BUILDING STRATEGICAL REAL ESTATE BUSINESS IN 2010 – 2015 FOR SONG MA COMPANY DECLARATION The paper is submitted in fulfillment of the requirements for the degree of Master of Business Administration Program I would like to certify that this capstone project report is the result of our own research that has not been submitted for any other degrees Hanoi, October 30th, 2009 For Group ii ACKNOWLEDGEMENT On behalf of the group, I gratefully acknowledge our deep indebtedness to all our teachers and staff working for Master of Business Administration Program associated by Center for Educational Technology and Career, Hanoi National University and Griggs University, America who have provided us with useful and interesting lectures which have help us lay the foundation for this report In particular, we would like to express thanks to organizations and leadership in Thanh Hoa province as well as Department of People’s Committee, Department of Construction, Department of Investment and Planning, Department of Finance, Department of Statistics, etc in Thanh Hoa city who has recommended and helped us collect information and shape the ideas of this capstone project report We also wish to thank Song Ma Company for their much support, consideration and help Last but not least, it is our very sincere acknowledgements to our families and friends for their kindly helping us and their constant encouragement iii TABLE OF CONTENTS Declaration ii Acknowledgements iii Table of Contents iv Acronyms viii List of Tables and Figures ix INTRODUCTION 1 Rationale 2 Meanings of the Study Aims of the Study Methods of the Study Expected results Design of the Study Chapter 1: General on Building Strategical Real Estate Business Summary of chapter I 1.1 Strategy and Strategical Business 1.1.1 Strategy and its Role in Enterprise Development 1.1.2 Basic strategies 1.1.3 Advantages of Competition and Core Competitive Capacity 10 1.1.4 Building Strategical Business Process 13 1.2 Vision and Mission 15 1.2.1 Vision 15 1.2.2 Mission 15 1.3 Analysis of strategies 15 1.3.1 External Environment 15 iv 1.3.1.1 Macro-Environment 16 1.3.1.2 Micro-Environment 19 1.3.2 Analysis of Internal Environment in Enterprises 29 1.4 Building and Selecting strategical objectives 31 1.5 Implementation and Evaluation 32 1.5.1 Framework 32 1.5.2 Strategy Control 33 Conclusion of Chapter I 34 Chapter 2: Situation of Real Estate Business in Song Ma Company during 2010 – 2015 Summary of chapter II 36 2.1 General information of Song Ma Company, Thanh Hoa province 37 2.1.1 History of establishment and development 2.1.2 Features of production structure and management organization 38 2.1.3 Special features of Song Ma company affects real estate business strategy 40 2.2 Special features of real property business affects real property strategy building of Song Ma company 41 2.2.1 Real estate investment 41 2.2.2 Main features of real estate 42 2.2.3 Role of real estate investment 43 2.3 Business strategy analysis of Song Ma company 43 2.3.1 Vision and mission of Song Ma Company 43 2.3.2 Macro-analysis – PEST model 44 2.3.2.1 Legal & political environment 44 2.3.2.2 Economic environment 47 2.3.2.3 Social – cultural environment analysis 48 2.3.2.4 Technical scientific – technological environment 49 2.3.3 Industrial environment analysis (micro-environment) 50 v 2.3.3.1 Existence of industrial competition within communities 51 2.3.3.2 Threats from new-comers 53 2.3.3.3 Customers 55 2.3.3.4 Suppliers 56 2.3.3.5 Alternative product 56 2.3.3.6 Matrix for assessment of external factors affecting Song Ma Company (EFE matrix) 57 2.3.4 Internal environment analysis 58 2.3.4.1 Organization 58 2.3.4.2 Human resource 59 2.3.4.3 Accounting work 60 2.3.4.4 Sales – marketing work 61 2.3.4.5 Customer service work 62 2.3.4.6 Equipment’s technology 2.3.4.7 Construction investment project management capacity 63 2.3.4.8 Assessment against competency of Ma River Company (in comparison with other opponents) 66 2.3.4.9 Internal factors assessment matrix 68 Chapter 3: Building Strategical Real Estate Business for Song Ma Company in 2010 – 2015 Summary of Chapter 71 3.1 Directions and strategic objectives of Song Ma Company in 2010-2015 72 3.1.1 Direction of Song Ma Company of 2009-2015 72 3.1.2 Objectives