Business strategy of Hai Chau Confectionery Company TABLE OF CONTENT TABLE OF CONTENT INTRODUCTION RESEARCH OF CONTENT Introduction of Hai Chau Confectionery Company 1.1 Outline of the history of formation and development of the Hai Chau Confectionery Company 1.2 Functions and duties Analysis of PEST model of Hai Chau Confectionery Company .7 2.1 Economic environment .7 2.2 Political environment 2.3 Regarding cultural environment 2.4 About environmental technology Environmental Analysis competitive factors 3.1 Customers 3.2 Supplier 10 3.3 The potential competitors 11 3.4 Substitutes 11 Opportunities and challenges from the external environment of the company 11 4.1 Opportunities 11 4.2 Difficulties 12 Evaluate the strengths and weaknesses of the company 12 5.1 Strengths 13 5.2 Difficulties 13 Proposed solutions for strategic management of the Company 13 6.1 The complete solution work to identify targets and strategic tasks of business accounting 13 6.2 The complete solution analytical work environment inside and outside the company 15 6.3 The complete solution formulation of the strategic plan 16 6.4 The complete solution working strategic options .17 6.5 The complete solution work building control strategies 17 CONCLUSION 18 18 INTRODUCTION In the strategic plan of the business, must contain mainly the strategic objectives, strategic measures and policies But the core of the strategy is the means to achieve the objective, which is the optimal method to achieve the objective It is envisioned business strategy of the enterprise is oriented primarily activities important measures will be taken in a certain time period in order to bring the most advantages for enterprises in the conditions certain prerequisites Enterprise Strategy is regarded as the rudder of a boat, but the goal is the destination that the ship had arrived Strategic management is a continuous process starting from the current environmental research and forecasting in future, set out the strategic objectives of the organization, implementation and monitoring the implementation of decisions aimed at achieving the objective of the current conditions and the future Strategic management can be regarded as an art and science establish and assess implementation of decisions related to many different functions, allowing enterprises toward achieving goals set out in a certain amount of time Strategic management focuses on unity administration Marketting, finance research and development production and information systems business areas to achieve success RESEARCH OF CONTENT Introduction of Hai Chau Confectionery Company 1.1 Outline of the history of formation and development of the Hai Chau Confectionery Company Hai Chau Confectionery Company was founded September 2, 1965, is a stateowned enterprise and is a unit of state-owned corporations sugar under the Ministry of Agriculture and Rural Development - Name: Hai Chau Confectionery Company - International Business name: Haichau Confectionery Company - Address of head office of the company: 15 Mac Thi Buoi Street - Vinh Tuy Ward - Hai Ba Trung District - Hanoi The stages of formation and development: a) In the period 1965 - 1975 Companies that produce and build and expand major products are all kinds of biscuits, fried foods, soft candies, hard candies and bread In the early 1970s, the company is equipped with the installation of two production lines by the Soviets pasta and construction help The company moved from the management of the Ministry of Light Industry to the Ministry of Food and Food b) In the period 1975 - 1985 In 1976, the Ministry of Light Industry to receive Form milk factory and established workshops spray drying In 1978, the Ministry of the thing for the factory production line noodle By the year 1981, factory installed furnace production wafers In 1982, the company installed an additional wafers oven, rehabilization noodle production lines to produce high quality prawn noodles c) In the period 1992 - 1996 In 1993, the Company invested an wafers lines of the Federal Republic of Germany In 1994, the company installing a production line of chocolate coated wafers and other confectionery products In 1996, the company implemented a joint venture project with Belgian Chocolate candy production The company has developed and implemented the installation of two hard candy production line and advanced fondant with modern equipment and synchronous technology transfer of the Federal Republic of Germany Especially with the help and financial support of the Ministry of Health and the scheme Vietnam - Australia, the company has research and successful implementation of technologies for the production and putting iodine Bouillon operational d) The period 1997 - to now In 1998, the company expanded investment Biscuits production lines to Taiwan more than doubled Between 2001, the company invested the production line, to double the capacity of lines onto wafers In late 2001, the investment company of chocolate production line (German technology) In late 2003, the Company successfully installed the advanced line of soft bread Netherlands and ongoing production in order to launch new products entering the market, enhance the company's competitiveness In 2004, the Company completed the investment chain of Taiwan salty crackers 1.2 Functions and duties 1.2.1 Function The company has manufacturing functions and commercial business Through it, the company has helped promote market economy development, livelihood security for workers and increased thuc for the state budget The company's activities include the following major contents: - Manufacturing and trading all kinds of confectionery products - Trading materials and materials packaging food industry through the production and business operations of the company in recent years - Direct export commodities production and trade 1.2.2 Tasks Major business mission of Hai Chau Confectionery company is exported directly to foreign commodities trading company In addition, the company also has a number of specific tasks: - Developing and implementing business production - Automatically generate capital for production and business management and effective exploitation of that capital - Implement the commitments in the economic contract concerned - Organization of preservation, ensure the circulation of goods frequently takes place continuously and stability in the market - Study and implementation of measures to enhance business efficiency Analysis of PEST model of Hai