 2007, it was said that “the enterprises having been considered as biggest in Vietnam are only almost equivalent to the small and medium-sized enterprises over the world” Previously, the building-up of business strategy was not treasured yet by the enterprises, however in order to adapt themselves to the international integration, it is required Vietnamese enterprises to change their strategic policies accordingly The Biti’s company has proved their coping capability with competition from the 1990th years when pioneering in building up Vietnamese trademark, soon penetrating into Cambodia market and Laos market to get a high turnover The garment making company No 10 has a fairly daring decision to concentrate on producing highly qualitative shirt and complete jacket, using advanced technology with highly skilled labour This has helped company to overtake foreign competitors having many products which are easy to be produceable The Vietnamese milk products company of Vinamilk has highly treasured the strategy of developing national distribution network and trademark right from 1990th years The Vietnam National Oil & Gas Group (PetroVietnam) is an example for penetrating into new market such as the marine transport market, which is naturally considered as trade job done by Vietnam National Shipping Lines Corporation The Vietnam Machinery Erection Corporation (LILAMA) from position of being a pure machinery erection enterprise only, has treasured strategy of becoming a first strong EPC Contractor in Vietnam At present, most of big industrial buildings in the country all require the experiences, man-force of managers, staffs and workers of LILAMA However, at present the matter of establishing a business strategy which is methodical and scientific right at beginning of trade is still a barrier not easy to overcome for the Vietnamese enterprises The necessity for building up a business strategy The application meaning of the studied theme for the enterprise: From the 60th years of the 20th century, starting from some big sized enterprises in America, Japan, then largely spreading in the countries having trend of shifting from long-term planning for determination of specific annual tasks, criteria to building up a business strategy with guidance policies and mottos for activities of the enterprises The reason for this change is originated from context of business environment having been continuously changed in regard to technology, political environment, customers, competitors,… causing the tasks, targets determined in long-term plans 5-7 years to be regularly reviewed and re-calculated In order to enable maintaining and developing, the enterprises must reply to the questions: which types of business may should be performed? If it is required to change the business activities or not? Which competitors are penetrating into the market? How the existing customers are changing now? Which developing technologies may impact to the enterprise? The Vietnam Mechanization Electrification & Construction Joint Stock Company (MECO JSC) has the orientation of developing trademark, leading MECOJSC to become a strong trademark in the market by the policy of firm and sustainable development and growth in business activities – as being the topranking target in long-term development strategy of company At present, the company has a plan for establishing business strategy in period 2010 – 2012, developed until 2015 Therefore, our study group selects the theme “To build up the business strategy in period 2010 to 2015 of the MECOJSC” The group members are also much expected to help the Company Leadership to apply this theme in building up business strategy for the enterprise in the coming period Purpose of study: The theme has been studied with purpose of getting general and overall knowledge about building up a business strategy for an enterprise generally and for the MECOJSC Company particularly in period 2010 – 2015 Scope and object of study, restriction of theme: The theme concentrates on studying circumstances of MECOJSC Company in period 2009 -2015, with: - The study data from years of 2006, 2007, 2008 and early year of 2009 - The investigation time at the Company is from June to early July 2009 Object of study: MECOJSC Company Restriction of theme: - The business strategy is only applicable for a definite period, from 2009 – 2015 - It is applicable for MECOJSC Company solely Method for performing study, data source: The MECOJSC is a Joint Stock Company having posted their securities on the joint stock transaction place so it is possible to exploit the data about company in a legal, easy manner with high reliability This is an enterprise related to field of construction and mechanical and electrical works, therefore it is possible to analyse, compare with many other enterprises operating in the same trade job as in the study group there are members having knowledge and understanding in this field We have approached Mr Nguyen Binh Duong - General Director and have been exchanged and discussed in very expansive manner, ready to provide the information and data related to the enterprise serving this theme Currently, there are available many documents in form of printed books, written articles in the Internet relating to the theme Therefore, the selected method for performance of study is included: - To directly collect