Group 13 DISSERTATION MBA BUILDING BUSINESS STRATEGY FOR DUC LONG JOINT STOCK COMPANY Group 13 HANOI – 2011 TABLE OF CONTENT INTRODUCTION 1.THE NECESSITY TO CHOOSE RESEARCH TOPICS 2.STUDY SUBJECTS 3.PURPOSE OF RESEARCH 4.RESEARCH METHODOLOGY 5.SCOPE OF RESEARCH 6.THE STRUCTURE OF THE SUBJECT CHAPTER I RATIONALES FOR BUILDING ENTERPRISE’S BUSINESS STRATEGY .5 1.1OVERVIEW ABOUT BUSINESS STRATEGY 1.2PROCESS OF BUILDING BUSINESS STRATEGY 1.3 ANALYSIS INSTRUMENTS OF BUSINESS STRATEGY 14 CHAPTER II ANALYSIS OF RATIONALES FOR BUILDING BUSINESS STRATEGY OF DUC LONG JOINT STOCK COMPANY .20 2.1INTRODUCTION TO DUC LONG JOINT STOCK COMPANY (DLC) 20 2.2 ANALYSIS ON BUSINESS ENVIRONMENT OF DLC 21 2.3GENERAL EVALUATION OF ENVIRONMENTAL FACTORS AND SWOT ANALYSIS 43 CHAPTER III SELECTING STRATEGY AND IMPLEMENTATION SOLUTIONS FOR 47 3.1MISSION, VISIONS AND STRATEGIC OBJECTIVES .47 3.2STRATEGY SELECTION PERIOD 2011 – 2020 OF DLC 49 3.3STRATEGIC SOLUTIONS 51 3.4STRATEGIC ROADMAP 60 CONCLUSION 62 Group 13 INTRODUCTION The necessity to choose research topics After six years of construction and development, the Duc Long Corporation (DLC) has gained encouraging achievements From an original base of polytechnic technology burned brick manufacturing, now DLC has become one of the providers of semi-flexible technology burn bricks with a top quality production in Bac Giang, and Bac Ninh The being-built factories of aerated autoclaved concrete (AAC brick) of the company promised to elevate DLC to a new position in producing construction materials in general and environmentally friendly bricks in particular In the context of economic integration, the level of competition among enterprises increased fierce, many challenges posed to small businesses in general, and to DLC in particular With a vision of striving to become one of 10 manufacturers and distributors of environmental friendly construction materials in Vietnam in the coming years, DLC has to apply scientific technology and scientific management in accordance with practical conditions of the DLC Building a business strategy is the most important and practical thing to to get the DLC-oriented platform for building process and development of the company in the present and future After attending the program Master of International Business Administration from the University Center Griggs and ETC - Hanoi National University, together with the caring guidance of Prof Ngo Kim Thanh, we, the members of Group 13 in M1009 class, implement the project "Building a Business Strategy for Duc Long Corporation period 2011 to 2020" to help DLC select an appropriate business strategy platform based on the knowledge and socio-economic reality of the country as well as specific operational context of the current DLC Study subjects Subjects of research topics are business operations analysis and competitors analysis to form business strategies for the DLC That helps DLC make appropriate business strategy in the period 2011 - 2020 to realize its vision Group 13 Purpose of research The purpose of the research is to build business strategy for the Duc Long Joint Stock Commpany period 2011 - 2020 and to propose solution to implement strategies that help DLC become of 10 leading manufacturers and distributors of environmental friendly building material products in Vietnam in 10 years Research Methodology We use the methods of analysis and synthesis, and combine with the matrix tool that has been learnt in other subjects: strategic management, marketing management, corporate finance, production management, etc, applying to study the characteristics of business, financial data of the DLC and some competitors in the industry We also use the techniques of inside - outside (IE) environmental analysis and SWOT analysis for the DLC Scope of research The scope of the research is limited to the industry of materials production; simultaneously, the data analyzed is mainly from the DLC and from some companies that are direct competitors with the DLC Therefore, the scope of the projects are applicable in a particular business This is limited to this topic and we expect the scope can be extended further to other economic sectors of our country in the near future The structure of the subject Topics are laid out according to the main contents as follows: Introduction Chapter I Rationale for building business strategy Chapter II Analysis of rationales for building strategy of Duc Long joint stock company Chapter III Selecting strategy and implementation solutions for Duc Long Corporation Conclusion References Appendix Group 13 CHAPTER I RATIONALES FOR BUILDING ENTERPRISE’S BUSINESS STRATEGY 1.1 Overview about business strategy According to Alfred Chandler, "Strategy is the determination of goals and long-term basic objectives of the enterprise, identify actions and allocate the resources necessary to achieve that goal” In the view of unity, "Strategy is the art of coordinating the activities and control them to achieve long term goals of the enterprise." Chandler considered strategy involves to setting basic long-term goals of the business and selecting the courses of action and allocate the