and industrial structure of Song Ma Company to 2015 72 3.1.3 SWOT matrix analysis 72 3.2 Assessment of real estate business strategies 76 3.2.1 Assessment on company’s business strategies 76 vi 3.2.2 General assessment of real estate business strategy 78 3.3 Solutions for real estate business of company 80 3.3.1 Financial solution 80 3.3.2 Human resource solution 81 3.3.3 Technology and equipment solution 83 3.3.4 Marketing solution 84 3.3.5 Solutions of construction investment and land clearance 86 3.4 Suggestions and Recommendations for better strategy implementation 87 3.5 Implementation schedule 87 3.6 Shortcomings of the study 88 CONCLUSION 90 References Appendixes Appendix Appendix 2: Form 1and Form vii ACRONYMS SWOT Strengths, weakness, oppotunities PEST Politics, Economics, Social, Technology EFE External factor evaluation IFE Internal factor evaluation EPS Earnings per share ROE Return on Equity ME Monitor and Evaluation WTO World Trade Organization APEC Asia-Pacific Economic Cooperation B.A Bachelor of Arts M.A Master of Arts DoPC Department of People Committee viii LIST OF GRAPHS, FIGURES AND TABLES Graph 1: Vision and Mission 14 Graph 2: Elements of Macro – Environment 16 Graph 3: Competition components 21 Graph 4: Value chain 29 Graph 5: Construction Investment Project Implementation 64 Graph 6: Land Hand-over Procedures 65 Table1: EFE Matrix 28 Table : IFE Matrix 30 Table 3: SWOT Matrix 32 Table 4: Assessment on competitive opponents 52 Table 5: EFE matrix 57 Table 6: IEF matrix of Ma River Company 68 Figure 1: Summary of housing demand prediction of Thanh Hoa in 2015 50 Figure 2: Data on competitive companies (2008) 51 ix x REFERENCES English: Abraham (1999), “Strategic Alternatives and choice The Heart of Strategic Planning” Charles W.L.Hill and Gareth R.Jones (1999), “Strategic Management”, Washinton, p.134 Fred R.David (2000), “Outline of strategic administration” (translated version), Statistics Publisher Raymond Alain THIETART (1999), “ Enterprise’s strategy” (translated version) Griffin (2005), “Competitive Strategy” ( translated version) Vietnamese: Nguyen Lien Diep va Pham, Van Nam (1998), “ Strategy and business policy”, Statistics Publisher, pp 92-95, 147-150 Le The Gioi, Nguyen Thanh Liem, Tran Huu Hai (2009), “Strategic administration”, Statistics Publisher Other data sources : Information found on Website 10 Facts and figures collected by Thanh Hoa Construction Department 11 Other MBA graduation studies 12 Textbook “strategic administration” of master education of International business administration by Training & technology and career system Center – Hanoi National University in association with Griggs University – America organized in Vietnam 13 Comprehensive planning of Thanh Hoa city construction to 2025 with vision to 2035 ANNEX 01 LIST OF REAL ESTATE INVESTMENT PROJECTS IN THANH HOA CITY (1993-2008) NO Project’s name Area Construction site Investment INVESTOR total (ha) (billon dong) Phu Son 4,0 Phú Sơn ward 5.0 Song Ma Company Dong Ve No 1,2,3,4 ward 15.5 Đông Vệ ward 30.0 Song Ma Company residential area Northern Le Loi 3.5 Lam Sơn ward 7.5 8.0 Đông Thọ ward 89.0 Song Ma Company 24.0 Đông Thọ ward 173.0 HUD4 avenue residential Song Ma Company area Mai Xuân Dương residential area North – East railway station Company urban area (75%) Song Ma Company (25%) Northern Dong 5.4 Huong brigde Đông Hương 25.5 commune Song Ma Company residential area Bao Ngoai 3.2 residential area Dong Ve Đông Hương 8.0 Song Ma Company commune 3.5 Đông Vệ ward 15.0 Song Ma Company 30.0 Hoàng Long 125.0 Thanh Hoa residential area Hoang Long urban area commune construction General Company 10 11 Northern Hac 18.0 Đông Thọ ward 115.0 bridge with BC General plot urban area Company Northern Le Loi 50.0 avenue urban Đông Hương 150.0 commune Dong Phat urban Ltd 16.0 Đông Vệ ward 290.0 area 13 Nhoi urban area Binh Minh Company area 12 Hoang Long Song Ma Company 25.0 Đông Sơn 120.0 HUD4 Company 14 West – East Wards of Phú beltway project Sơn, Tân Sơn, 553.0 Song Ma Company Ngọc Trạo, Đông Vệ, Đông Sơn 15 Dong Ve project 36.7 Đông Vệ ward 368.0 Song Ma Company 16 Dong Son 2.1 Đông Sơn ward 7.5 HUD4 residential area 17 Truong Thi residential area Company 5.2 Trường Thi ward 21.0 Song Ma Company with green