the information at Company; - To refer to the data having been filed previously at the Company; - To get an interview with the Company General Director; - To refer to the documents, printed books, written articles in the Internet; - To refer to the textbooks of Training Program for International Business Administration Master, the instructional documents for main task of the program; - To investigate, analyse, summarize for getting reliable conclusions; - To analyse with SWOT Data source: - Secondary source: + Company Statement given in 2007, 2008, quarter of 2009 posting securities at Hanoi Joint Stock Transaction Center + Company financial reports in 2007, 2008 taken at the company + Documents in printed books, Internet, learning textbooks - Primary source: + Analysis data based on the references and comments given by experts Structure of main task: Besides the preface, conclusion, reference list and appendixes, the main content of main task is divided into 03 chapters: Chapter I Basis for argument It is the chapter introducing argument basis of theme of building up business strategy, as the foundation for developing next chapters 1.1 Business strategy: 1.1.1 Definition of strategy; business strategy 1.1.2 Basic matters in business strategy 1.1.3 Target of business strategy 1.1.4 Description of business strategies 1.1.5 Relationship between business strategy and other strategies 1.2 Procedure for building up business strategy: 1.2.1 Analysis of external environment: - General environment: opportunity and challenge - Environment in relevant professional job trades: + Specific features of the professional job trade + Competitive forces; Customers; suppliers; replaceable products; potential competitors; direct competitors - Environment of competitive rivals: Analysis of future orientations, present strategy, assumptions and capability of competitors 1.2.2 Analysis of internal environment of enterprise: - Competitive advantages - Internal analysis: + Analysis of value series of enterprise: major activities and auxiliary activities + Analysis of SWOT: strong points, weak points, opportunity, challenge 1.2.3 Building up strategy: Company (Corporate) - graded strategy; international strategy - Cost – Leadership Strategy - Differentiation Strategy - Focus Strategy on a specifically competitive market Chapter II Analysis of actual status of Enterprise 2.1 Enterprise overview: 2.1.1 Summary of formation and development process 2.1.2 Company organization structure: organization chart; function and task 2.1.3 Management structure 2.1.4 Main business activities 2.1.5 Posted securities 2.1.6 Some main features of enterprise impacting to building-up of business strategy for company: - Features in organization - Features in business activities - Features in capital sources 2.2 Analysis of situation and Result of production and trading operations in the years of 2006, 2007, 2008 2.3 Analysis of strategic matters and administration of the enterprise: 2.3.1 Evaluation on existing status of strategy building up for the enterprise 2.3.2 Analysis of environment of job trade for the enterprise - The competitive forces in the professional job trade 10 this is a product type having a high competitive capability in comparison with other competitors However, it is highly possible in next coming years, competitors shall transcribe and abundantly use this technology, therefore company may should study improvement for increasing more the productivity, study expanding market to field of execution of concrete road With study of improvement for using ramming/rolling concrete in construction of concrete road, the company needs associate with prestigious distributors of additives, use advanced additives for increasing the curing time, fast ensuring strength to enable to soon exploit and use To create differentiation in regard to time schedule, it is required Project Management skills With a limited manpower source, company may should bravely invest time, finance in human training for Project Management Boards, should have an appropriate regime such as salary improvement, development orientation To create differentiation in regard to schedule, it is required to invest in informatics technology, professional management softwares, aiming to systemize, shorten at maximum time spending for establishing technical, financial, quality control documents because of particularity of construction job trade Strategy of close relation with customers ( strategy in combination with cost – leadership strategy and differentiation strategy ) Strategy orienting to create value for customers on the basis of getting suitable with products and services having a better and better definition by customers The target is to gain loyalty and long term lucrative possibility of customers Under this angle, the MECOJSC’s task is to continuously make increased satisfaction of customers The relation may appear in numerous forms: making business with old customers, understanding and knowing clearly needs of customers, seller is enthusiastic to explain about his own products,… MECOJSC has determined target of maintaining mostly old customers Because these are customers constantly having prospects for company’s business activities, as being potential customers, having been entrusted by State for managing big capital 90 sources such as project management boards of