necessary resources and implement those goals In business, "Strategy is the art of design, and organizational means to achieve long term goals of the business and relationship with the change of business environment and competitiveness." A business strategy has the following basic characteristics: - Business strategy defined the basic objectives and business direction of the business in each period - The orientation of the strategy to ensure business continuity and development firm in the business environment is constantly fluctuating - Business strategy to ensure maximum mobilization and optimal combination of extraction, use of corporate resources in the present and future to promote the advantages and seize the opportunity to gain in competition - Business strategy of the business are reflected throughout the process continuously - Business strategy always thought offensive, winning in the marketplace business - Business strategies are often built in a long period (3, 5, 10 years) Develop business strategies have special importance for the survival and development of enterprises, which reflected the following aspects: Group 13 - Business strategy to help businesses identify the purpose, its direction as a basis, the guideline for all production and business activities of enterprises - Business strategy to help businesses understand and take advantage of business opportunities, and proactive measures to overcome the risks and threats in the competitive marketplace - Business strategy to contribuites to improve the efficient use of resources, enhance the competitive position of businesses to ensure sustainable development of enterprises - Business strategy creates a solid basis for the proposed policies and decisions on production and business in accordance with the fluctuation of the market 1.2 Process of building business strategy Business strategy is built according to a general process as below Table 1.1: Road map to create business strategy Corporate functions, missions and strategic objectives (1) Analysis on internal factors of company (S,W) (3) Analysis on business environment (O, T) (2) Strategy selection (4) Strategy at company level (5) Strategy at business and function’s level Strategy implementation (6) Test & evaluate results (7) Feedbacks Source: Associate Professor, Doctor Ngo Kim Thanh Group 13 1.2.1 Determine mission and strategic objectives 1.2.1.1 Determine business mission Drucker said developing a clear business mission is "responsibility of strategists" Nature of business tasks can be expressed through competitive advantage or disadvantage of the company The good mission statement is a necessary condition for preparation, implementation and evaluation strategies The mission statement may vary in length, content, size and unique features, but the report should be effective management components and corresponding questions that a mission statement needs to be answered are: (1) Customers: Who are the consumers of the company? (2) Products or services: What are products and services of the companies? (3) Market: In which market, does the company compete? (4) Technology: Technology is a leading concern of the company or not? (5) Interest in a matter of survival, growth and profitability: the company is tied to economic goals or not? (6) Philosophy: What are the basic beliefs, values, aspirations and priorities of the company's philosophy? (7) Self-assessment: What is special power or major competitive advantage of companies? (8) Concern for public image: is the image of public concern is primarily for business or not? (9) Concern for employees: What is the company's attitude to the staff like? 1.2.1.2 Missions Mintzberg defines a mission as follows: "A mission for the basic functions of a social organization in terms of aspects of goods and services that organization produced to serve its customers" Mission is the message expressed the core values of the business It expresses the importance, the contribution of business in terms of business and life, Group 13 showing the motto of the enterprise, the location of the business marketplace and what the business is committed to comply Mission Statement should include a concise but meaningful platform that is dynamically and display long-term stability 1.2.1.3 Vision Vision is a message specifying mission statement goals that motivate and highlight the need for improvement that is vital for businesses; it creates confidence in the future of business and it aims to turn the impossibleness into possibleness 1.2.1.4 Setting strategic objectives Setting goals is the transformation of vision into specific performance that can be measured The purpose of the establishment of objectives: Transforming the vision into specific operational objectives; create standards to evaluate and monitor the activities and, making the company to be creative, driven and focus on its action plan Characteristics of goal setting are: giving commitment to achieve specific operational objectives and the results must be made over time in terms of quantity and types 1.2.2 Analysis and assessment of external environment 1.2.2.1 Macro environment analysis – PEST model Analysis of the macro environment is aimed at identifying the changes, the trends expected from the elements of the external environment With the focus on the future, analyzing the external environment allows enterprises to realize the opportunities and threats Political factors - the law (P) The political factors and laws have a significant impact on the level of opportunities and threats from the environment The main thing in this segment is how business can influence government and how government affects them This factor is constant change and will significantly affect the competition Economic factors (E) Group 13 The state of macro-economic environment determines the health and prosperity of the economy, causing impacts to businesses and industries Economic environment is the nature and direction of the economy in which businesses understand relativity The economic impact of a business can change the ability to create value and its income Four important factors of the macroeconomic environment include: economic growth; interest rate, exchange rate and inflation Cultural factors - social (S) The scope of the impact of cultural factors - society is often very broad, "it defines how we live to work, production and consumption of products and services." Thus an understanding of cultural - social facilities will be very important for managers in the strategic management process in organizations The environmental aspects of social cultural forms influence significantly to business activity Technology factor (T) This is the kind of factors that has significant influence, directly to strategic business areas, industry and business Changing technology can make existing products become outdated overnight, and it can generate a series of new product capabilities Thus, changes in technology, including creation and destruction, both opportunities and threats Science and technology are key competitive factors, and the essence of the business Therefore, analyzing and judging the change of technology is very important and urgent The strategy needs to pay constant attention to changes in investment and technological progress Natural factors (+) Geographical location, climate, topography These are very important factors directly affect the process of production and business of enterprises Unpredictable changes in climate sometimes threat to businesses their services are seasonal Infrastructure availability is also considered a part of the natural factors affecting important to the organization of work, costing the business Group 13 1.2.2.2 Industry environment analysis Michael E Porter, professor at Harvard School of Business Administration, has a framework to help managers identify opportunities and risks that businesses face in an industry Framework of Michael E Porter is called the five forces model of competition, expressed by the following diagram: Figure 1.1 forces model of Michael E Porter Threats of new entrants Bargaining power of suppliers Competitive rivalry within an industry Bargaining power of customers Threat of substitute products Porter pointed out that the stronger the force, the more limited ability of existing firms to raise prices and earn higher profits According to Porter's model, strong competitive forces can be seen as a threat, because it will reduce profits The strength of five competitive forces may change over time, as industry conditions change The task set for the administrator is to be aware of the opportunities and risks that changes in competitive forces will bring, thereby building appropriately adaptive strategy Competitive pressures from existing competitors If the weaker competitors, companies have the opportunity to raise prices and earn greater profits Conversely, when the competition is strong, the competition in price is significant, and all price competition will lead to injuries Therefore, strengthening competition among enterprises will create a strong threat to profitability Competition among firms in an industry often includes contents such as: industry competitive structure, industry’s demand, and barriers to leav the industry 10 Group 13 Important factors Replacable strategy W # SO1 20 Distribution system was inadequate for demand in future output AS TAS Total attractive points 3.2.1 SO2 AS SO3 TAS AS TAS 203 212 Making decision to select strategy Pursuant QSPM matrix, the total attraction of investment strategies – expanding and improving production capacity - has the highest score (212 points); and the company decided to choose this strategy to implementation 3.2.2 Content of DLC’s investment strategy Investment strategy to expand the scale and raise production capacity of the DLC content are to build more factories and import more machinery and equipment for production of 03 new major product lines are semi-flexible burned brick, AAC brick and concrete unburned brick Implementing this strategy, the DLC can mobilize available resources (human, financial, infrastructure, business advantage ) to create new factories, increase potential production business and create future economic value, create jobs, improve the lives of company