LUẬN VĂN Xây dựng phát tiển chiến lược tai công ty cổ phần Phân đạm Hóa chất Hà Bắc MBA THESIS DEVELOPMENT STRATEGY FORMULATION OF HABAC NITROGENOUS FERTILIZER AND CHEMICAL COMPANY LIMITED (HANICHEMCO) 2011-2020 LIST OF FIGURES LIST OF FIGURES ii LIST OF TABLES v A INTRODUCTION B DEVELOPMENT Figure 1.1: The strategic management process Table 1.1: SWOT Matrix Figure 1.2: The External Environment Table 1.2: The general Environment: Segments and Elements Figure 1.3: The force model of M.E Porter 10 Figure 1.4: Competitor analysis components 12 Figure 1.5: External analyses’ outcomes 13 Table 1.3: Tangible resources 14 Table 1.4: Intangible resources 15 Figure 1.6: Types of business-level strategies 16 Table 1.5: GREAT model 19 Figure 2.1: Top 10 Countries in the 2009 Global Retail Development Index 21 Table 2.1: Selected Economic Indicators of Vietnam 22 Figure 2.2: Internet usage of Vietnam 23 Table 2.3: Forecast of Domestic Demand for Urea by 2015 30 Table 2.4: Capacity of Domestic Fertilizer Manufacturers 31 Figure 2.3: Urea distribution system of HANICHEMCO 31 (Source: Hanichemco’s Third-quarter Sale and Marketing Department report, p23, 2009) 32 Table 2.5: Urea consumed amount of HANICHEMCO from 2006 to 2008 32 (Source: Hanichemco’s Third-quarter Sale and Marketing Department report, p24, 2009) 32 Table 2.6: The amount of coal purchased from 2005 to 2008 34 35 ii Figure 2.4: Coal price (without VAT) between 2005 ÷ 2008 35 Table 2.7: Coal product types 37 Table 2.8: World urea output 38 Table 2.9: Urea price comparison between Ha Bac and Phu My Fertilizer Company (DPM) 40 Table 2.10: Assessing strengths and weaknesses compared to competitors 41 Table 2.11: Quantity of imported DAP fertilizer in Vietnam from 2003 to 2008 42 Figure 2.5: Organization structure 46 Table 2.12: Operating results of HANICHEMCO from 2005 to 2008 47 Figure 2.6: HANICHEMC’s Revenue and Profits from 2005 to 2008 47 Table 2.13: Quantitative matrix with GREAT criteria 63 Table 3.1: Expected production scales of HANICHEMCO 68 All in all, Hanichemco’s total productivity generated from both current and new production lines will be 300,000 tons of liquid NH3 and 500,000 tons Urea 68 Figure 3.1: Waste Treatment system 70 As presented above, most of the tail gases have been taken full use of This will bring about better profits for Hanichemco by selling those products and at the same time reduce the environment treatment cost This will better serve the part of cost leadership in the strategy 70 Additionally, the quality of the urea fertilizers will also be controlled strictly to ensure that the Biuret contents will not go beyond 2% - the level that can harm the environment 70 The overall environment protection system is expected to lower the production cost because the company will not need to pay much money to solve the environment – related problems like what Lam Thao Chemical and Fertilizer company face Additionally, it also helps enhance the company’s images and brand name 70 Figure 3.2: HANICHEMCO brand strategy 72 Figure 3.3: HANICHEMCO new organizational structure for the strategy 74 iii Table 3.4: Total investment of HANICHEMCO 76 (Source: The research group’s Finance and Accounting Proposal) 76 Table 3.5: Expected profit, tax, break-even point, ROI, IRR 77 (Source: The research group’s Finance and Accounting Proposal) 77 Table 3.6: Expected financial resources 77 (Source: The research group’s Finance and Accounting Proposal) 77 Figure 3.5: Roadmap for the implementation of the strategy 78 C CONCLUSION 79 REFERENCES 81 iv LIST OF TABLES Figure 1.1: The strategic management process Table 1.1: SWOT Matrix Figure 1.2: The External Environment Table 1.2: The general Environment: Segments and Elements Figure 1.3: The force model of M.E Porter 10 Figure 1.4: Competitor analysis components 12 Figure 1.5: External analyses’ outcomes 13 Table 1.3: Tangible resources 14 Table 1.4: Intangible resources 15 Figure 1.6: Types of business-level strategies 16 Table 1.5: GREAT model 19 Figure 2.1: Top 10 Countries in the 2009 Global Retail Development Index 21 Table 2.1: Selected Economic Indicators of Vietnam 22 Figure 2.2: Internet usage of Vietnam 23 Table 2.3: Forecast of Domestic Demand for Urea by 2015 30 Table 2.4: Capacity of Domestic Fertilizer Manufacturers 31 Figure 2.3: Urea distribution system of HANICHEMCO 31 (Source: Hanichemco’s Third-quarter Sale and Marketing Department