Chau Confectionery Company In market economy all business and production activities of the enterprise are subject to the impact of the external environment, which acts as the indirect factors affecting business performance of the enterprise Hai Chau Confectionery Company is no exception to this influence, the fact that businesses are not able to control the events brought this from the external environment that can only seek information increases the favorable opportunities and limit risks unprofitable Content analysis of the external environment in Hai Chau Confectionery company is the process of finding, analyzing and selecting useful information from the external environment, thereby a basis for determining the opportunities and threats with the company When gathering information about the macro environment include the economic environment, political environment, cultural environment, technology environment and demographic environment The information from this income has become useful supplies for all production and business activities of the company But in fact only 45% of income information could be used for the operational strategy of the company Hence the formulation of business strategies of the company when assessing the external environment requires the selection of the information necessary and useful 2.1 Economic environment Considering the economic environment, the company is more interested in foreign currency exchange rates and the export policies of the State for items related to production and business operations of the company Most producers of raw materials that the company uses is imported, which is a factor to ensure quality inputs to the volatility of foreign currency exchange rates have a huge impact to the payment of foreign currency for the foreign suppliers If rates decline, the company is profitable, but if increased costs for input materials high Also world market increase is also nguyennhan affect production and business operations of the company In particular, a number of changes in the price of electricity and water in no small part also created difficulties for companies in reducing costs in order to stabilize prices 2.2 Political environment Political environment and legal framework of a country directly affected business operations in general and import-export activities in particular The political stability makes the relationship between the two parties was made Therefore, before placing relations with partners, businesses need to understand and comply with the provisions of the relevant governments, customs and international laws relating directly or indirectly to action export In many cases, political factors and criteria become law forcing businesses must adhere when selecting export market Vietnam's business environment is expected to have much breakthrough in 2015 when institutional reform, creating the best conditions for the development of the private sector is seen as a prime target today This is a good basis for faster progress of Vietnam in 2015 with a free trade agreement will be signed But this also puts Vietnam before new challenges on request finishing faster business environment, attract investments, generate momentum for the next development steps A stable political environment, a variety of incentives for foreign investors and especially the purchasing power growth is what many investors describing when asked about the ease of doing business in Vietnam This is also an important factor that many foreign businesses and investment decisions have a long-term intentions in Vietnam 2.3 Regarding cultural environment The cultural exchanges with countries such fish has helped Vietnam to learn and acquire many new cultural color, new attitude, new consumption patterns, in the previous period, the people of Vietnam remains Clothing eating habits make lasting, step into the period in 2000 onwards, the people of Vietnam are no longer concerned about issues such as design, style, style, flavor, attractiveness, of product Thus requiring the diversity of products increasing, and that is the challenge for Hai Chau Confectionery Company in the process of adapting, innovating or not renewed This affects the strategic decisions of the company is necessary to truly innovate the business to adapt to the diverse needs of customers Therefore the business strategy in this period will bring natural extrovert 2.4 About environmental technology The scientific and technological progress has always been a positive factor in promoting production development Most nascent technology platform will negate the technological background backward and inefficient The products made from the new technology platform will have more advanced features, more and more extra diversity capable of attracting customers redirect consumers Currently, Hai Chau Confectionery Company owns two main types of technology: the old technology and new technology investments If just maintain this two technology platforms Hai Chau Confectionery Company is unlikely to compete with the competitors equipped with the new technology It was a big challenge Moreover, the introduction of new technology requires people to consume new products, gradually replacing older products gradually being eliminated Environmental Analysis competitive factors 3.1 Customers The company retains customer dividing into two large sets That set the final consumer customer and the customer file is the intermediary company, wholesale dealers and retailers: - With files end consumer customers, the company is divided into main market areas, which are: + Urban market areas where high-income consumers of diverse types of products with the high quality requirements, design and sleek + Rural area where there is market demand for medium and low income, the creation of customer demands for innovative confectionery products have only lower urban, good quality, heavy weight, design, Designs not need beautiful, affordable + Mountainous areas where markets have very low incomes, ask for a moderate quality, beautiful design without heavy volume, low price - The customer file is the intermediary company, the wholesale and retail dealers are set important customer of the company, the amount consumed most of its products This network of dealers spread across the country, mainly in the North, Central ensure the circulation and consumption of Hai Chau Confectionery products continuously and rapidly Entering the period 2010-2015, the company has set a fresh view of our customers