hydro-power, water resource buildings, economic groups as EVN, big sized contractors as Lilama, Vinaconex, Licigi,… to maintain International customers in commerce field, customers in markets of Russia, Bulgaria, Ucraina,… However, in order to reach the growth rate, it is required to look for new customers aiming to increase market-share of product / service supply In order to perform this matter, MECOJSC needs present valuable proposals for determining company’s strategy with respect to customers through describing a special combination among product, price, service, relation and image that company shall bring to customers To satisfy needs of determined curtomers through introducing the MAINTAIN AND DEVELOP effectiveness, quality and improvement been created by MECOJSC in MAINTAIN having AND DEVELOP VALUE OF SHAREHOLDER VALUE OF SHAREHOLDER activities Besides, to create differentiation due to shortening time as meeting customers’ needs aiming to meet a higher satisfaction degree The customer IMPROVE DEVELOPMENT satisfaction is included : pleasure of customer; ability to hold and cling customer; IMPROVE DEVELOPMENT PRODUCTIVITY PRODUCTIVITY STRATEGY STRATEGY how to get customer; degree of creating profit by customer; market-share and stocks (see Figure 3.2) IMPROVE COST IMPROVE COST STRUCTURE STRUCTURE INCREASE USING INCREASE USING ASSETS ASSETS Degree of creating profit by customers EXPAND CHANCE EXPAND CHANCE FOR INCOME FOR INCOME Stock market share Get customers INCREASE VALUE INCREASE VALUE OF CUSTOMER OF CUSTOMER Ability of holding customers Price Quality Asset Feature Service Co-operate - Policy of price lower than comp rivals for products as const of hydro power, ramming rolling concrete, real assets - Better than comp rivals with respect to all products and services Constantly ready to supply service / product in operation field Ensure good, sufficient features of product Ensure schedule, perfect in care of customer, after sale Both sides are beneficial - Firmness & durability - Stabilize price 91 Figure 3.2 Customer’s satisfaction Mutually respect Trade mark Reinforce and develop trademark 3.2 Some solutions for strategy performance : To effectively perform the business strategy, company must select combinations of organizational mechanism and control system The organizational mechanism and control system take the roles : - To combine and co-ordinate activities by staffs in such manner that they work effectively for realizing strategy making increased competitive advantage; - To encourage staffs, to provide them with motive for reaching a superiority in regard to effectiveness, quality, improvement and customers’ satisfaction 3.2.1 Company Administration : Company organizational structure improvement An effective organizational structure of a company must meet the demand for stability and flexibility Stability brings to company the needed capability in management of procedures of fixed daily and predictable operations Flexibility in structure brings opportunities to develop competition and helps to allocate sources for creating needed competitive advantages MECOJSC’s current organizational structure has many dependent units of accounting (divisions), so that crucial decisions are to be made at the head office by the Board of Directors (BoD) It’s beneficial for the company’s strategy to become leader of the construction sector with low costs and to differentiate itself from others thank to good rate of progress However, with the demand of expanding the 92 company’s scale into many more sectors and markets together with increasing annual revenue and profit, the company structure will soon become overloaded and uncontrollable unless it change to adapt new conditions Therefore, basing on the company’s internal analysis, business characteristics, business strategy in the phase of 2009 to 2015, the group suggests the company restructure according to functional model, which has some advantages such as: - Groups can learn from each other to become better, more specialized and more productive - Groups can supervise each other to ensure all does its tasks best, which helps improve effectiveness, reduce costs and increase flexibility of management - Help BoD to better monitor all operations of the company In accordance with the combined strategy, the structure of the company must meet some requirements as follows: - Decision making model should include both centralization and decentralization To increase the authority in production handling for Project management boards, dependent accounting units among the company aiming to promote the strength of organization and to ensure the construction time schedule through the company operating regulations To complete and strengthen the returned capital collecting part of Company - Semi-specialized tasks To complete the production lines for rolling concrete according to specialization; to build up skilled worker groups in construction field such as carpenter for forming work, worker for installation and making steel forming, for concreting, and for operating the construction equipments - Rules and principles allow employees to behave in a respectful and friendly manner in work MECOJSC’s BoD should centralize power when making crucial decisions relating to targets; strategies; annual business plan; investment projects; high valued 93 contracts or important