campus 18 Phan Chau Trinh 1.0 Điện Biên ward 45.5 residential area 19 Lam Son square Company 13.6 Điện Biên ward 128.3 project 20 Commercial HUD4 0.5 Ba Đình ward Song Ma Company 185.0 Center and Song Ma Company Lakeside highranking building project 21 22 Nam Ngan 30.5 Nam Ngạn ward 183.0 Bac Ha residential area Company project Ltd Quang Hung 4.0 commune’s Quảng Hưng 15.0 125 Company 16.7 General commune residential area 23 Nguyen Trai residential area 1.0 Ba Đình ward Company of construction investment and infrastructure development 24 Phu Son ward 3.0 Phú Sơn ward 12.0 residential area 25 Quang Thanh Company 100.0 urban area 26 Ham Rong ward Hac bridge Dong Tho market 850.0 Not identify Hàm Rồng 5.0 Song Ma Company Đông Thọ 30.0 Song Ma Company 2.0 ward 5.5 residential area 28 Quảng Thành commune residential area 27 ward 3.5 Đông Thọ ward 27.5 Song Ma Company 3.0 Lam Sơn 16.0 Song Ma Company residential area 29 Lam Son market residential area 30 Thanh Cong lake ward 2.5 Điện Biên ward 12.0 Song Ma Company 2.5 Quảng Hưng 7.5 Song Ma Company 25.0 Song Ma Company residential area 31 National road 47 residential area 32 Phu Son Lien Ke house group HUD4 commune 2.0 Phú Sơn ward 33 Lam Son ward 3.0 Lam Son ward residential area 15.0 HUD4 Company ANNEX 02 FORM FORM OF EXPERT’S OPINION COLLECTION With purpose of consulting opinion of experts in real estate business to better fulfill master study with topic “Building business strategy of Song Ma Company during 2009-2015” We would like to sent to you with this study form It would be our pleasure to receive your support and opinions Sincerely thanks! Full name: Position Working organization: Please tick appropriate box Accoring to your personal opinion, please assess impact level of following factors toward real estate businessmen: No FACTORS/IMPACT LEVEL A lot Over medium Stable political environment Economic growth Little None Housing and land demand Increasing income per capital Construction technology and equipment Renovation of state governance towards investment Laws and legal documents relating to real estate High risk of financial investment into real estate Complicated and slow land clearance and compensatio 10 International integration with foreign investor to Vietnam 11 Leaders are enthusiastics with long-term vision and have good relationship with authorities 12 Management body are experienced, capably specialized in this area 13 Pretigious trademard in market 14 Management capacity and financial capacity are limited 15 Business and production management 16 Lack of skillfull workers 17 Weak marketing and market development 18 Business source FORM 2: FORM OF EXPERT’S OPINION COLLECTION With purpose of consulting opinion of experts in real estate business to better fulfill master study with topic “Building business strategy of Song Ma Company during 2009-2015” We would like to sent to you with this study form It would be our pleasure to receive your support and opinions Sincerely thanks! Full name: Position Working organization: Please tick appropriate box Accoring to your personal opinion, please assess impact level of following factors toward real estate businessmen: Trademark: No COMPANY Very Rather Normal No Normal No interested interested Thanh Hoa construction General Company Hoang Long construction joint-stock General Company HUD4 joint-stock company Urban infrastructure development General Company Song Ma Company Finance No COMPANY Very Rather interested interested Thanh Hoa construction General Company Hoang Long construction joint-stock General Company HUD4 joint-stock company Urban infrastructure development General Company Song Ma Company Relationship with authorities TT COMPANY Very Rather interested interested Thanh Hoa construction General Company Hoang Long construction joint-stock General Company HUD4 joint-stock company Normal No Urban infrastructure development General Company Song Ma Company Equipment technology: TT COMPANY Very Rather Normal No Normal No interested interested Thanh Hoa construction General Company Hoang Long construction joint-stock General Company HUD4 joint-stock company Urban infrastructure development General Company Song Ma Company Culture of enterprise TT COMPANY Very Rather interested interested Thanh Hoa construction General Company Hoang Long construction joint-stock General Company HUD4 joint-stock company Urban infrastructure General Company Song Ma Company development [...]