Bài luận vai trò chiến lược doanh nghiệp Definition and features of business strategy In business world, the competitors not face directly and a company does not win by stifling the opponent's products but through enhancing the position of their products They compete with each other in an industry environment towards a target market segments and efforts to attract customers Through the consumption, customers will decide who "win",who "lost" Competitive outcomes express the achievement of each competitor in the market and customers will recognize thesuccess of each company To attract customers anddominate the market, each company uses different methods Because in the consumer's mind, the "winner" emerges with the important characteristics that satisfy their needs, the goal of administrators is to make differences The capacity to make differences includes thespecifical ability, skills, technology and resources, which allows an organization to make differences with competitors and create competitive advantage In other words, the ability and skills of an organization create such difference that the other competitors absolutelycan not copy.The worth ability and skills in business include activities such as: product design, improvement, low cost, proprietary technology, outstanding quality, distribution performance Therefore, to survive and develop, each business has to ownsomescopes of activities or skills leading to competitive advantage Indeed, the lessons of success or failure in business has shown that there are billionaires came from empty hands thanks to the optimal business strategy and vice versa, there are also billionaires who wrong in his business wayand givehis property to rivals after only a short time The closure of loss companies and the development of highly effective companies significantly depend on business strategy of thatcompany, especially in the market economy So what is business strategy? Strategy is a word derived from the military field, which is the way to win a war However,the social is growing and strategic thinking is not dedicated only in the military field, business activities also usewith the elements like strategy and leadership In 1962 Chandler, one of the people who initiated and developed the theory of strategic management,said that: strategy is the identification of targets and long term goals of the business, and the acceptance of the action sequences as well as the allocation of necessary resources to implement this goal In 1980, Quinn defined: strategy isthe paradigm or plan thatis appropriate with basic objectives, policies and action sequences ofan organization in a tight overall Recently, Johnson and Schole defined that: Strategy is the direction and scope of an organization in the long termto gain advantage for it through the configuration of its resources in the context of a changing environment, to meet market needs and satisfy the expectations of stakeholders Mintzbergsummaried those definitions with fiveP: - Plan: Anintended action sequence - Pattern: The consistency in behavior in term of time, intention or not intention - Position: The compatibility between the organization and its environment - Perspective: An inveterate way to perceive the world - Ploy: A specific way to pass competitors The features Business strategy has the following basic features: - Business strategy often defines the basic objectives, the business orientation of each company in each period clearly and it isdisseminated thoroughly in all business activities of the company to ensure the company to develop continuouslyand sustainably (greater than year) - Business strategy ensures maximum mobilization and maximum combination in the exploitation and usage of enterprise resources in the present and future, promotes the advantages and seizes the opportunity to gain advantages in business market - Business strategy must be reflected throughout a continuous process from strategy establishment, implementation, testingto evaluation andstrategy adjustment - Business strategy must have offensive thinking to win in the market (must fully utilize its advantages to win) - Business strategy is usually built for a relatively long period (3 years to years), tend to shorten down depending on the characteristics of each industry Understanding thesefeatures clearly will create favorable condition for administrator to build strategic then to help improve the competitive capacity of his company Characteristics of competitive strategy are drawn from the strategy of military and economic That is to make the power and the capacity to make differences appropriate with the environment in the way that the leader expects to create competitive advantage against rivals in the same environment The benefits that strategic brings to the company The company operates without a strategy like a person goes on the road without determining where to go, he just moves according to any direction of the crowd (market and competitors) If he keeps on walking like that, he will forever be a mediocrity in the crowd A bravery leader will not want to consign the future of hiscompany by operating in the way the market and competitors lead So he must deliberately set out a direction and try to influence to lead the marketfollow this direction, a direction that his company has prepared and therefore his company will get more advantages than the others In fact many businesses, especially small and medium enterprises, less concern with strategic issues, they even not identify a strategy for themselves The main reason is they not aware of the rolesof strategy The problem is that not only large business should have a strategy We need to ascertain that any organization, any company needs to have a strategy The presence of an official strategy in business is no longer the wish to have a strategy and it depends mainly on the awareness of the roles of strategy as well as the knowledge of the business strategy ofthe managers A question is posed with many managers is "Why should businesses have a strategy?" According to