The company organizes more important to the rural area market, a market that accounts for most of the national market proportion (approximately 70%) On the other hand, the company's products ever primarily aimed at this customer set, have moderate incomes and low but guaranteed a high level of sales Hai Chau Confectionery Company was very attentive and create all conditions for development of this market sector Therefore, the company's products is increasingly high quality of designs and styles to be able to attract more customers Also companies not miss the opportunity to develop the urban market area, where people have a high income to consumption of these kinds of high-end products Although the proportion of this market sector is not high (about 15%) but the profit promises very high 3.2 Supplier One of the factors that directly impact production and business efficiency of the company is being influenced by the material supplier Previous periods, the company must import most raw materials abroad as flour, spices, milk powder, cocoa,etc, except there is domestic sugar produced To ensure the quality of products required the company to ensure the best supply of raw material inputs Therefore, the company does not have to bear the high raw material prices, but also were influenced by foreign suppliers, import and export policies and other factors disrupting the supply process This company does not actively much in production In 2010-2015: marks an important step for the food industry in general and in particular the confectionery industry, which is the establishment of raw material processing plants such as wheat flour factory in the south Such levels of dependence on foreign suppliers has decreased a lot because the proportion of the cost of wheat flour in bread production is about 40% Company can easily sign contracts with local suppliers In addition the company also has policy choices street vendors in both countries to ensure that their capital advantage in the form of deferred payment and timely supply for production HaiChau Confectionery company under the Sugar Corporations No.1 should know very clearly cyclical supply of sugar companies sugar, and other information related to the time when the supply curve is the highest quality, is low Best to take timely decisions to produce sugar stocks Not only that, we also understand very clearly the information on sugar imported from abroad especially from China When the supply of sugar from sugar mills are high, while sugar imports 10 into themselves massively A corollary is to pull the line to the lowest price Grasp clearly the above information, Hai Chau Confectionery Company make timely decisions and reserves for production line Do a good job of reserves, the company will be able to reduce product cost compared to competitors if they not reserve the sugar at low prices Because the cost of sugar in the cake was 15%, the candy is 25% 3.3 The potential competitors In addition to business enterprises producing traditional sweets such as Hai Ha, Hai Chau, Trang An, Huu Nghi, Quang Ngai, Lam Son,etc, has appeared to produce confectionery business with the scale and potential new very diverse forces Most prominent is the Kinh Do company, have abundant financial resources, with many dealers and stores in all regions of the country Currently, the Kinh Do company is entering the North and gradually affirmed its position on this market Products of the company have gained the trust of customers by high quality, beautiful design, rich category But the prices are slightly higher than the average income of the consumer Especially as Kinh Do is a leading enterprise in the manufacturing sector needs fresh bread tends to increase in urban areas Subsequently the Hai Ha company also successfully implemented Hai Chau company only really began in 2003 when entering lines of dutch soft bread, and put into production to produce competitive products 3.4 Substitutes For confectionery products, the product replacement can only be the fruit When the fruits are seasonal confectionery consumption rate would slow Because then people will switch to hands that fruit consumption for confectionery Therefore, in the April, May, June, July are not selling candy month, Hai Chau company should plan to reduce production Opportunities and challenges from the external environment of the company 4.1 Opportunities - Due to increased GDP growth, coupled with high urbanization speed up consumer demand for confectionery products increased particularly in urban areas, companies need to focus on key market areas in order to bring the products meet customer needs 11 As international relations are expanding, Hai Chau Confectionery Company has expanded market prospects by exporting to markets within ASEAN - Companies have the opportunity to transfer advanced technology lines to improve production capacity, product innovation - The company easily establish relationships suppliers may select suppliers capable to best meet the production needs of the company with the lowest price, payment method most profitable for the company 4.2 Difficulties - Vietnam has economic integration in the ASEAN region is a stepping high global nature Economic benefits will focus on some foreign corporations, big competition, this is a major problem for the survival of small and medium enterprises in Vietnam - Entering the period 2010-2015, the competition in the domestic confectionery market place increasingly aggressive in terms of variety, design, price and regimes and policies entice customers - The investment in confectionery production massively and cause oversupply in many kinds of candy - Many confectionery manufacturing facility also uses competitive measures, causing substrate exist in quality reputation and market share of companies in the market - In normal conditions among the country means more traffic, quite convenient, quick to market fruits are abundant, many categories and cheap price Moreover fruits imported from countries same as: China, Thailand,etc, always is the danger threatening the consumption of confectionery companies in the market Some material the company has to import from abroad as flavoring, cocoa, should the USD higher exchange often increased input costs for business For materials like road salt in water, but the company has made procurement policy reserves for producing reasonably but now and the next year the price will rise, this is a difficulty for the manufacturers of food processing after