employees, contributing to the state budget and being able to participate actively in social activities - community 3.3 Strategic solutions 3.3.1 Financial solutions To meet the demand for capital investment projects, reducing the risk of inflation and interest rates, DLC should make some concrete solutions as follows: 3.3.1.1 Having roadmap to invest into specific projects, not doing spreadingly Efficient projects and available capital are invested first; after generating stable revenue, then will continue to invest in next projects Thus, projects are not invested and executed at the same time but implement with a clear roadmap and one by one, to minimize the risk of lack of funding 51 174 Group 13 3.3.1.2 Maximize use of available resources Develop financial plans in the direction of the initiative to maximize use of available resources to invest, limiting the use of debt instruments to minimize the risk of inflation and interest rates as well as pressure on cost of investment 3.3.1.3 Preferred loans of the Goverment Taking advantage of the internal financial and accounting policies and priorities of the state for projects of Group A (special investment incentives) to access funds at low interest rate incentives, long-term loans Pursuant to Decree No 108/2006/ND-CP dated 22/09/2006 of the Government shall detail and guide the implementation of some articles of the Investment Law and Decision 567/QD-TTg on 28 / / 2010 of the Prime about approval development program without heating to construction materials in 2020, the DLC projects are enable for capital, infrastructure and tax incentives Thus, DLC may ask the Vietnam Development Bank (VDB) for preferred loans with both good interest rate and term 3.3.1.4 Ask for funding mechanisms of environmental organizations Promoting the advantages of investment projects of new technologies and social benefits to the community and protecting the environment to reach the preferential capital of international and domestic funds With his project, DLC can make applications for funding mechanisms of the following organizations: - Global Environment Fund (GEF) was established to address global environmental problems, including 182 member countries GEF operates through partnerships with international organizations, nongovernmental organizations and the private sector GEF is an independent financial organization, provides aid in areas of biodiversity, climate change, international waters, land degradation, ozone and organic pollutants is difficult degradation for developing countries and countries with economies in transition These projects benefit the global environment, sticking to challenges associated with the global environment, countries and regions and promote sustainable livelihoods - Clean Development Mechanism (CDM) is one of three mechanisms established by Kyoto Protocol CDM allows emission reduction projects to support 52 Group 13 sustainable development in developing countries generates "certified emission reductions" that investors can use - The Fund for financial support for environmental protection projects of state and local levels Currently the fund is usually funded for individuals and organizations with active projects in the field of environmental protection 3.3.1.5 Shares issuance to strategic shareholders The strategic shareholders are carefully selected with the conditions of financial resources, relationship support the development of companies as customers, vendors, units and individuals with technical, technological and management capacity In addition to the above conditions, the strategic shareholders also must have agreement on the strategic direction outlined DLC As scheduled, DLC will be developed into a public company and can be listed on the stock market to achieve the objective of raising capital 3.3.1.6 Raising capital from staffs With dedication to stick with the development of the company, and understand the operation and effectiveness of production and business, the majority of DLC staffs is happy to contribute to the development Therefore, the investment in development projects bring benefits long-term benefits; DLC can call their employees to lend at interest rates of bank deposits Implementing this solution will help DLC-financed low-cost, increase the bond between company and employees In parallel with this solution, the DLC can make plans to exercise the right of ownership of shares to employees (Employee Stock Ownership Plan - ESOP) This is a multi-purpose solution is very important ESOP is commonly used in three situations: acquisition of shares of the owner to leave the company, a loan with lower after-tax costs, and create additional benefits for employees 3.3.1.7 Raising capital from customers By building good relationship with customers, DLC can negotiate with potential customers and to borrow large sums for certain projects, then the DLC can be refunded in cash and / or products The negotiation and conclusion of the longterm contract in advance is a preferred solution 53 Group 13 3.3.1.8 Optimal use of resources from suppliers Optimal use of resources from suppliers to support investments in the form of deferred