Mintzberg, the company needs to have strategy because strategy allows business: 1) to establish long-term orientations for the business; 2) to focus the efforts of the company in the implementation of tasks to achieve expected goals; 3) to determine the mode of organization and action in accordance ofdesired goals; and 4) to build the steadiness and harmony of the organization In my own opinion, three basic benefits that strategy brings is: to build competitive advantage by creating high and uniquevalue; to plan the activities of the company and to ensure efficient usage of resources They are basic benefits because deriving from the definition of strategy, the primary purpose of strategy is through the orientations and the rational allocation of necessary resources to create advantages for the organization And these benefitsare also three core objectives that thestrategist looks for whencreate strategy To understand clearly, we have detailed analysis of these benefits:  The strategy helps businesses to build competitive advantage by creating high and unique value There are three important factors that impact on the competitive advantage of a company: the strategy and the resources of the business, industry factors, and macroeconomic factors This statement highlights the roles of strategyin enhancing the competitiveness of the company Competition is the rivalry between economic subjects (producers and consumers) in order to win more favorable positions in production or goods consumption to obtain the most benefit Competition brings many benefits, especially for consumers The producers must find ways to make productsmorestunning,to have high quality, low costs, high rate of scientific knowledge andhigh technology to meet the demands of customers Competition makes producers more dynamic, more responsive and better grasp of customer needs, constantly improve technology, applynew advances and research into production; complete the way of organizing and managing production to improve productivity, quality and economic efficiency Competitiveness is the ability to win in the rivalry between entities in the same environment and having the same attention to an object Competitiveness of the product is measured by the share of that product It depends on the quality, price, speed of supply, accompanied services, the seller's reputation, brand, advertising, sale conditions Competitiveness of a company is the ability to create competitive advantage or the capacityto generate higher productivity and quality than competitors, toaccount for large market share as well as to create high-income and sustainable development Competitiveness of a company realizes the power and advantages of it versus competitors in the way it satisfies customer demands betterand make higher profits Thefactors create a competitive advantage: Picture 2: Main factors that create competitive advantage  Efficiency: The simplest measure of effectiveness is to divide the number of outputs to inputs A company is more efficient if it needs fewer inputs to produce a given output For example, if General Motors needs 30 hours to assemble a car and Ford needs 25 hours, we say that Ford is more efficient than GM Moreover, provided that other factors are equal, such as salary, we can assess from these data, and say that Ford will have a lower cost structure than GM Thus, the efficiency helped the company achieve low-cost advantage The most important component of effectiveness of many companies is labor productivity This indicator is often measured by amount of outputs per worker If all other factors not change, in generally, the company that has the highest productivity in the industry will have the lowest production cost In other words, companies will have the competitive advantage of low cost  Quality The impact of high –qualified products to competitive advantage includes two parts Firstly, the provision of high - qualified products will increase the value of products in the customer's eyes From this awareness of value, the company can require higher price For example, in the automobile industry, companies like Toyota not only have cost competitive advantage based on productivity but they can also require higher price because of their higher quality Thus, in comparison with General Motors, Toyota has both lower costs and the ability to require higher price  Improvementis considered as anything that is new or novel in the way that a company operates or manufactures its product Improvement is perhaps the most important factor of competitive advantage In the long term, competition may be regarded as a process driven by improvement Not all improvements were successful but improvements are a key source of competitive advantage, because, according to the definition, it makes unique things for the company -the things that its competitors not have (at least until they mimic successfully) Uniqueness helps the company to create the differences and requires an increase in price for its products, or reduces costs significantly in comparison with its competitors A few examples highlight the importance of improvement as the platform of competitive advantage: Xerox develops copier, Cisco develops router, Intel develops new microprocessor, Hewlett -Packard develops laser printers, Nike develop high technology sneakers or Sony develops Walkman All these improvements have helped the pioneered companies to create competitive advantage In each case, the company can require an increase in price for the attractiveness of the unique supplier The evidence also shows that customers are aware of the higher values on a global scale, not only from the domestic brands  Customer satisfaction A company that satisfies customer well must have the ability to identify and meet customer needs better than the competitors If so, customers will feel the value of products of the company, and it can have competitive advantage on the basis of differences The improvement in the quality of products helps the company to satisfy their customers by developing new products with the