Phân tích sự cần thiết về xây dựng chiến lược – mô hình chiến lược tại Công
ty Trần Anh
PART I: INTRODUCTION
In the context of the fierce competition economy as currency, an enterprise wants
to be successful; it may not be passive to the change of environment. An enterprise wants
to be successful; certainly it must know what it is doing and what will do? And if so,
what is result. To answer these questions requires a certain knowledge not by rather than
subjective feeling. By far, the foreign enterprises have been a far and wide vision in
business and they have proven their success in occupying the majority of the “lucrative"
markets in the local countries. However, for Vietnamese enterprises, it is passive with the
environment changes, slow changes, not having long term vision which still exists in
many enterprises. Why do foreign enterprises have such flexibility in business? The
answer is that most foreign enterprises entering a new market are equipped with certain
business strategies. Because of the above reasons, exposure to the knowledge of business
strategy is essential for an enterprise in Vietnam in general and the commercial
enterprises in particular. According to my personal opinion, if an enterprise builds a
correct strategy, it will bring the basic benefits for the enterprise as follows:
1. The enterprise has orientation in the future, and always is sustainable
development, is active in the activities.
2. Enterprise will not encounter many risks and obstacles in business, competing
with rivals when having the volatility of macroeconomic policies or market
changes.
3. The enterprise will have high profit, people in the enterprise will have sufficient
motivation, psychological stability, and are determined to work long term for
enterprise, combining strength and toward to one target of all people in the
enterprise.
PART II: CONTENT
Before analyzing basic benefits of business strategy, let's find out what the strategy is,
and with method to build the most effective business strategy:
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1. Concepts about Business strategy
1.1. The perpection of strategy:
According to Alfred Chandler, strategy is
“the determination of the long-run goals and
objectives of an enterprise and the adoption of
courses of action and the allocation of resources
necessary for carrying out these goals”.
James B.Quinn defined strategy as “the pattern or plan that integrates an
organization’s major goals, policies and action sequences into a cohesive whole”.
On the other hand, the strategy definition of McKinsey (1978) is “Strategy is an
integrated set of actions designed to create a sustainable advantage over competitors".
The planning and implementation of business strategies have an important
influence on the survival and development of enterprises. The role of business strategy is
demonstrated through the following aspects:
+ Business strategy helps businesses realize their purposes, and directions, acting
as a basis and guideline for all the business activities of the enterprises.
+ Business strategy helps businesses understand and take advantage of business
opportunities, and proactive measures to overcome the risks and threats in the
competitive market.
+ Business strategy contributes to improve the efficient use of resources, enhance
the competitive position of the business to ensure the sustainable development of
enterprises. Business strategy also creates a firm basis for the formulation of policy and
other decisions about production in regard of market fluctuations..
1.2.
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Types of strategy
Corporate-level strategy
Corporate level strategy: a strategy to identify and define the purposes and
objectives of the company, identify the business which the company pursue, create policies
and plans to achieve basic corporate goals, allocate resources among business activities.
Company strategy is applied to the entire enterprise.
-
Business-level strategy:
This strategy is planned to determine the selection of specific products or the
market for their own business operations within the company. In the business strategy
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level, we identify how each business unit must performance to contribute to the
achievement of company goals.
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Functional -level strategy
The strategy focuses on functionally supporting for corporate strategy and business
strategy. For single-industry business units and multi- industry ones, function-level
strategy is similar. These function-level strategies form the basis for other strategies such
as marketing strategy, financial strategy, strategic research and strategic activities to
strengthen the competition strategy of the business and determine the actions and processes
to gain the business benefits from its competitive position.
-
Global strategy.
Today, in the world of global markets and global competitions, to gain a
competitive advantage and maximize the performance of the company, it is increasingly
requiring companies to expand its operations beyond the borders of their home countries.
Thus, the company would need to consider the different global strategies to pursue. The
benefits and costs to expand the markets beyond the local borders will be evaluated and
considered in the selection process of the suitable strategies.
2. Methods for building a business strategy.
2.1. Macro Environment Analysis - PEST Model.
Political and Legal Factors, Economic Factors, Socio cultural Factors,
Technological factors.
2.2. Industrial Environment Analysis.
A model of 5 forces affecting the business strategy developed by M.Porter will be
used in this analysis
Figure Porter’s 5 Forces
2.3. Combining all the parts of the macro environment and industry environment, we have
following diagram.
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Economic Environment
Technological Environment
Pressure
of supplier
Enterprises and
competitors
Pressure
of the buyer
Social
cultural
environment
Subsidiaries
Legal, political
Environment
Natural
Environment
Diagram: Factors of the macro environment and industrial environment
In summary, the analysis of the business environment is extremely important for
businesses. The goal of the analysis is to examine the environment to identify
opportunities and threats, then make reasonable management decisions based on that
basis.