report, p23, 2009) 32 Table 2.5: Urea consumed amount of HANICHEMCO from 2006 to 2008 32 (Source: Hanichemco’s Third-quarter Sale and Marketing Department report, p24, 2009) 32 Table 2.6: The amount of coal purchased from 2005 to 2008 34 35 Figure 2.4: Coal price (without VAT) between 2005 ÷ 2008 35 Table 2.7: Coal product types 37 Table 2.8: World urea output 38 v Table 2.9: Urea price comparison between Ha Bac and Phu My Fertilizer Company (DPM) 40 Table 2.10: Assessing strengths and weaknesses compared to competitors 41 Table 2.11: Quantity of imported DAP fertilizer in Vietnam from 2003 to 2008 42 Figure 2.5: Organization structure 46 Table 2.12: Operating results of HANICHEMCO from 2005 to 2008 47 Figure 2.6: HANICHEMC’s Revenue and Profits from 2005 to 2008 47 Table 2.13: Quantitative matrix with GREAT criteria 63 Table 3.1: Expected production scales of HANICHEMCO 68 All in all, Hanichemco’s total productivity generated from both current and new production lines will be 300,000 tons of liquid NH3 and 500,000 tons Urea 68 Figure 3.1: Waste Treatment system 70 As presented above, most of the tail gases have been taken full use of This will bring about better profits for Hanichemco by selling those products and at the same time reduce the environment treatment cost This will better serve the part of cost leadership in the strategy 70 Additionally, the quality of the urea fertilizers will also be controlled strictly to ensure that the Biuret contents will not go beyond 2% - the level that can harm the environment 70 The overall environment protection system is expected to lower the production cost because the company will not need to pay much money to solve the environment – related problems like what Lam Thao Chemical and Fertilizer company face Additionally, it also helps enhance the company’s images and brand name 70 Figure 3.2: HANICHEMCO brand strategy 72 Figure 3.3: HANICHEMCO new organizational structure for the strategy 74 Table 3.4: Total investment of HANICHEMCO 76 (Source: The research group’s Finance and Accounting Proposal) 76 Table 3.5: Expected profit, tax, break-even point, ROI, IRR 77 vi (Source: The research group’s Finance and Accounting Proposal) 77 Table 3.6: Expected financial resources 77 (Source: The research group’s Finance and Accounting Proposal) 77 Figure 3.5: Roadmap for the implementation of the strategy 78 vii TABLE OF CONTENTS LIST OF FIGURES ii LIST OF TABLES .v A INTRODUCTION 1 Rationale Objectives Methodology .3 Structure of the research B DEVELOPMENT CHAPTER I: THEORETICAL BACKGROUND 1.1 Definitions of strategy and strategic management process .5 1.2 SWOT analysis – the tool to formulate the strategy 1.2.1 External Environment Analysis 1.2.1.1 Macro environment Analysis 1.2.1.2 Industrial analysis and Michael Porter’s competitive five forces 1.2.1.3 Competitor analysis .11 1.2.2 Internal Environment Analysis 13 1.3 Business-level Competition Strategies 15 1.3.1 Cost leadership strategy .16 1.3.2 Differentiation Strategy 17 1.3.3 Focus Strategies 17 1.3.4 Integrated Cost Leadership/ Differentiation Strategy .18 1.3.5 Select methods of assessment strategies 19 20 CHAPTER II: AN ANALYSIS ON THE CURRENT SITUATION OF HANICHEMCO 21 2.1 Current situation of macro and industrial environment 21 2.1.1 Macro economic conditions 21 2.1.1.1 Economic .21 2.1.1.2 Technological 23 2.1.1.3 Political-legal .25 2.1.1.4 Demographics: 26 viii 2.1.1.5 Global environment 27 2.1.2 General industry situations 28 2.1.2.1 Agricultural Production Situation: 28 2.1.2.2 Domestic fertilizer manufacturing capacity: .30 2.1.2.3 Industry Competitive forces 31 2.2 Current situation of HANICHEMCO 44 2.2.1 An overview on HANICHEMCO 44 2.2.2 HANICHEMCO’s overall situation 46 2.3 HANICHEMCO’s internal analysis 48 2.3.1 Company’s main activities: 48 2.3.2 Evaluation company’s strengths and weaknesses: 54 2.4 SWOT Matrix analysis 55 2.5 Options combined strengths, weaknesses, opportunities and threats: 57 CHAPTER III: FORMULATION OF DEVELOPMENT STRATEGY FOR HANICHEMCO FOR PERIOD 2011-2020 65 3.1 HANICHEMO’s visions/missions 2011-2020 65 3.2 Selecting development strategy for HANICHEMCO 2011-2020 65 3.3 Solutions for the implementation of the strategies 67 3.3.1 Expanding manufacturing activities, modernizing technologies with cost management activities 67 3.3.3 Diversifying products 70 3.3.4 Branding 71 3.3.4 Improving the current organizational structure 