features that current products not have In other words, the achievement of outstanding quality and improvement is an essential part to satisfy customers remarkably For example, following Toyota, Saturn subsidiary of GM manufactures cars in compliance with the orders of individual customers, gives customers a wide range of choices of color and other options Thus, managers need to find out the key factors the groundbreaking factors in production then compares the relative advantage in products and services with stronger competitors, finds the company’s strengths to build business strategies  Strategy helps the company to plan its activities Strategy plays an important role in the formulation of the company's operations In fact, many companies still not have annual plan What many people call "the plan" sometimes is only a few numbers of sales, outputs, profits and expenses Others also have plan but it does not have high quality, which means between plan and the implementation has far distance Indeed, the reason why many companies find it difficult in planning is because the company does not have a strategy The plan is set out but the implementation is successful or not depends largely on strategy An action plan that is built on the basis of a right strategy is always feasible than the action plan that is based on subjective desire of the people who set the plan Chandler (1962) asserted that "market is like battlefield, if the strategy is basically correct, even with a number of tactical errors, the company can also reach the intended target" Thus, when having a good strategy, though in the process of implementing the strategy the company may make a certain number of errors or even its starting point is in a weak position, the company can still achieve the intended target Planning is one of the basic operations of the administrators and it has the largest meaning Definition of planning in general is understood to sketch and complete ideas and projects Planning has strategic meaning and along with the development of the organization, it is increasingly important It is the backbone that governs all activities as well as the culture of an organization We will take the fight of Pepsi against Coca as an example Pepsi Co would not have the position as today if it did not build the right strategy To catch up with Coca, from 1950 to 1955, Pepsi applied five important decisions First, to improve the taste in order not to lose Coca Cola Second, to design the glass bottle and unify its business criteria Third, to redesign promotional activities, enhance brand image Fourth, to focus on occupy large market of bringing drink home that Coca Cola overlooked Finally, to set 25 cities of U.S as target markets for the competition with Coca Cola By the late 1970s, the strategists of Pepsi decided to implement offensive strategy in second stage, mainly applied powerful marketing strategies to increase consumption and directly invaded the market that Coca Cola occupied By 1991, total sales of Pepsi is more than four times higher than that in 1955 In 1985, to dislodge Coca-Cola, Pepsi started the campaign to fight in aerospace The company designed special boxes to send drink to the crew of Space Shuttle Challenger spacecraft and the STS-51-F to test packaging and distribution technology in zero gravity condition Although the space program of the company was judged as a failure but it has proved that Pepsi wants to assert itself, even in completely new fields Pepsi also conducted tasting contest that made name of Pepsi massively popular, the market also expanded greatly At that time, many people believed that Coca tasted well than Pepsi or other soft drinks To make people aware of the truth, Pepsi had launched a strategy with the hope to beat Coca called "Let your taste decide!".With this plan, Pepsi set up tasting stations in supermarkets and stores across the United States Discreetly they poured Pepsi and Coca into two different glasses then they invited guests to drink these glasses and let them know what kind is better The result has surprised many people: more than half of customers taking the test chose Pepsi, although many of these have drunk Coca for life The competition between the two brands also takes place in other distribution channels People like Coca - Cola certainly never find the products of this brand in Lotteria, Chicken Express, KFC, Subway - where Pepsi has exclusive distribution Beside supermarkets, Coca-Cola and Pepsi also debated to gain the exclusive distribution contracts in small dealers through incentive programs such as offering cabinets, tables, chairs, umbrella, glass or Services to maintain and repair refrigerator for free Pepsi was founded nearly a century ago and its starting is completely different from Coca-Cola While Coca began to construct abroad factories in Paris, Bordeaux and other European cities (1919), Pepsi declared its bankruptcy in 1923 In 1928, Pepsi Cola was acquired by Craven Holdings Corporation which had headquartered in the state of Virginia (U.S.) However, in 1931, Pepsi once again went bankrupt and was sold to Mr Charles G.Guth At the same time, Coca continuously expanded its market to Australia, Austria and South Africa Thus, at the starting point, consumption and reputation of Pepsi is far less than Coca Cola But by the early 1990s, Pepsi was honored to rank 7th among the 10 largest corporation in U.S and became the strongest competitor of Coca Cola According to Beverage Digest magazine, market share in the U.S of Coca Cola reduced by 0.4% to 43.7% while Pepsi's market share increased by 0.2% to 31.6% This means that on the beverage market, Pepsi was still No after Coca Cola, but this is the first time since 1988 Pepsi gained market share of Coca Cola The question is that: if Walter S.Mack undertook the position of President but he did not build strategies, did not determine the path for Pepsi, can Pepsi emerge or go into footsteps of bankruptcy?  