payment, advance materials will contribute to reducing the demand for project finance loans, to cope with the difficulties of the financial arrangements that may occur due to general market context 3.3.1.9 Using loans from commercial banks Only use loans from commercial banks when the above measures have been implemented but not are effective The selection of partners to borrow is also an important task DLC leaders should pay attention to ensure efficiency, avoid waste of time 3.3.2 Solutions organization – Human Resources 3.3.2.1 To improve the organizational structure of the company The process to expand the production scale will change the range term administration since the adjustment changes the organizational structure to ensure effective management is essential The process of finalizing the organizational structure of the companies meet the requirements of expanding the scope of operation should be directed to the specific objectives as follows: - Develop a compact and efficient machine; - Organization of scientific work; - To detect, rectify and adjust promptly any poor performance in the organization; - To promote all the power of the resources which have the highest efficiency; - Create organizational position and power to adapt to any situation, flexible; - To build a culture of the organization Maintaining organizational structure of management functions and enhancing job assignment, authorization and the level of active managers, encourage collaboration and support among departments Developing the Company to become the management model of unitifies and results-oriented 54 Group 13 3.3.2.2 Recruitment The employer needs to rise, so recruitment must be done while the investment process Recruitment must satisfy the following basic principles: - Recruitment must come from the common interests of business and society - Must be based on the workload and the specific requirements of each task to the ability to use their maximum capacity Activity analysis work, set the table job description is a prerequisite before determining the needs and implement recruitment - When selected to study the comprehensive care and personal qualities and individual employee capabilities Recruitment Source: preferential employment of administrators from within the company to take advantage of the experience, skills, reduces risk and policy synchronization with the development of the company Implement the transfer of some skilled personnel, professional firm to take key positions in the organization, the production team to ensure the plant can run smoothly from the start The company should combine recruitment advertising to improve image, and to increase brand awareness of the Company 3.3.2.3 Training Organizing training courses outside at the school, the prestigious training centers for skills management for administrators, focused training sessions on marketing, sales management, supply chain management The company should strengthen internal training through instructing in each department, to promote internal training form of job assignment, authorization For new staff recruitment, in addition to training skills, raising awareness of occupational safety, the disciplinary rules is required before formal recruitment The training for purposes other than capacity there is a duty to contribute to building the company culture 3.3.2.4 Maitaining and developing staffs To further perfect the mechanism of compensation tied to performance, implementation of the seniority system at a reasonable level to encourage employee loyalty to the company 55 Group 13 In addition to the coverage under the law, consider buying additional life insurance for key personnel, accident insurance for all employees Creating favorable conditions of time, finance union activities Maintaining the collective welfare programs such as resort, sick, taste pleasure, reward and motivate children and workers have good academic achievement To offer options to purchase shares to employees (ESOP) for employees to actually be the owner of the business Contribute to Welfare fund an annual minimum amount at 5% of profit after tax The company implements the promotion policy based on job performance The company should pay attention on human resource management in all departments to ensure the reserved labors to meet the requirements management process and investment expansion 3.3.2.5 Strengthen coporate cultures Corporate culture considered as guiding principles and objectives of the company is essential, because it ensures the survival of the enterprise Building strong corporate culture through the implementation of the basic contents of the following: - To perfect the system of institutions, rules of conduct of the company in handling affairs as well as building relationships, working environment in accordance with the current situation and development orientation of the company - Appreciate and use talents Talent is considered one of the crucial and most important in the success or failure of your business - Renovate thinking, accept challenge and difficulty Innovation is a prerequisite for enterprises to survive and adapt to the environment