Tài liệu Xây dựng chiến lược kinh doanh cho công ty cổ phần nước thái nguyên giai đoạn 2011 2020

Xây dựng chiến lược kinh doanh cho công ty cổ phần Nước Thái Nguyên giai đoạn 2011-2020 BUILDING BUSINESS STRATEGY FOR THE PERIOD 2011 – 2020 OF THAI NGUYEN WATER JOINT STOCK COMPANY CONTENT INTRODUCTION.....................................................................................................1 CHAPTER I: BASIC CONCEPTS ON BUILDING BUSINESS STRATEGIES.....2 1.1. Overview of business strategies......................................................................2 1.1.1. Concepts....................................................................................................2 1.1.2. Strategy of business unit level.....................................................................2 1.2. Vision, mission and values..............................................................................3 1.3. Strategic analysis............................................................................................3 1.3.1. Analyzing macroeconomic environment......................................................4 1.3.2. Industry environment analysis.....................................................................4 1.4 Internal Analysis..............................................................................................5 1.5. SWOT analysis...............................................................................................6 1.6. Selecting business strategy..............................................................................7 1.6.1. Selecting strategic plans by using IFE matrix...............................................7 1.6.2. Selecting strategies by scoring.....................................................................9 CHAPTER II: ANALYZING THAI NGUYEN WATER JOINT STOCK COMPANY.............................................................................................................10 2.1. Overview.......................................................................................................10 2.1.1. Company Name.......................................................................................10 2.1.2. Address....................................................................................................10 2.1.3. Mission....................................................................................................10 2.1.4. Visions.....................................................................................................10 2.1.5. Core competencies....................................................................................11 2.1.6. Some major business areas........................................................................11 2.1.7. Features of the main products....................................................................12 2.1.8. The formation and development of the Company.......................................12 2.2. Economic environment analysis of Thai Nguyen Water JSC........................14 2.2.1. External Analysis of Thai Nguyen Water JSC............................................14 2.2.2. Porter's 5 Forces Analysis.........................................................................19 2.3. Internal Analysis of Thai Nguyen Water Joint Stock Company....................26 2.3.1. Analysis of human resources:....................................................................26 2.3.2. Analysis of facilities and technology:.........................................................27 2.3.3. Analysis of technology:.............................................................................28 2.3.4. Analysis of financial potential...................................................................29 2.3.5. Assessing strengths and weaknesses of the Company:................................30 2.4. Identifying strategies by using SWOT and IE matrix:..................................33 2.4.1. Identifying strategies by using SWOT matrix:............................................33 2.4.2. Identifying strategies by using I.E matrix:..................................................34 CHAPTER III: CHOOSING BUSINESS STRATERGY AND IMPLEMENTATION SOLUTIONS......................................................................37 3.1. Choosing business Strategy..........................................................................37 3.1.1. Choosing business Strategy by using scoring approach...............................37 3.1.2. The content of the chosen strategy.............................................................38 3.2. Strategic solutions.........................................................................................38 3.2.1. Investment Solutions.................................................................................38 3.2.2. Technological solutions:...........................................................................42 3.2.3. Human resource solutions.........................................................................44 3.2.4. Solutions for network:...............................................................................45 3.2.5. Effectiveness and feasibility of the strategy:...............................................46 3.3. Implementation.............................................................................................49 3.4. Proposal and recommendations:....................................................................50 Group № 5 -GaMBA01.M08.09 CONCLUSION.......................................................................................................51 REFERENCES APPENDIX Group № 5 -GaMBA01.M08.09 LIST OF TABLES AND FIGURES Figure 1.1: Strategy planning process........................................................................3 Figure 1.2: Porter's Five Forces Model......................................................................4 Figure 1.3: IFE matrix...............................................................................................7 Figure 2.1: Organization structure of Thai Nguyen Water Joint Stock Company....14 Figure 2.2: I.E Matrix..............................................................................................36 Figure 3.1: Diagram of technological line in the water treatment plant...................43 Table 1.1: Swot matrix.......................................................................................