clients; or structural policies; key personnels, research&development; quality control system; expand business scale, new products; equipment management; finances (funding, guaranty, real-estate price, equipment liquidation, purchasing spare material for projects require high progress rate, profit distribution…) The company should decentralize to its subsidiaries the power to make decisions and take responsibility for its business operations, to manage its human resource, and to be financially independent For construction projects, the company should also give each Project Management Board the right to actively organize and manage its resources to fit with each project conditions, actively decide on methods to control on site work and actively propose financial policies in salary payment and material purchase… The company must have solutions ready to control emerging issues in information system, product measurement system due to functional reorganization and flexibility due to more operating markets To improve company’s internal management procedures : MECOJSC’s tasks are to complete, improve and manage company’s operations following existed procedures together with build up plans to implement ERP project – a technology solution which is capable of managing all company’s resources like human resource, finance, production, trade as well as analyzing, testing, and calculating risks and current usage condition of all resources The procedure for improving company’s internal management that MECOJSC is heading for includes: procedures for operation management, customer management, renovation, as well as adjustment and society procedures Operation management procedures: are daily basic routines and by which companies produce products and services for customers It normally includes: buying raw material from suppliers; converting raw material into products; distributing products to customers; and handling risks These procedures would efficiently serve the strategy to become leader in term of saving costs In the field of construction of hydro-power, water resource buildings, due to the particularity that 94 buildings have complex and difficult, dangerous locations, not convenient for activities, in order to perform the cost – leadership strategy, it is required to use the sub-contractors of transport, material/fuel supply, manpower does not require high skill As the company key businesses are hydroelectric-power plant constructions, real-estate investment, machine manufacture and trade so that MECOJSC’s operation management procedures mainly focus on quality control procedures according to ISO 9000-2000; procedure for hydroelectric-power plant construction, especially roller-compacted concrete technique is more and more improved, highly specialized, equipment maintenance, and some other internal operation procedures in accordance with company’s current regulations and rules In order to perform the governing strategy, MECOJSC may should implement the material management procedure of JIT aiming to reduce storage expense, store keeper salary, material protection and maintenance expense, borrowed capital However, due to the particularity of work, this procedure should have creation and flexibility for ensuring material, fuel sources to be timely provided for the works The best thing is to closely contract with the suppliers, to have encouraging policy such as fast payment, making co-operation at other buildings,… The hydro-power construction field has greatly numerous risks, especially the natural risk Therefore, to enable managing the risks, MECOJSC must buy insurances for materials, equipments, goods, products… through insurer having prestige in the market To prevent the risks by means of good performance of management, monitoring the weather conditions, getting understood the features of each locality where having the buildings, getting a good relationship with management organs in the operation area The quality control in constructing hydro-power and water resource buildings, especially the concrete quality control is extremely important A good quality control shall perform the contractual commitment with customers, and at the same time shall also be a measure for reducing cost and accelerating time schedule because it is not required to again, and not required to repair the products At 95 present, the MECOJSC’s quality control system which is done according to ISO 9000-2000 basically has been already conformed to the approved procedures, however, due to the manpower source still does not fully meet the requirement, MECOJSC may should pay special attention to training, fostering further the manpower for quality control Especially, because there are numerous material suppliers, besides its own control team, it is necessary for MECOJSC to attach the responsibility to suppliers through concrete conditions mentioned in the contract, and to co-ordinate for training their team also Customer management procedures These procedures help to extent and tighten relationship with potential customers Theoretically, there are four main processes: selecting customers, getting customers, keeping customers, and discover new potential customers These procedures are to ensure the success of the strategy of maintaining close relationship with customers Currently, MECOJSC doesn’t have standard procedure for customer