The innovation process is always accompanied by difficulties and obstacles, resolve and accept challenge of leadership is crucial to successful innovation - Develop the visual symbol of the corporate culture as the typical architecture, rituals, anecdotes, symbols, language - and the slogan typical publications 56 Group 13 - Mounting construction of corporate culture on the lives of laborers The attitude of labor, labor, creativity and enthusiasm is present corporate culture In the process of building corporate culture is taking the role of HR put in the forefront, because ultimately, the corporate culture but also by the human form, but also because people exist 3.3.3 Manufacturing solutions 3.3.3.1 Solutions for materials Using savings, resource efficiency is in association with the exploitation of renewable sources of clay made from river sediment The company needs to complete licensing procedures for river sand mining to supply raw materials for lightweight brick factory Maintain relationships with suppliers Expanding storage, active reserve materials to ensure cost (estimated cost of inputs will increase over time) Strictly control the quality of input materials, construction material standards of facilities to ensure product quality, convenient to manage 3.3.3.2 The solution of operating manufacturing process Develop operational procedures based production focused and highly specialized, focused objectives to improve productivity, product quality and reduce costs To raise awareness of labor and strict control of operating processes to ensure restriction of equipment failure and occupational accidents can happen Continue implementation of considering emulation program improvement initiatives throughout the company The computerization process, manufacturing operations, the database connection with inventory management and sales management to create consistency, reduce inventory costs, in time meet the needs of customers , great help for the management of production systems 3.3.3.3 Technology solutions Developing technologies to raise product quality and reduce costs The company should focus on technology for blending raw materials to ensure a better quality product with cheaper costs 57 Group 13 To boost R&D, the company should frequently update information technology to have reasonable user applications It also needs to increase spending on R&D The company should register to protect its inventions, utility solutions and trademarks of the company and to strengthen the protection of secret technology, business and other units to avoid duplication 3.3.3.4 Solution for quality management Establishment of quality including Check product quality personnel and augmented by qualified personnel The company should also invest in modern equipment for the quality performance of tasks effectively Strictly control product quality from raw material management process, ensuring meeting and exceeding product quality standards prescribed by the state (TCVN 1450-1998, TCVN 1451-1998 for burned brick; TCVN 6477-1999 for concrete unburned bricks and tiles TCVN 7959 -2008 for AAC brick) Develop a quality management system ISO 9001-2008, towards total quality management (TQM-Total Quality Management) 3.3.4 Marketing solution 3.3.4.1 Products solutions Investment strategy to expand the scale, raising production capacity to focus on 03 core products of companies that sell semi-flexible technology burned brick, concrete unburned brick and AAC brick In the immediate focus of development investment products sold plastic brick tunnel technology to meet the needs of the market and lack of distribution capacity, promote strong reserve materials available in large infrastructure agreement to immediately benefit and advantage leading cost than competitors Determination of tunnel brick sales increased production flexibility is the immediate priority investment Continue to lead in product quality, sales service, and price to create competitiveness AAC brick and concrete unburned brick are the two strategic products line to contribute revenue and profits mainly for the company in the future The company should place top priority on product quality, promoting the advantage of available resources and experience to organize production efficiently to reduce costs to create 58 Group 13 competitive advantage Regularly capture the changing needs of customers to produce products with designs and features based on different technologies and machinery investment Also, execute the differentiation strategy of quality products to build strong brands, creating a foundation of sustainable value No further developed the product line other than the three product lines in order to avoid dispersion, ensuring the professionalism of products and services 3.3.4.2 Pricing solutions Cost of goods sold an average of DLC is only about 50% of the total cost structure Power input was most reserve to ensure long-term stable production of DLC should be less affected by the inputs, thus allowing stable DLC when the market price of raw materials changes For semi-flexible burned brick, although the lead has the advantage of cost but with the