Strategy ensures the company uses its resources effectively In term of narrow sense, resource is often understood as material resource for the development such as natural resource, asset, capital in cash In terms of wide meaning, the resource is understood to include all of the advantages, material and non-material potential to serve a certain development target Depending on the scope of analysis, the definitions of resource are widely used in different levels: national, regional, the scope of a company or each entity who is involved in the process of economic development Within the scope of this exercise, I use the definition as: Resource of a company is understood as the ability to provide the necessary elements for the survival and development process of the company 10 The main resources of the company: - Information - Finance - Human resources - Machinery and equipment - Fixed assets - Customers, suppliers - Manufacturing process and technical process of the company - The management capacity - The business capacity - Brand and reputation of each product, each services and of the company Each type of resource has a particular and irreplaceable importance Using these resources economically and effectively is indispensable, it requires administrators to respect and develop reasonably, to ensure harmonious relationship between resource elements Even at the national level, using resources rationally and efficiently is also problem that needs to be solved fiercely Because national resource is limited and when the economy does not develop at high level, if the Government only interests in growth, they will have to spend a lot of resources We can see that Vietnamese automobile industry has many favorable conditions for resources They are: cheap labor, large amount of financial investment, the State applies protected policy, the domestic market is the potential market because of large demand while imported cars are very expensive (due to the taxes, fees at high level) However, Vietnamese automobile industry still has little flourishes Domestic production stops in small quantities, mainly processing and assembling The factory which has the biggest capacity of Toyota only reached 20,000 units per year while the factories in the same corporation in neighboring countries have very large capacity Three factories in Bangkok, Thailand have total capacity of 630,000 units per year and it is expected to increase in this year Thus, the absence of proper strategy has led the automobile industry wasted resources, leading to inefficient operation 11 Other example of success in the use of resources thanks to proper strategy is Military Telecom Corporation - Viettel Viettel even has less resources than the automobile industry since this sector is not protected by the State and the company also faces stiff competition from two tycoons – Vinaphone and Mobiphone However,Viettel has risen up and assert its position thanks to the right strategies Viettel took advantage of cheap labor to build broadcast system even in rural areas and expanded coverage Ensuring quality and transmission line is one of the reasons why customers choose Viettel In addition, the Corporation also focuses on customer care by customer care center across the country Based on the financial strength after having certain success, the Corporation has focused on promoting its branding in ways.Firstly, it spent money to advertise on the mass media Secondly, the Corporation has sponsored many programs like “We are the soldiers”, the humanitarian programssuch as "Heart for Children", "Smilesof the children", program towards Spratlys These social activities have increased the reputation of Viettel, helping its image to get much love In addition, the Viettel also expands their market to neighboring countries Metfoneis Viettel's brand in Cambodia, Natcom are Viettel’strademark in Haiti, Movitel is the trademark of Viettel in Mozambique Moreover,Viettel also known Telemor (in East Timor), Bitel (in Peru) and this corporation also associate with Lao Asia Telecom Company to form a joint venture named Unitel Conclusion: Strategy in general and business strategy in particular increasingly asserted its importance, especially in the market economy with high competitive Building a good strategy is the strong foundation for sustainable growth of the business Building strategy is the work of the administrators and it requires managers to have specialized knowledge, abilities and work experience Any business should also have strategy to develop but the strategy of each business must be different and this company cannot mimic the way of other companies In business, following others or imitating others, the company will never get it own sky Only those who have the courage to go ahead of others would have spectacular success 12 In conclusion, managers need to improve their knowledge, skills and based on the conditions and characteristics of their own company to build suitable strategic and help the company to develop sustainably 13 References: Strategic Management – National Economics University - Statistics publisher, 2000 Website: dankinhte– accessed date: 27/04/2014- address: http://www.dankinhte.vn/so-do-cac-khoi-co-ban-tao-loi-the-canh-tranh/ Website: VietQ - accessed date: 27/04/2014- address: http://vietq.vn/pepsi-va-coca-cola-cuoc-chien-khong-khoan-nhuong-d31690.html Website: tailieu.tv- accessed date: 26/04/2014- address: http://tailieu.tv/tai-lieu/ban-ve-loi-the-canh-tranh-13700/ Website: vietteltelecom- accessed date: 27/04/2014- address: http://vietteltelecom.vn/ 14 ... policy, the domestic market is the potential market because of large demand while imported cars are very expensive (due to the taxes, fees at high level) However, Vietnamese automobile industry... have helped the pioneered companies to create competitive advantage In each case, the company can require an increase in price for the attractiveness of the unique supplier The evidence also shows... to respect and develop reasonably, to ensure harmonious relationship between resource elements Even at the national level, using resources rationally and efficiently is also problem that needs