sugar, salt,etc, Evaluate the strengths and weaknesses of the company 12 The analytical work environment help administrators in companies established are the strengths and weaknesses of the company when planning their business strategies 5.1 Strengths - Hai Chau Confectionery Company has strong human resources, increasingly high qualifications are fostered by training and meet the requirements of production in the process of using the machinery and modern equipment should quality of work is guaranteed So that companies can increasingly improve product quality - The company owns many modern production lines in all depreciation period should have the ability to produce products with low cost but quality is guaranteed good design In addition to this very diverse line should produce more diverse products to meet the diverse needs of customers - The company has considerable working capital to meet the demand in business and production 5.2 Difficulties Real tough start for the company's annual interest rate payable by the investor greater depth from 2005 to 2010 - The company's marketing function has not been much emphasis should not really exploited information from external interests, not fully capture the diverse needs of customers, as well as the change of guests consumer goods in confectionery Proposed solutions for strategic management of the Company 6.1 The complete solution work to identify targets and strategic tasks of business accounting Currently, Hai Chau Confectionery Company is pursuing three main objectives were: + Improving Competitiveness + Increased Profit + Increase market share As we all know that business objectives to achieve as a result of future expectations that enterprises have to mobilize all available resources to perform but if the target is not precisely quantifiable, in particular, the very difficult to achieve Also it made losses of enterprise resources if such high goals past or vague Moreover, the 13 targets to be achieved must be based on the current status of resources business owners should not pursue goals beyond the resources that businesses that have relied on external funding, the power-do reduced the autonomy in the process of achieving this goal have suffered due to pressure from outside Also when pursuing multiple objectives simultaneously, then make sure that the benefits of this goal will threaten the interests of other objectives, excludes never have the perfect pick all targets at work Hence the complete solution works identified strategic business objectives of the company during this period are: - Companies need to quantify your goals clearly Especially difficult to quantify goals as the goal of improving competitiveness Companies should improve their ability to compete for traditional items such as: Items biscuits, wafers, a commodity which the company is dominant in the market that has many advantages in production and business, forming a strong individual And for some luxury items like candy chocolate products, soft bread should have other goals such as lower market penetration goals for these products As this is a new kind of new products entering the life cycle have not been accepted by the market, the Company does not have much experience in the production and trading in this commodity should not be high quality Therefore the company must visit the market before, this will make the company very costly to invest locusts amplified product program - The company must be in the status of its resources to determine the objectives to be achieved, should not use funding from outside to perform high-level goals, it will put pressure on the company To so the company should implement the motto "raising short-term peel" like buying the biscuits chain moderately valued rapid payback period can reinvest to expand - The company should not put three goals are equally important as this mutual incompatibility If implemented targeted market penetration for new products certainly profit target will be affected in the early stages of the product life cycle, the fixed costs per unit calculated for high quality products, the the consumer has not been accepted so much backlog of unsold,etc, The period 2015-2020, from the most important objective as the objective of improving competitiveness for products with the strength of the Company and market penetration for new products, expand market share Thus a number of tasks laid out: 14 - Enhance the work of finding outlets for premium products of the company on the market to consumers - Research new products can meet the needs of the market - Look at the new needs of the market for a new investment trend - Improving pricing policies, distribution policies, advertising policies, and the policies of accounting for new products to enter the market - To mobilize investment capital for businesses to invest in production - Improve the training of people to acquire new technology to better serve the manufacturing process,etc, * Besides the target profit should be taken to increase the efficiency of production and business activities Some mission is: - Improving the supply of input materials to reduce costs - Improving production planning for the timely supply of candy when the market needs with the number and types to meet consumer demand - Improving the management of production in order to save the manufacturer 6.2 The complete solution analytical work environment inside and outside the company - Workforce: This is the amount of resources and also the most important to the enterprise not only with Hai Chau Confectionery Company All production and business results achieved were served to employees and the employees dominate and use other resources for the manufacturing service business must therefore grasp hold structure and qualified employees of the Company - Financial resources are very important resources to be able to finance the process of production and business activities of the Company from the stage input to output stages Need to accurately assess the financial resources according to the structure and by source: + If assessed according to structural funds will determine the ratio between the working capital and fixed capital Since we can know the company is capable of flexible financing working capital in the business to some degree + If financial resources assessment will identify sources of proportion between equity and capital funding from outside 15 - Power machinery equipment - the technology of the company is seen as an advantage to produce all