difference in quality, product design, maintain higher prices than the competition at least 5% to confirm the other particular, to maximize profits For products AAC brick and concrete unburned brick, early implementation of strategic competitive prices compared with competitors, application of flexible rates depending on type of customer Step by step implement strategies of leading in price due to the advantage of the cost of inputs, technology and large scale manufacturing to ensure competitive pricing to maximize profit Implement pricing strategy in favor of the customer: when the market will drop even lower, as the market will grow more slowly increased to maintain stability for customers, creating sustainable partnerships Perform an appropriate form of discount for a large number of clients based on purchase volume, payment and season 3.3.4.3 Solution for building distribution system DLC has performed both pushing strategy and pulling one in marketing Building distributed systems include two channels: the traditional channels, including distributors, dealers and business center construction materials; channels include direct sales offices, showrooms and business staff enterprises directly managed by the DLC 59 Group 13 For distributors, agents and business center construction materials, supporting personnel, supporting market development and implementation of local marketing programs based on the focus of DLC’s marketing strategy Perform application software sales management, inventory management to ensure smooth distribution operations, reduce costs and meet customer needs promptly Strengthening advertising, promotion and communication activities, increasing brand awareness and participation in fairs, seminars, and sponsoring a number of major events 3.3.4.4 Solution for selling promotion Recruitment and training of sales professionals, understand the product, encouraging the use of relationships, personal prestige to sell large lots Develop incentive mechanisms for flexible sales team, ensuring peace of mind for staff work as hard salary, benefits the collective good, both encourage employees to achieve higher sales, the overall effect associated on individual merit as a commission, paid by revenue Organize a team of customer care to ensure active support and after sales service, timely handling of customer feedback, while building a database of professional clients to implement strategies customer relations 3.4 Strategic roadmap To successfully implement its strategy, DLC’s roadmap for implementation has phases as follows: Stage 1: from 2012 to 2015 In this phase of investment, DLC will build 01 semi-flexible technology burned brick factory, 01 AAC brick factory and 01 concrete unburned brick; basically complete infrastructure in service equipment to integrate the production capacity at stage 2, effectively exploit plant operations and capital accumulation Stage 2: from 2015 to 2018 Incorporate 03 machinery and equipment to 03 core product lines based on the infrastructure already invested to increase production capacity by more than times 60 Group 13 Stage 3: from 2018 to 2020 Maintain stable production for the plant tunnels, the capacity of concrete unburned brick factory to reach a maximum design capacity, invest in 01 lines of equipment for manufacturing AAC brick, bringing the total public AAC brick plant capacity to 500,000 m3 per year, completing the goal of becoming one of the 10 leading companies in Vietnam to provide construction materials products in manufacturing size, revenue and profits 2011 2015 2015 2018 2018 2020 - Use the accumulation of own capital, raising capital from employees and partners, customers, preferential loans from the Goverment or international Investment in organization 01 plant - Effectively exploiting the available resources tunnel, 01 - Completing the structure AAC brick - Recruit, train and develop consistent personnel plant and 01 policies concrete - To attach importance to product quality unburned brick - Increase investment in technology and R & D - Build distribution system and advertising, media - Strengthen corporate culture Investment in the plant for - Share issuance to strategic shareholders, preferential three more 03 loans from the State or international organization core product - Effectively exploiting accumulated resources lines, increase - Improvement of the appropriate training and attracting production of talent policies, each product - Further improve product quality line more than - Increase investment in technology innovation two times - Promote branding compared to - Promoting the export of products that of the - Maintain and strengthen the corporate culture period Improving concrete unburned brick plant, burned brick plant, invest 01 AAC brick production line - Share issuance to the public, preferential loans of the Goverment, international institutions or commercial banks - Business Restructuring - Further improve product quality - Continue to upgrade technology - Promote branding - To enhance the export of products - To build a strong corporate culture 61 Group 13 CONCLUSION Investment strategy to expand the scale, raising