management; therefore, the target of a close relationship with customers strategy must be to maintain good relationship with familiar customers and seeking for new ones at the same time MECOJSC must build up procedure that meet two requirements: keeping loyal customers and developing new customers Renovation Procedures Since MECOJSC’s scope of business are mainly providing customer’s products and services, the renovation procedures should focus on managing list of investment capital for the research and development of Lab for Construction Materials –LAS XD571 and RCC factory As for the Trading Center, its duties are to find products and markets to expand catalogue, so that it needs a procedure for handling investment risks Adjustment and Society procedures These procedures ensure the company to have rights to continually participate in social activities in communities and countries where the company is doing business At present, MECOJSC has developed rules and principles on salary, social insurance, industrial safety and 96 hygiene at its factories; however, there haven’t been any regulations on investment for environment and society To improve, develop the sources: To implement the company’s strategy and mission, MECOJSC must use, develop sources of invisible assets including "human", "information" and "organization " Human l The company’s current human resources is really limited due to lack of overall personnel plan for the whole company including recruiting and training appropriately This is clearly shown when analyzing the value chain of MECOJSC It shows that human resources only covers about 5% of the value chain Therefore, the company needs to focus on training, updating new knowledge to the management team, training and retraining for staff; extracting training costs each year to support and encourage employees to fostering their self-knowledge, and building up overall personnel plan to show professionalness in the recruiting and evaluating employees In order to perform the proposed strategy, the MECOJSC Leadership may firstly pay special attention to training skills for Project Management Boards, management staffs and technicians directly connected with production line of rolling concrete, constructing hydro-power, water resource buildings; to soon establish a separate marketing part for the Company, and part for research and development, part for human resource management Information Currently, MECOJSC are deploying Sharepoint software to manage and share information internally The company must exploit more features of this system to ensure the standardization of internal system network, and standardization of managing and storing process to meet the readiness in the exploitation and update information In the construction activity, in order to perform the cost – leadership strategy, in combination with differentiation creating through measure of accelerating the building progress, the timely and exact information takes a very important role in production handling Organization Enhance leadership and ability to link the team spirit when doing separate projects MECOJSC may should restructure some working units with 97 respect to field of production of rolling concrete for getting further specialization It should be brave to devolve and divide management grades to some units among the company aiming to fully promote the capability of the organization 3.2.2 Culture and Leadership for strategy : Organizational culture is a set of values and specific standards shared by people and groups in the organization and control how they interact with each other and with external organizations To implement the strategy, MECOJSC must: Building a strong organizational culture: - To spread and maintain the positive spirit of the organization Since the values of the organization are the beliefs and ideas on the objectives, standards of behavior such as respect, professionalism, productivity, the company needs to develop its organizational standard Those are guidelines, regulations, internal regulations; - Implementation of symbolic activities that encourage new cultural values - Allow employees to participate in meetings to create the agreement and commitment for a cultural change - To set new mode of encouragement: praise and development Close leaders: - Close leaders can raise and give more motivation for employees - Request for managers at all levels to understand the practical situation of their unit and measures to handle problems arising in a democratic manner; - Encourage managers to meet and consult with their employees 3.3 Action plans: "Good strategy, bad implementation" or "plans don’t go together with actions" reflected in the failure of separating the building strategy - the work of the strategy planners from implementation – work to be done by chief/head of 98 departments Therefore there is no division between the strategy construction and implementation strategy The implementation of strategies affects all activities of the company from top to bottom, strongly impacts all areas of business as well as each separate strategic business unit So making strategy must go with implementing strategy To successfully implement the company’s strategy, it needs to determine the detail implementation programs The process of identifying implementation methods is proposed as following: 1.1.Determine Determineprogram