2.4. Strategic building tools.
According to Fred R David, important techniques to form a strategy consist of
three stages, the tools used for this process can be applied to all sizes and types of
organizations, and they help administrators identify, evaluate and select strategies, and
are expressed through the following stages:
Diagram: Model of building a strategy
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The input stage
External Factor Evaluaton
Compettve Profle
Internal Factor Evaluaton
Matrix (EFE)
Matrix (CPM)
Matrix (IFE)
The matching stage
Strengths-WeaknessesOpportunites-Threats
Boston Consultng Group
Matrix (BCG)
External – Internal
Matrix (IE)
Grand Strategy
Matrix
Matrix (SWOT)
The decision stage
Quanttatve Strategic Planning Matrix (QSPM)
Source: Fred R. David, Strategic Management Concepts and Cases, Figure 6-2, P.222
Stage 1: the input stage includes EFE Matrix, IFE matrix, Competition Profile Matrix.
This stage summarizes the basic information that was entered into the form needed for
the strategy.
Stage 2: this stage is called a combined period to offer feasible strategic options by
arranging, combining important elements inside, and outside. In this stage, we select
one of the matrices such as CPM, SWOT, IFE, and EFE... In this thesis, the group has
used the above matrices, from which we combine the factors to carry out an appropriate
strategy.
Stage 3: this is the decision-making stage, which includes only one technique that is to
use Quantitative Strategic Planning Matrix (QSPM). This matrix uses the information
entered in the first stage to objectively evaluate the feasible strategies that can be
selected in two stages to choose the most appropriate strategy.
3.
Analysis of the basic benefits that strategy brings for enterprise
3.1.
Enterprise will not encounter many risks and obstacles in business,
competing with rivals when having volatility of macroeconomic policies,
market changes.
In the market economy with fierce competition,
an enterprise wants to be successful, it must have a
strategy. That means that business managers must
understand the changing trends in the market,
finding the key factors for success, to exploit the
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advantages of the enterprise, recognize weaknesses of the enterprise, understand the
competitor, the desire of the customer, the approach to market, from that making the
creative decision to deploy or cut operations at the certain time and geographical areas.
Give a specific and effective business direction, as the guideline for all functional
activities of the enterprise. Help enterprises to promote the competitive advantage,
strengthen business, developing market share. Help enterprises to limit the risks to a
minimum level, enabling businesses long-term stability and continuous growth. The
company without a strategy likes a person going on the road without determine where to
go, being pushed in any direction they move in that direction. If continue to go like that,
he will only be a mediocre and alone in the crowd. Business will fully adapt to changes
in macroeconomic policies to suit modern business conditions, such as policies on tax
exemptions for foreign enterprises to invest in Vietnam, increasing competition among
domestic enterprises. When having the foreign products sold the same or lower prices
with the local, if the enterprise does not have previous orientation, it completely has
disadvantage because of the market changes, changes in customer amount, and changes
in product prices...
An enterprise will not want to consign future of its enterprise for the market and being
leaded by the competitor. To do so, it must proactively show a path and try to effect to
lead the market in this direction which was prepared by the enterprise and therefore will
get more advantages than others. In any public confrontation, which rival can impose its
direction on the opponent, it will be much better chance of winning. Therefore, the
enterprise can develop and integrate with the world.
For example: The Story of investing abroad
of Viettel is not only special in two neighboring
countries. Before Viettel come to Haiti (a country
in the Americas) to invest, the relationship between
Viet Nam and this country is quite limited. Even,
this country has not had representative agency in
Vietnam. However, after investment activities of Viettel, the Prime Minister of Haiti
have an official visit to Vietnam opened a new high level of relationship. Late in 2012,
Viettel has become a "special envoy" during a visit of the Prime Minister Republic of
Haiti to Vietnam. During that trip, there was an unprecedented event in diplomatic
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history of Vietnam when an enterprise becomes a "partner" of the Government. With the
presence of Prime Minister Nguyen Tan Dung, Prime Minister Lauren Xanvađo Lamôthê
and Hoang Xuan - General Director of Viettel signed a Viettel memorandum that
becomes strategic investment partner of the Government of Haiti. In fact, Viettel has
created a fairy tale in Haiti when the Vietnam company continue to invest after the
earthquake that killed more than half a million people and 80 % of the destroyed
infrastructure. At that time, the AP newspapers has quite a long essay titled “Vietnam
Army will become the savior of Haiti's telecommunications industry". After 14 months
of construction, NATCOM - Viettel Telecom brand in Haiti has officially provided
services and created a leap in telecommunications infrastructure of this country.
3.2. The enterprise has orientation in the future, and always develops sustainably, is
active in the activities.
Strategy is very important for development
of an enterprise and more important, in today's
age of globalization, enterprises compete fiercely,
using much guise to attract customers and taking
market shock. As a leader of an enterprise, we
must build a long -term development strategy.
Building a strategy, it must be careful and
meticulous, must have close evidence, must be
peer-reviewed and predictions for the future, to choose the path to success for the
enterprise. Strategy must be implemented seriously, not deviate to the outlined strategy.