73 3.3.5 Human resource development (HRM) Strategy 75 3.3.6 Financial Resource Preparation 75 3.4 Roadmap for the implementation of the strategy 77 C CONCLUSION 79 REFERENCES 81 ix A INTRODUCTION Rationale Within the last fifteen years, the world has witnessed three great financial crises, namely the 1994 Mexico’s currency crisis, the 1997-1998 Asian crisis and the notyet-over 2008 financial global crisis According to World Bank’s statistics, “43 poor countries are suffering the consequences of the global recession”1 In that situation, Vietnam still remains one of the fastest-growing economies in the world, averaging around 8% annual gross domestic product (GDP) growth from 1990 to 1997 and 6.5% from 1998-2003 From 2004 to 2007, GDP grew over 8% annually Foreign trade and foreign direct investment have improved significantly From 1990 to 2005, agricultural production nearly doubled, transforming Vietnam from a net food importer to the world's second-largest exporter of rice The average Vietnamese savings rate is about 30% Inflation in 2007 was 7.3% but was in the double digits and approaching 30% year-on-year by August 2008 The 2009 first quarter’s GDP was 3.1% against same period in 2008, the lowest growth quarter in recent years, but in second quarter GDP growed by 4.5% and in third quarter by 5.8% Generally in months, GDP increased by 4.6% against same period in 2008, of which the agriculture, forestry and fishing rose by 1.6%; the industry and construction by 4.5% (industry by 3,3% and construction with high increase of 9.7%); the service by 5.9%.3 Vietnam is still considered as an agriculture-based country with more than 60% total workforce working in the agricultural sector, which generates 20% of GDP The productivity of the 60% is only one third as against that of the rest working in other sectors4 However, the country is getting more and more populated with 85.789.573 people, making the country the most 3rd populous country in Asean and http://www.worldbank.org/financialcrisis/bankinitiatives.htm http://www.gso.gov.vn/default_en.aspx?tabid=622 http://www.gso.gov.vn/default_en.aspx?tabid=501&thangtk=09/2009 http://www.vneconomy.vn/20090813094713956P5C11/co-cau-lai-nhan-luc-nong-nghiep.htm Product Before expansion After expansion Increment (10,000t/a) (10,000t/a) (10,000t/a) Ammonia 10.8 30.0 19.2 Urea 18.0 50.0 32.0 Table 3.1: Expected production scales of HANICHEMCO (Source: The research group’s Finance and Accounting Proposal to Hanichemco’s Management Board) In an attempt to save energy and be friendlier to the environment, the 4.0MPag shell pulverized coal gasification technology is adopted All the coal gases will be primarily treated once its heat has been exerted and washed Furthermore, the main materials used to produce urea will be powder coals which will make the production cost 41% lower as against the previous technology due to lower input cost Specifically, the former production line will cost around (0.80 ton x 2,200,000 VND/ton) 1.760.000 VND for as against that of the new production line at (0.95 ton x 1,100,000 VND/ton) 1,045,000 VND for the same unit of product This will help lower production cost and protect the environment A part of the tail gas will be pumped to the new production line to synthesize into NH3 with the productivity of 192 thousand tons/year Similarly, the former production will also use the tail gas to produce around 180.000 tons/year In all, the total productivity of urea will be 300.000 tons/year together with 180.00 tons of NH3 The rest of the tail gas will be pumped to the current production line After the CO being treated to separate S, the additional process will help produce 108 tons of NH3/year The current production line will continuously contribute 180,000 tons of urea and 108 tons of NH3 All in all, Hanichemco’s total productivity generated from both current and new production lines will be 300,000 tons of liquid NH3 and 500,000 tons Urea 68 Therefore, the choice of this technology has achieved both lower price and environmental friendly objectives  New CBM software application to better customer service Taking advantage of the technological potentials, a online channel will be better used for marketing and after - sale service especially with the application of a Customer Relationship Management software to: • Get a 360° holistic view of all prospects & customer data and interactions • Up-sell & cross-sell with powerful automated CRM tools • Real-time visibility into sales pipeline, bookings & all revenue transactions • Forecast more effectively and accurately using sales history data • Slash technology costs and complexity associated with managing hardware, software, upgrades, integrations, and patches  Cost management activities The input cost will be managed properly with such methods as bidding, competitive offering etc in order to select the companies with the best possible price and quality Secondly, the inputs reseves will also be calculated in an attempt to ensure the sufficient materials and efficiency The inventory time should also be reduced to save the money for the company Thirdly, the leftover materials will also be recollected and reused to save cost for the companies 3.3.2 Environment Protection Measures 69 To better be environment friendly, Hanichemco make very clear plan of actions for the treatment of dust, water waste and other kind of tail gas for different process of the technology as follow: Waste Treatment System Gas pollutants Solid waste Liquid waste Noise Pollution Figure 3.1: Waste Treatment system (Source: The research group’s proposal to Hanichemco’s Board of Management) As presented above, most of the tail gases have been taken full use of This will bring about better profits for Hanichemco by selling those products and at the same time reduce the environment treatment cost This will better serve the part of cost leadership in the strategy Additionally, the quality of the urea fertilizers will also be controlled strictly to ensure that the Biuret contents will not go beyond 2% - the level that can harm the environment The overall environment protection system is expected to lower the production cost because the company will not need to pay much money to solve the environment – related problems like what Lam Thao Chemical and Fertilizer company face Additionally, it also helps enhance the company’s images and brand name 3.3.3 Diversifying products Recently, the domestic needs for CO2, H2O2 is going up due to the increasing 70 demands in the food industry, the oil industry, and the chemical industry Annually, Vietnam has to import 10,000 tones/year H2O2 to satisfy the increasing demands Vietnam has not been able to produce H2O2 due to the limited inputs The company sees it as a very profitable product given the context that Phu My Fertilizer Company makes Urea out of natural gas so it is in great need of CO2 while CO2 made from sugar cane or cassava is of very low productivity and harvest dependant The generation of CO2 from oil is very unproductive and costly The Urea production from coal generates high amount of CO2, H2O2 which then emits to the air As presented above, HANICHEMCO is now contacting with other industrial gas companies, such as DongAnh Gas Company, to sell its products HANICHEMCO’s Hanichemco’s current CO2 product is quite well-known in the market It is expected that the extended manufactory will raise the current productivity from 100,000 ton/year to 300,000 ton/year HANICHEMCO is expected to generate around 20,000 tons of H2O2 as a byproduct of its new Urea production line With the current production line, it cannot collect H2 to generate H2O2 CO2 and H2O2 are the two byproducts that can both help the company increase its profits and then better protect the environment Furthermore, they will act as the cushion part fỏ the companies when Urea business faces difficulties 3.3.4 Branding As the integrated cost leadership/differentiation strategy has been chosen, branding is now crucial for HANICHEMCO to further brand its products and services At present, Hanichemco is ranked 111th among the 200 top Vietnamese brands 38 38 Source: http://www.brand.vn/top200.htm 71 However, it stills stands at much lower ranks as against others competitors such as Lam Thao Fertilizers and Chemicals Company, which is ranked 65 th in the list Surprisingly, PetroVietnam Fertilizer and Chemicals Co is at 135, Southern Fertilizers Company stands at 160th If we a quick Google search for the name “HANICHEMCO”, 1580 results will be found out within 0.43 second In a similar action, if we search for the name “Dam Phu My” (Phu My fertilizer), within only 0.26 second, 3.950.000 results are found A quick search may be evedent enough to suggest that Phu My Fertilizer has wider internet coverage and probably a more popular image