……6 Table 2.1: Summary of advantages and disadvantages............................................ 21 Table 2.2: Five competitive forces.......................................................................... 27 Table 2.3: Labor of Thai Nguyen Water JSC.......................................................... 28 Table 2.4: Land of Thai Nguyen Water JSC........................................................... 29 Table 2.5: Sales, Net income after tax, Owner's equity, Assets............................... 31 Table 2.6: Liquidity Ratio....................................................................................... 31 Table 2.7: Profitability Ratios..............................................................................…31 Table 2.8: Strengths and Weaknesses of the company........................................…34 Table 2.9: SWOT Matrix.....................................................................................…35 Table 2.10: Internal Analysis.................................................................................. 36 Table 2.11: External Factor Evaluation.................................................................. 37 Table 3.1: Transcript of plan Assessment........................................................... …39 Table 3.2: Planned training programs...................................................................... 47 Table 3.3: Estimated volume of the main pipelines................................................. 48 Table 3.4: Estimated volume of distribution and transmission lines........................48 Table 3.5: Strategic solutions.................................................................................. 51 Group № 5 -GaMBA01.M08.09 INTRODUCTION To succeed in the market, to get high business efficiency and profitability, any enterprise needs to build business strategies. Strategy shows consistency in the business method, to avoid wasting resources on unnecessary activities. It is a management tool to identify priorities or allocate resources to business activities. The strategy is also a basis to build the reasonable organizational structure to support business activities, to be able to carry out the strategic objectives set out, is the foundation for building detailed business plan. A good strategy should be based on general theories of strategic management and be applied to the actual business conditions and consistent with the enterprise. To choose appropriate strategies, business administrators should analyze internal and external factors in order to find out strengths, weaknesses, opportunities and threats by using tools such as: SWOT matrix, IE matrix and method of scoring. Thai Nguyen Water Joint Stock Company has just been transformed into Joint Stock Company. As the company has to achieve business targets as other joint stock companies and perform public obligations under the directions and management of the State authorities, it is very essential to develop the company strategy at the moment. After the research process, we performed the capstone project report: "Building the business strategy for the period 2011 - 2020 of Thai Nguyen Water Joint Stock Company” as a basis for the company to identify its purposes, direction, have policies and business decisions in line with objectives. Beside the introduction, conclusion, references and appendix, the report is divided into three chapters: - Chapter 1: Basic concepts on building business strategies. - Chapter 2: SWOT analysis of Thai Nguyen Water Joint Stock Company. - Chapter 3: Choosing business Strategy and implementation solutions Group № 5 -GaMBA01.M08.09 1 CHAPTER I BASIC CONCEPTS ON BUILDING BUSINESS STRATEGIES 1.1. Overview of business strategies 1.1.1. Concepts 1.1.1.1. Concepts on strategy There are various definitions on strategy, deepening on various authors’ points of view. According to Johnson and Scholes, in a rapidly changing environment, "Strategy is the direction and scope of an organization over the longterm: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations". 1.1.1.2. The role of business strategy - Identify objectives, directions of all business activities. - Capture and take advantage of business opportunities, and overcome proactively the risks and threats in the market. - Contribute to improve the efficiency of resource usage, strengthen competitive competency to ensure the sustainable development. - Create solid bases to set out the policies and decisions on production and business in line with market fluctuations. 1.1.2. Strategy of business unit level - Strategy of business unit level is both commitments and actions to help the enterprise achieve competitive advantages by exploiting its core competencies in specific markets. - Strategy of business unit level shows the way that strategy administrator makes an action plan to use the Company’s differential competencies and resources to achieve competitive advantages in comparison with other competitors in the market. - Building strategy of business unit level should include three elements: Customer’s needs or what to be satisfied; Groups of customers or who to be satisfied; Differential competencies or how to satisfy customers’ needs. Strategy of business unit level always include: Competitive strategy based on competitive Group № 5 -GaMBA01.M08.09 2 advantages, market competitive strategy dividing market strategic position, investment strategy and strategy of business unit level in the product life circle. 