Building highly professional staff to develop strategies for its enterprise. Must clearly
identify the objectives of the enterprise to plan and formulate strategies accordingly. And
if not determine your goals and build yourself a specific and appropriate trading
strategies, the enterprise will not develop, and not follow any, or pale next to other
businesses same industry or business is bankrupt. Thus the enterprise can exist and
develop and proactive in work, not depend on any factors.
Example: In term of building strategy, willing to
be loosen in short term to build long -term
development strategy of the Tran Anh electronic
retail system. Tran Anh currently has 11
supermarkets,
with
the
goal
to
build
7
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supermarkets in 2015. The company mainly used the own capital. Late in 2012, the
equity is over 245 billion, plus the new investment of 64 billion of Nojima, Tran Anh has
a total of 300 billion, enough for its plan. Also, when the real estate market is slow down
as currently, opening supermarkets do not cost as before; a maximum of about 10 billion
Dong for one location. It is when having to renovate, even if in the form of the building,
it were built with at less more than 5 billion Dong. Thus, we can calculate that if they
open up to a dozen supermarkets, it is less than 100 billion which is of the company's
capabilities. With the amount of equity of 300 billion, Tran Anh is still pretty confident.
The worst scenario is that, the company could at least 3 years of losses. With the above
strategy, Tran Anh is expected to improve the ranking position on the retail enterprises
and achieve goals in the top 3 in next 3 years.
3.3.
The enterprise will have high
profit, people in the enterprise will have
sufficient
motivation,
psychological
stability, and are determined to work long
term for enterprise, combining strength and
toward to one target of all people in the
enterprise.
With the suitable and timely construction
and development of strategies, catching the opportunity, do not waste time and money;
Always being ahead of competitors in the market exploration, making rational policy,
strengthen relationships with customers, together with the Marketing team to have that
professional market research and competitor controversy, so the development of
businesses will surely bring success and profit for that business. But to sustain and grow,
must have steady steps. So now sets targets associated with the long-term development of
employees and enterprise. These goals are not esoteric things far removed from reality,
which is clear, understandable to everyone, since it changes the basic mindset of each
employee’s awareness to better understand their responsibilities and obligations for the
enterprise, contribute their effort, intelligence, enthusiasm for the incremental
development of the enterprise. Taking human resource as the root, building positive
relationships with staff, making decision at the right time...
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For example, Building linkages between enterprises and employees of the Huu
Nghi Confectionery Company:
The Human resources of Huu Nghi are young people with basic academic
background, is entering the stage of "ripening" of the age and seniority. Leaders are well
trained, with good vision. It's the "man of Huu Nghi" will create a “Huu Nghi culture".
The creating enterprise culture is conducted from the smallest and the most practical
things in the operation of the enterprise. In Huu Nghi, she has created the material
conditions and cultural environment to fully develop the professional capacity, creative
thinking, and passionate dedication of the staff to build a personal career and
development of the company in a sustainable way. Spiritual life of officers and
employees are interested, visit the sick, to be held quarterly birthday, visit and participate
in cultural festivals, fitness, sports ... Work environment is continuously improved, work
space is ensured with industrial hygiene ... children of officials and employees are
concerned, are rewarded when having achievements in learning ... thus in the context of
difficulties as currently, it 's critical of leaders is to have the link among stages, parts,
united as one, from the Board of Administration to the Board of Directors and all officers
and employees create general strength, steadily implement outlined strategy to overcome
difficulties, take the enterprise grows. To do this, she and the executive board have
determined to direct the production, business to reduce costs, enhance innovation,
technical innovation, improve labor productivity, innovative research, and produce
differentiated products which are rich in gray matter volume in order to create
competitive advantage. Become a number one food and Confectionery Company in
Vietnam and among the top 10 largest confectionery manufacturers in Southeast Asia in
2025 that is the target of Huu Nghi in the future. In the near future, Huu Nghi completes
nationwide distribution – sale networks and boosts exports to countries in Europe, North
America; ensure the proportion between domestic consumption and exports reached 7030 % ratio with the sales scale of 1,500 billion VND in 2015.
The above mention is my assignment of Strategic Management subject, I look
forward to receive the comments of the lecture to further complete my assignment and I
would especially like to thank Assoc. Prof. Vu Thanh Hung – National Economic
University has transmitted me the incredibly useful knowledge about the Strategic
Management subject.
References:
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1. The curriculum of Assoc. Dr. Vu Thanh Hung, (Deputy Director, Institute of
Business Administration - National Economics University, Hanoi)
2. Concept of Strategic Management, Fred R.David, Statistics Publisher 2006
3. Competitive Strategy - Michael E.Porter Publishing House of Science and
Engineering. Hanoi
4. Saigon Economic Times
5. http://www.vietnamnet.vn
6. http://www.cafef.vn
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