Therefore, it is first advisable for HANICHEMCO to develop a brand strategy which shows a consistent image via the company’s websites, sales literature and tools, messaging, corporate identity, naming and most importantly a customer relationship management program for the period 2010-2020 as shown in the following graph: Figure 3.2: HANICHEMCO brand strategy (Source: Adapted from http://www.marketingmo.com/strategic-planning/brand-strategy/) 72 In other words, the overall image of the company conveyed through the above mentioned tools should demonstrate that HANICHEMCO is environmental friendly, socially responsible and the largest in the North and North central of Vietnam Additionally, the company will also develop a brand loyalty by using the data from the customer relationship management (CRM) program The CRM will help HANICHEMCO to better trace its customer's need and offer exactly what they want When the customers’ need is fulfilled, they will perceive HANICHEMCO brand in a positive manner Furthermore, the customer service will also be improved to deepen the brand loyalty The services that HANICHEMCO can provide to its customer include technical support for the distributors, capacity building, especially, and marketing capacity for the wholesalers so as to better reach the end-users Last but not least, to sustain brand loyalty, HANICHEMCO will maintain offering good quality products and services at reasonable price Continuous feedbacks from customer will also be included as part of the nonstop brand improvement Brand loyalty is expected not only earns HANICHEMCO immediate profit but maximize its revenue in the long run 3.3.4 Improving the current organizational structure It is critical to match organizational structure to the firm’s strategy Hanichemco have identified its weaknesses of the current organizational structure as too topdown and quite vertical The information flow is single directional from the top management down to the lower level without any feedbacks moving from the lower level This fact may prevent the flow of ideas that can better help the company to achieve its targets of lowering the cost and differentiating its products and services 73 There is not a department controlling the overall environmental regulations compliance Following Hanichemco’s new strategy, those two weaknesses will be addressed A new organizational structure is put forward to better serve the integrated cost leadership/differentiation strategy as follows: Figure 3.3: HANICHEMCO new organizational structure for the strategy (Source: The research group’s proposal to Hanichemco’s Board of Management) In the new structure, Hanichemco will be able to following things: o Marketing is the main function for developing the brand o Environment control is emphasized o Most functions are decentralized, but environment and marketing may have centralized staffs that work closely with each other o Formalization is limited so that new product ideas can emerge easily and change is more readily accomplished o Overall structure is organic; job roles are less structured 74 3.3.5 Human resource development (HRM) Strategy HANICHEMCO understands to the full that the HRM Strategy needs to be aligned with the overall organizational goals Therefore, HANICHEMCO has the plan to integrate decisions about people with decisions about the results that it is trying to obtain HANICHEMCO is to integrate HRM into the agency planning process, emphasizing HR activities that support mission goals, and building strong HR/management relationships HANICHEMCO’s HMR strategy will be realized via three stages The first stage begins with basic legal compliance This means Hanichemco needs to comply with the Government laws and regulations on compensation and benefits for its laborers The second stage should be developed efficient programs on the basis of the rationalized processes such as time and motions processes to enhance the productivity and lower production cost The third stage involves effective programs to provide information to laborers, consult them etc to engage their attention and ideas in the decision process Once the laborers feel that their voices are listened, they will actively contribute to the development of the organization This strategy aims at enhancing Hanichemco’s social image and helps lower production costs as well as creating differentiation 3.3.6 Financial Resource Preparation The