programfor fordeveloping developing business strategy business strategy 2.2.Make Makespecific specificplan plan for developing for developingstrategy strategy 3.3.Choose Chooseleaders leadersofofprogram program 4.4.Set Setup upcost costbudget budget Figure 3.3 Model for determining program of developing business strategy To determine the program to directly implement business strategy needs to note that: The activities are mutual dependency so it is absolutely in need of coordination; programs should be clearly defined responsibilities Sometimes these two aspects may conflict with each other 99 To identify the mutual dependence among programs in order to set up implementation schedule This dependence may appear for resources related reasons, such as: technology, human, support from other departments, time, finance, strategic partners, and training To choose program leaders before making detailed plan of implementation This allows the program leaders to get involved in planning details of the program A good program leader is usually people who has essential technical knowledge, holding a position in the company to promote the program, and who can arrange the time needed for the program However, in practice, it is often not easy to find the program leader program that can meet all these requirements For each program, the management level must always be responsible for planning and implementating in detail As this is a common strategy for the Company, the best thing is to require a person including in the Company Leadership, who has ability to generally handle the strategy performance Set up cost budget Whatever plan that needs to smoothly implementing must have the secret: the plan must be simple; list those who will implement; feasible; and clearly defined roles and responsibilities 3.4 Quality Control: To keep the plan implemented in the right direction, the company management board need to detect and fix problems when implementing the strategy The detection tools include: - The criteria of performance is built for each action plan through evaluation of: production costs by the product, sales of each unit, the completion time of a business phase - Periodically review the whole process, the best is quarterly check: check what departments and units fail to implement, what was done, the main issues needs to be resolved, the decisions or resources that the department 100 needs, performance for the objectives involved These results could only be archived when company leaders encourage employees to express their own difficulties in the implementation process - Carry out non-official tests that are close to all activities to detect difficult problems To evaluate the effectiveness of the strategy, the company needs to develop measures of implementation According to the group’s point of view, MECOJSC should use the financial measure, equilibrium point record Financial analysis Financial analysis through profitability indexes: net profit / total assets (ROA), percentage of profits / share capital (ROE), operating profit (EBIT) If these indexes of the company are lower than that of competitors or weakening year by year, the management of the company has to find out the reasons, whether it is strategy error or poor strategy implementation? The equilibrium point record by Robert Kaplan and David Norton uses four points to evaluate In general, these opinions will help the management board of the company to judge: how the customers are judging us? What should we to be better? Can we continue improving and renovating? How we care about shareholders? 3.5 Recommendations: The subject of setting up business strategy for MECOJSC done by our group is based on the theory obtained and reference materials, documents and actual situation of the company from 2006 to QI/2009; and is based on the SWOT analysis to identify the opportunities and challenges, strengths and weaknesses of the company The group hopes the management of the company will take time to research to apply any part to the business strategy construction However, even the most successful strategy can not last forever, so that in the implementation of the strategy, the company’s leaders need to be alert at the signs that indicate time to change or adjust the current strategy In the context of the world economy weakening today and with the goal of bringing MECO to become a strong brand 101 name, the company should not consider that once setting up a strong brand name, it can be freely expanded production line and business sectors This is the trap that makes many strong brand names ending up worst, that is when the image of the company becomes stained 102 CONCLUSION With knowledge gained through the MBA training course by University of Griggs - USA in cooperation with Vietnam National University-Hanoi and reference materials, the group has analyzed the competitive force model by Michael E Porter, used SWOT analysis tools to identify strengths, weaknesses, opportunities and challenges of MECOJSC to determine the position of MECOJSC in the sector This is beneficial for businesses in planning business strategy with the real situation Specifically: - Analyzing and evaluating the company’s capacity through the model of value chain in order to determine the company’s core business capacity and create strong value of the company when involved in the value chain - Building the business strategy for the company for the period from 2009 to 2015 The strategy generally meets the company’s core business capacity, the development requirements of the industry and market in general - Defining the specific action plan for implementing strategies Defining resources and specific schedule to realize the strategy and to ensure the successful implementation of the strategy However, due to time and knowledge limitation so that the implementation solutions still lacks specification for each function, department, and business unit of the company Therefore, the group look forward to receiving the support of MBA Training Course to better our study 103 REFERENCES Strategic Management coursebook, HR Management, Financial Management, Marketing Management by Advanced Global Master of Business Administration The "Strategic Management" by PGS.TS.Le The Gioi; TS Nguyen Thanh Liem; Th.S Tran Huu Hai - Publisher of Statistics, 2007 "Effective Business Strategy " - Harvard Business Handbook - Publishing House of Ho Chi Minh City MBA for Leadership, author Steven Silbiger, General Publishing House of Ho Chi Minh City Articles, opinions of respected experts on the Intenet and other sources Some study themes about business strategy of the MECOJSC Company 104 [...]... bringing strategy into performance Procedure for building up business strategy is shown in following figure: CORPORATE CORPORATESTRATEGY STRATEGY TO TOANALYZE ANALYZEBUSINESS BUSINESSJOB JOBTRADE TRADE TO TOANALYZE ANALYZEINTERNAL INTERNAL CORPORATE CORPORATE TO TOINTEND INTENDAND ANDSELECT SELECT BUSINESS BUSINESSSTRATEGY STRATEGY Figure 1.1 Procedure for building up business strategy 27 1.2.1 To. .. strategy creates basis for other functional strategies, for instance, marketing strategy, financial strategy, R&D strategy and operational strategy takes a role of strengthening competitive strategy of enterprise The functional strategy assists corporate strategy and business strategy For the single-disciplinary business units and each business base in interdisciplinary business units, functional strategy. .. and to adjust them in accordance with expectations of customers, - To determine the balance and clear exchange (to select what should not do), - To ensure the activites in series of values to be fit, matched and supplementary to each other, 14 - To ensure the continuity in strategy with regular improvements in strategy performance The continuity of strategy is mainly aimed to get a firm and sustainable... complete the corporate strategy) in its own operation field The business graded strategy has the same importance for single-disciplinary business units and each individual enterprise in an interdisciplinary business unit In part of basic business strategies, the group shall present specifically about definition and solutions of basic business strategy c) Functional Strategy (or Operational Strategy) ... According to Boston Consultancy Group: "Business strategy is the determinations of distribution of available sources with purpose of changing the competition balance and shifting advantage to your side’’ According to Michael E Porter: "Business strategy for coping with competition is combination between targets to be reached and means that enterprise should seek to reach the targets’’ Definition of Business. .. competitive in some job trades and product markets An effective corporate strategy makes the business units overall gained comprehensive income exceeding what they can do if having no strategy, contributing to strategic competitive capability of company, and bringing to company the capability of gaining income above medium The corporate strategy is shown in the forms: concentration on a single business field,... rival are the bases for your advantage” (Source: Effective business strategy, Harvard Business Essentials, Publisher of Generals, Ho Chi Minh City, page 10) According to Michael E Porter, the top-ranking strategy professor of Havard: 12 - Strategy is creation of an unique and valuable position, including a series of various groups.”; - Strategy is to perform balancing various factors aiming to gain a... therefore, in order to get successful the enterprise has to maintain continuity in regard to group of typical values It is the continuous improvement that is the manner for enterprise to perform their own group of typical values The continuity in strategy shall allow enterprise to learn and change faster, more effectively (Source: Saigon Businessman Newspapers) The first important step in process of. .. search of sources, capability and core ability and to develop them for dealing with the dangers, taking full advantage of opportunities from external environment, (5) To perform the strategy The task of analysis of external environment and internal environment of company and then selection of strategy is considered as the task of building up strategy The strategy realization shall be included of designing... get everything Professor Michael E Porter gave three solutions of comprehensive strategy used in competitive environment: - Strategy of dominating in regard to cost, - Strategy of differentiation, - Strategy of focusing Strategy of leading in regard to cost is the generalization of actions aiming to produce goods or services having particularities acceptable to customers with a lowest cost in relationship