kinds of high quality products, with high competitiveness - Reputation and brand of the company is a competitive advantage that a company should consider as a resource effectively It is very beneficial to companies when launching new products on the market * Analysis and evaluation of external environmental factors under the following perspective: - Consideration of external factors influence an objective and quantifiable impact levels as demand, supply, foreign currency exchange rates, income per capita annual GDP - Forecast of the change of the macro environment as well as environmental characteristics to determine direction for the Company It is the State's policies on taxes, import and export of raw material of the company,etc, 6.3 The complete solution formulation of the strategic plan - The local strategy must be built on the basis of exploiting the strengths of the company and the favorable factors from the environment The strong point is that large human resources and qualified skilled, large working capital, the production line has all the payback period, the reputation and brand of the company high, wide distribution network wages , the flexible price policy,etc, The advantage is increased consumer demand and market trends increasingly expanding - The strategic plan of the Company can take strength to overcome difficulties from the environment or from the environment favorable taken to overcome the weaknesses of the company Specifically biscuit products of the Company are diverse, high quality, but the price is very consistent with the average income of the consumer should be able to penetrate the rural market area, which would carve for the difficulties caused by the competitor offers Thus strategic plan to diversify products biscuits can be set - The strategic plan must be based on the actual situation of the Company resources should not build strategic plans indeed depend on external resources - The strategic plan of development should focus on solving the key problems that the company is facing the potential risk or difficulty In order to implement the 16 strategic plan, the Company may remove the difficulties and avoiding the potential risk it - The strategic plan should be built on the basis of economic benefit to the long-term (over years) As this company can effectively mobilize the resources to focus on strategy implementation and provides small allocation of costs for the production process and also easy to business investment recovery 6.4 The complete solution working strategic options - Once the strategic plan is built, it is necessary to have the discussion and evaluation of the functional parts and the board of directors of the Company The economic feasibility of each alternative strategy is to point out the enormous economic benefit which brings strategy and the feasibility of that plan If the strategic plan promises economic benefits are difficult to implement that plan can not be selected Conversely feasible alternatives high but low economic benefit it would not be chosen for such a company will lose much opportunity cost - The strategic plan was selected to create the superior capabilities that the Company is available and there is a difference with the competition In fact in recent years the company has yet to this as the competitors: Hai Ha, Kinh Do,etc, The capacity of the lines and soft chocolate cake very large but production surplus by not selling be Because of the high-end products of the company are not really exceptional and distinctive in the market is much 6.5 The complete solution work building control strategies - Develop strategies next stage is the selection of strategy After the company planners had considered and evaluated the benefits and feasibility of the strategy chosen, the school embarked on the strategy To be able to effectively control the development strategy must comply with the following requirements: - The strategy must be built on the basis of the analysis and assessment of the environment inside and outside the enterprise via individual models or model SWOT pair market products - Strategies to hate themselves on the recommendations, comments of the functional parts - The strategy must be based on limited resources, can not develop strategies beyond the reach of the company 17 CONCLUSION When it comes to manufacturing business, whether in the form of any issues raised first is also effective Production and business efficiency is a target of a production platform, which is a measure of all aspects of the national economy as well as the production unit Operating profit in the market economy is the biggest goal of every business To achieve that while maintaining good quality, reasonable prices, business remains solid in the competition, businesses must constantly improve the level of production and business, including business management strategy the important issue is crucial to the outcome and efficiency of production and business of enterprises Experience shows that enterprises with strategic management practices' will reap success in business than now not interested Strategic management process helps businesses determine how stable a purpose and direction for the leaders help to focus attention on the leadership collective action in any direction and when to achieve it while focusing on the key, of course, functions and duties that aim to achieve Today's business environment changes quickly, appear more chances and risks In the process of strategic management, we take very seriously the factors affecting the business environment, it was forecast environmental changes near and distant future, thereby exploiting the limited opportunities corruption risks and be prepared to adapt to environmental changes Strategic management approach is very logical and artistic medium high science, to achieve the basic objectives and comprehensive corporate influence that choice 18 ... before new challenges on request finishing faster business environment, attract investments, generate momentum for the next development steps A stable political environment, a variety of incentives... evaluated the benefits and feasibility of the strategy chosen, the school embarked on the strategy To be able to effectively control the development strategy must comply with the following requirements:... medium enterprises in Vietnam - Entering the period 2010-2015, the competition in the domestic confectionery market place increasingly aggressive in terms of variety, design, price and regimes