total investment to implement the strategy is expected to include the total infrastructure investment, the interest rate, the investment for the treatment system and that of the human resource development and brand strategy and mobile capital The investment for the infrastructure development includes the expense on manufactory construction, procurement of equipments, installation expense, 75 compensation for site clearance, resettlement expense, consultation fee, other miscellaneous and investment provisions The investment for treatment system, in addition to the construction of the treatment systems, includes also the Operation and Maintenance costs The investment for the human resource management strategy includes, in addition to the compensations required by the laws, expense for training and recruitment of new staff Brand strategy is expected to cost a relatively significant amount In all, the total investments can be broken down into following items: Ref No Item 1.1 1.2 1.3 Total investment Basic Infrastructure development Building Equipments Compensation for site clearance and 1.4 1.5 1.6 1.7 resettlement Administration Consultation fee Miscellaneous Preventive provisions Interest Rate Mobile investment Operation and Maintenance Cost for the treatment systems Brand Development Campaign Human Resource Development Amount (USD) 739,693,800 342,622,449 70,980,602 190,620,580 3,302,461 993,752 36,817,264 6,990,082 32,917,707 38,042,693 11,710,511 859,756 1,256,998 2,578,945 Table 3.4: Total investment of HANICHEMCO (Source: The research group’s Finance and Accounting Proposal) Expected profit and tax, break-even point, ROI, IRR would be: Ref.No Indicators Annual Pretax Profit Annual After-tax Unit USD USD Value 42,370,477 30,761,866 Note 76 Profit Return on investment (ROI) IRR Break-even point % 10,8% % 11.52% % 79.64% Fourth year after operations Table 3.5: Expected profit, tax, break-even point, ROI, IRR (Source: The research group’s Finance and Accounting Proposal) Financial resources for the strategy will be broken down as follows: 22% of the total investment will be covered by HANICHEMCO Ref No Source of Funding Hanichemco fund Vietnam Development Ratio 22% 65% Period 10 years Interest Rate 9% (in domestic Bank currency) 7.5% (in foreign Other commercial 13% 10 years currency) 7.85% banks Table 3.6: Expected financial resources (Source: The research group’s Finance and Accounting Proposal) 3.4 Roadmap for the implementation of the strategy 77 Strategy Formulation (2010) Resource Preparation (2011) Strategy Implementati on (20112014) Strategy Implementation (2014-2019) Overall Strategy Implementation Evaluation SWOT Analysis, Retraining Building the Operating the new Evaluating the Developing current HR manufactory manufactory overall strategy strategy, Recruitment Recruiting and Maintaining the implementation Implementation Getting loans train 148 workers environment against the set plan, estimated Preparing internal to prepare for the standards Recruiting objectives and necessary finance resources new manufactory and Training 50 indicators Revising and marketing and after- Developing the Updating the sale staff Operating the new Developing necessary strategy Implementing the manufactory indicators to processes and Upgrading and brand strategy evaluate the procedures developing the Revising and Strengthening the necessary Updating the brand identity strategy resources, success of strategy Revising and processes and implementation Updating the procedures strategy Occupying 30% Occupying 50% of strategy for the new of the north and the north and north phase north central central market market Figure 3.5: Roadmap for the implementation of the strategy Preparing the new 78 C CONCLUSION Chapter 1, which lays the foundation for the whole study, includes definitions of strategy and strategic management process which specifies that the internal and external analysis should be seen as inputs for the development and implementation of the strategy Theories on such tools as SWOT analysis, Michael Porter’s five competitive forces are also presented as the ground for chapter 2’s analysis Chapter of the study first investigates the external environment including the macroeconomic and the industry conditions which specify clearly the increasing future needs for Urea and other chemical products, the internet connections of the young population structure, the