... advantaged in competition Some basis diversification types are namely Consensus diversification ( participation in a new activity relating to present activity because of similarity among function units in enterprises For example, Philip Morris Tobacco Company diversified by purchasing Miller Beer Company); Corsortium diversification ( participation in a new activity differnt from present activities); width... also makes enterprises ensure quality of products Duc Viet sausage company is an example applying this type of strategy The company has a farm supplying fresh meat for making sausages so quality of its products is always ensured and high Thirdly, enterprises applying unification strategy may implement, cooperate and 7 plan more initiatively and appropriatively in activity succession from materials preparation... Mission is focus and order to use capacity and potentiality, but it also shows what enterprises gain Mission declaration creates basis for planning and are reference for evaluating objectives and strategies 1.3 Analysis of strategies 1.3.1 External Environment 15 1.3.1.1 Macro – Environment Graph 2: Elements of Macro – Environment Culture & Society Economy Popularity & Labour Source Customers Suppliers... attitudes and culture value: - Social attitudes and culture value create partly society > leading consumption culture - Society changing creates opportunities and threats Demography environment Division of demography environment relating to the following elements: - Popularity, - Age structure, - Geography, - Community of peoples, - Income distribution Politics and Law Environment Elements on politics... customers, markets and company capacity Strategy on price leading Enterprises produce products with lower expense than other competitors hence their products are sold at lower prices Applying this strategy enterprises need ignore different markets but pay their attention to supply for customers at medium class Necessary capacity for applying this strategy is special capacity in process of incomes supply... Applying this strategy, enterprises should select markets and supply products appropriately to different markets Necessary capacity and qualification for applying this strategy is special capacity in market research and development Enterprises may select differences in terms of quality, 9 innovation, customer satisfaction Applying this strategy helps enterprises prevent competitors and control prices in... incomes in which productivity increase plays a very important role If other elements unchange, enterprises which have high productivity shall get more advantaged in cost competition Mark & Spensor (M&S) Company is a retail enterprise in England which has close relation with suppliers Moreover, the company does not need advertisements It has source of active staff with high productivity due to its committee... competition advantages with low expense in Mark & Spensor (M&S) Company Product quality always shows implementation result following to product design High quality products may present differences and low expense in comparison with others Qualiy of products plays an important role in getting advantages in competition time In fact, quality is not only the way to gain competition advantages but also the most important... capacity including a very large Disney library, technologies in making films Meanwhile, its company 12 staff was improved and developed They could make special films with lively views that other companies could not do at that time However, core abilities are imitated easily Capacity of enterprises is more difficult to copy because it is not visible Hence, core abilities based on unique capacity is... its financial capacity is limited, investment into its son companies has met difficulties Moreover, technology and management capacity in production and business are not still improved Due to international integration with pressed competition, Song Ma Company need focus more on business and production for making its competitive position in new markets From the mentioned-above reality our group in which