production capacity of the DLC in accordance with the vision, mission set at the same time, is the strategy suitable to the practical conditions of the company today, are: - - Current production capacity of the DLC has exceeded design capacity of 1.5 times, difficult to improve any more to make product development strategy by improving productivity, although hardly feasible strategy This will reduce risks best conditions for funding specific difficulty (does not mean that capital is not raised); - Diversifying concentric activities strategy is actually producing more new products on line technology is in fact the line was to maximize the capacity and the current products have added value optimal compared to other products may be developed as tezzaro brick - The challenges of difficult funding are not barriers to the strategic decision to invest due to the quite good internal elements of the DLC and the possible solutions, especially exploiting existing potentials (land use rights, project license, technology, etc) that the nature of these factors are very important to the integral investment projects - The stratey of expanding investment and enhancing production capacity will best promote the valuable resources that the DLC platform has built over six years (human resources, management expertise, and infrastructure financial and technological accumulation) This strategy increases the potential production and business, creates economic value of the future, creates jobs, improves the lives of company employees, contributing to the state budget and creating favorable conditions for DLC’s active participation in social activities Investment strategy to expand the scale and enhance production capacity is a valuable document for the construction and development process-oriented of DLC in the right direction; DLC can make reasonable adjustments in each annual plan Investment strategy to expand the scale and raise production capacity also shows the determination of all members DLC building a brand and a position that the company deserves in the industry of manufacturing environmental friendly construction materials in Vietnam 62 Group 13 During the integration, there are many social and economic changes, DLC’s strategy will need adjustments and additions However, this strategy is the foundation for DLC’s development strategy for the next stage in a sustainable way Business Strategy of Duc Long Corporation stage 2011 - 2020 was built on the basis of experience and enthusiasm of the founding members plus the background and experience of some members in the Strategy Group that are holding management positions at several large enterprises in Vietnam; toghether with the support of elite and experienced faculty of Griggs University, we believe that this strategy would be feasible in practice 63 Group 13 REFERENCE Master's program in international business administration, 2011, Strategic Management (internally circulated document), University of Griggs Fredric David, 2006, Concept of Strategic Management review, Statistical Publishing House; Michael E Porter, 2010, Competitive Strategy, Publisher children; Simon Ramo, 2010, Forecasting in business strategy, Publisher synthetic TP HCM; Master's program in international business administration, 2011, Marketing Management (internally circulated document), University of Griggs; Philip Kotler, 2011, Marketing 3.0, Publisher synthetic TP HCM; Master's program in international business administration, 2011, Corporate Finance (internally circulated document), University of Griggs; Many authors, 2009, Corporate Finance Analysis, Publisher City National University HCM; Can Dr Truong Doan (Editor), 2007, Curriculum Management and operational production, publisher of the national economy; 10 Dr Vu Hoang Ngan, 2011, Volume lectures and training programs human resources management - (document circulated internally), University of Griggs; 11 Jim Collins, 2008, From Good to Great, Youth Publishing House; 12 Master's program in international business administration, 2011, Leadership Development (document circulated internally), University of Griggs 13 The financial and accounting data of the DLC; 14 The financial and accounting data of some business sectors of construction materials collected by the team from reliable sources APPENDIX 64 Group 13 A summary report on the results of operations of DLC for years; The sum of the DLC Balance Sheet for years; Analysis on direct competitors of the DLC; Analysis of market demand, Decision No 567/QD/TTg on 28/4/2010 by the Prime Minister 65 ... RATIONALES FOR BUILDING BUSINESS STRATEGY OF DUC LONG JOINT STOCK COMPANY 2.1 Introduction to Duc Long Joint Stock Company (DLC) 2.1.1 History of the company The precursor of Duc Long Corporation... ANALYSIS OF RATIONALES FOR BUILDING BUSINESS STRATEGY OF DUC LONG JOINT STOCK COMPANY .20 2.1INTRODUCTION TO DUC LONG JOINT STOCK COMPANY (DLC) 20 2.2 ANALYSIS ON BUSINESS ENVIRONMENT OF... follows: Introduction Chapter I Rationale for building business strategy Chapter II Analysis of rationales for building strategy of Duc Long joint stock company Chapter III Selecting strategy and