customer’s price sensitivity The threats are identified such as increasingly competitive pressure from Chinese illegal urea imports and domestic competitors such as Phu My Fertilizer Company Furthermore, the bargaining power of the supplier is quite significant due to the monopoly it enjoys Two more powerful new entrants expected to join the market in 2011 also bring in more competition Then, more analysis has been carried out to better identify the company’s strengths and weaknesses The weaknesses of the company have been found in the fact that the company current does not have a long-term strategy The company activities are just mainly reactive to the situation on a year to year basis The organizational structure is highly hierarchy with limited flow of information, obsolete production line and low brand awareness as against its main competitor, Phu My Fertilizer and Chemical Company The strengths of the company include its quite strong financial shape, perceived high quality products and historical brand Chapter matches the strengths with the opportunities to mitigate the weaknesses and faces the threats by the selections of the integrated cost leadership and differentiation strategy Specifically, within the next 10 years 79 (2011-2020), HANICHEMCO will become a eco-friendly, socially responsible nitrous chemical and fertilizer producer which occupy 50% of the market share in the North and North central of Vietnam The strategy to implement that is to innovate continuously technology and develop quality human resource development aiming toward raising the product’s competitiveness by lowering the product’s price, improve the manufacturing capacity to more than 500.000 tons of Urea/year Despite the fact the recent Global Summit on Climate Change held in Copenhagen has witnessed the refusal of major nations such as China, India and America, Hanichemco still insists in its strategy of environment friendly products There are several reasons for this, including cost saving for the company because the tail gases can be used to turned into profitable products Furthermore, Hanichemco has learnt the environment lessons from Lam Thao’s Chemical and Fertilizer company and Vedan Seasoning Company, both of which have had to face with court judges for unfriendly environment businesses Thus, the company is to develop a environmental friendly and socially responsible brand in an attempt to better maintain the customers’ trust and relationship and sustainable prestige and finance in medium and long term Together with the vision and the strategy, the solutions to implement the strategy has also been outlined with a restructure of the organization, extension of the current manufactory to improve the capacity, adopt of new production technology and software to move forward a greener and more customer-oriented brand A financial plan for the whole strategy has been formulated with specific sources of finances At the end of the chapter, a road map for the implementation of the strategy has been set out However hard the group has tried to fulfill the research, it cannot cover every aspects of the issues Suggestive topics for further study would be the development of a project on the extension of the manufactory or the feasibility study of urea computerized production line in 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quản lý kinh doanh NXB Chính trị quốc gia Hà Nội 1996 12 Porter, M.E (1980) Competitive Strategy, Free Press, New York, 1980 13 2008 Annual Report, Ministry of Trade and Industry, GSO Publishing House 14 Vietnam Infrastructure Report Q3 2009, Business Monitor International, June 2009, online store http://www.reportlinker.com/p0135270/VietnamInfrastructure-Report-Q3-2009.html 81 HANICHEMCO’S RESOURCES: Hanichemco 2008 Finance and Accounting Report Hanichemco 2008 Sale and Marketing Report Hanichemco’s 2008 Brochure WEBSITES http://www.worldbank.org/financialcrisis/bankinitiatives.htm http://www.gso.gov.vn/default_en.aspx?tabid=622 http://www.gso.gov.vn/default_en.aspx?tabid=501&thangtk=09/2009 http://www.vneconomy.vn/20090813094713956P5C11/co-cau-lai-nhan-luc-nongnghiep.htm http://www.vneconomy.vn/20090813080916457P5C11/dan-so-viet-nam-dat-gan86-trieu-nguoi.htm http://www.laodong.com.vn/Home/Bao-ve-nghiem-ngat-dien-tich-dat-tronglua/20085/87478.laodong http://www.markintell.com/swot-analysis-tools-templates/ https://www.cia.gov/library/publications/the-world-factbook/ http://www.vinachem.com.vn/ViewTinThiTruongDetail.asp? ThitruongID=7607&cateID=1 http://www.fertilizer.org/ifa/Home-Page/FERTILIZERS-THE-INDUSTRY/Marketoutlooks.html http://tintuc.xalo.vn/2067284570/work_starts_on_ca_mau_fertilizer_plant.html http://www.highbeam.com/doc/1G1-177312075.html 82 [...]... when customers value differentiated features more than they value low cost In order to obtain a differentiation advantage, a company must raise performance of product and service and create sustainability through customer perceptions of uniqueness Therefore, a company will be able to raise the customer’s loyalty to the products and feel reluctant to switch to other non-unique product or service 1.3.3... flexibility which involves flexible manufacturing systems (FMS), adaptable information network and total quality management systems (TMQ) Flexible Manufacturing Systems is characterized by computer-controlled processes to produce a variety of products in moderate, flexible quantities with a minimum of manual intervention This may help a company eliminate the “low-cost-versus-wide product-variety” tradeoff... become an attractive market for global retail and consumer good industry Ranked #6 by A.T Kearney in its Global Retail Development Index, Vietnam remains among the most exciting opportunities despite the current decline in exports resulting in the GDP declines Figure 2.1: Top 10 Countries in the 2009 Global Retail Development Index (Source: 2009 A.T Kearney Global Retail Development Index report28 ) Vietnam... report28 ) Vietnam is on the radar screen which is most considerable for all retailers over the world Additionally, Vietnam is on the peaking period in the GRDI window of opportunity analysis29 2.1.1.1 Economic 28 http://www.atkearney.com/images/global/pdf/2009_Global_Retail_Development_Index.pdf 29 Source: 2009 A.T Kearney Global Retail Development Index report 21 Economic indicators 2006 2007 2008 GDP growth... agricultural area are being turned into urban areas and industrial parks, food security is seriously threatened In order to overcome the situation, the Resolution of the Communist meetings of the Agriculture and Rural Development Ministry has set the objectives of “developing a commodity-oriented, diversified, sustainable agriculture taking full advantage of the competitive advantages and advanced... above-average returns However, the circle does not just stop there Continuous feedback is extremely important to further enhance the inputs quality which in turns betters the mission and the process repeated itself at a higher level It is this continuity that brings about the sustainable competitive 6 advantages and above-average returns Obviously, the external and internal analysis plays crucial roles in developing... aiming toward better after sale service It can also use this channel to popularize strongly its brand name and cross selling Energy availability/cost: The average price of electricity is VND 862 per kWh, nearly $0.049 per kWh, in 2009 Natural resource availability: The main natural resources of Vietnam are; phosphates, coal, manganese, bauxite, chromate, offshore oil and gas deposits, forests, and hydropower... it intends to perform activities differently or perform different activities as compared to its rivals Hitt, A, M; Ireland D.R and Hoskisson E.R suggests following types of businesslevel strategies shown in the following graph: Figure 1.6: Types of business-level strategies21 1.3.1 Cost leadership strategy Cost leadership strategy is defined as “An integrated set of actions taken to produce goods or... M; Ireland D.R and Hoskisson E.R, slide 12, chapter 4 16 If a company follows this strategy, there are certain costs saving actions required to be follow First, the facilities must be built in a efficient manner This means the facilities could help save resources and generate higher productivity Second, the production and overhead costs should be tightly controlled while the costs of sales, R&D and... resources …” Consequently, one of the technological inputs that help partly improve the productivity is to further develop the domestic fertilizing sector Being one of the leading fertilizer and chemical producers in the country, Habac Nitrogenous Fertilizer and Chemical Company Limited (HANICHEMCO) certainly plays a very important role in contributing to the realization of the vision of the whole industry