1.2. Vision, mission and values - Vision is the main purpose that the enterprise wants to achieve in the long term period. -Mission presents the reason for the organization’s existence and indicates what it will do. - Main objectives determine what the organization hopes to meet in middle and long term period. The requirements for strategic target system are: being consistent, specific, feasible, and flexible. Strategic targets are often influenced by some internal and external factors of the environment where the enterprise is operating. 1.3. Strategic analysis Functions, duties & strategic targets of the enterprise Analyzing the enterprise internally Analyzing external environment Selecting strategies Company level strategy Strategies of business basis and functional units Implementing strategies Checking and assessing the implementation Feedback Figure 1.1: Strategy planning process Group № 5 -GaMBA01.M08.09 3 1.3.1. Analyzing macroeconomic environment - PEST researched influences of macro environment, including: Political factors; Economics factors; Socio-cultural factors; Technological factors. These factors influence on the organization independently or in combination with other factors. - PEST is always used in business strategy and marketing strategy analysis. - Macroeconomic environment analysis (PEST) show us part of the answer to the question: What is the enterprise facing with? 1.3.2. Industry environment analysis New entrants Industry competitors Buyers Suppliers Substitutes Figure 1.2: Porter's Five Forces Model - Buyers: Buyers are the most powerful because the Company’s business activities depend on them while they do not depends on the Company. In such case, buyers are a threat to the Company. - Suppliers: Suppliers are those who have the highest bargaining power because the Company’s business depends on them while they do not depend on the Company’s business. In such case, suppliers are a threat to the Company. Group № 5 -GaMBA01.M08.09 4 - Industry competitors: Rivalry level between existing companies is a function of the industry competition structure, demand conditions and exit barriers. Stronger demand conditions make the competition between existing companies more moderate and create opportunities for expansion. When demand conditions are weak, the competition may be severe, especially in important industries having high exit barriers. - Potential competitors: Risk of entry by potential competitors is a function of the height of entry barriers. The higher the entry barrier is, the lower is the risk of entry by potential competitors, the more profit can be obtained - Substitutes: Substitutes are products that the Company serves the customers’ demand which is similar to the demand that the analyzed industry is serving. The higher the similarity of substitutes is, the lower the bargaining power of companies in the industry is, and hence, the lower is the obtained profit. 1.4 Internal Analysis - Analysis and evaluation of resources: Resources of business includes human resources and tangible assets and intangible resources. + Human Resource is the core element in all business activities to determine the success or failure of enterprises. + Tangible assets include factors such as cost of production, factories, machinery, equipment, materials…. + Intangible resources: In addition to the resources above, each business or organization has other resources which are identified only by the perception capacity. - Analysis of operations of functional units in the enterprise: + Marketing Department: Marketing is a system of activities relating to research, predict, identify needs and meet expectations of target customers to built marketing combination better than competitors in the same period and in each market segmentation. + Personnel Department: Personnel Management is activities relating to recruitment, training, use, treatment, evaluation, and encouragement of worker loyalty to the organization. Group № 5 -GaMBA01.M08.09 5 + Financial Accounting Department: financial and accounting function relate to the mobilization and use of material sources of the enterprise in each period, the accounting implementation in all stage of business and manufacturing. + Production is the process of converting the inputs into the outputs at each stage of business and manufacturing. 1.5. SWOT analysis Analyzing and assessing those above factors can help enterprises generate the analysis and evaluation of business environment, and rate them according to their directions and influence level. However, this is not enough because strengths, weaknesses, opportunities and threats may happen in future with different stability. In order to establish strategic thinking based on strengths, weaknesses, opportunities and threats, SWOT matrix should be used. SWOT matrix is used to list all factors of the enterprise in suitable order and position. According to the relationship between factors, analyzer must choose suitable strategic solution by combining: Strenghts + Opportunities (SO); Strenghts + Threats (ST); Weaknesses + Opportunities (WO); Weaknesses + Threats (WT). Table 1.1: Swot matrix SWOT MATRIX Opportunities (O) 1… Strengths (S) Weaknesses (W) 1… 1… 2… 2… 3… SO strategies 3 WO strategies Using strengths to Overcome weaknesses to exploit opportunities utilized opportunities 2… 3… Threats (T) ST strategies 1… Using strengths to 2… avoid threats Group № 5 -GaMBA01.M08.09 6 WT strategies Minimize weaknesses and avoid threats Using SWOT matrix is to analyze environmental factors, creates the combination between internal and external factors and feasible solutions. This is one of the most important bases for the enterprise to select effective competitive strategies. 1.6. Selecting business strategy 1.6.1. Selecting strategic plans by using IFE matrix: (Matrix assessing internal factors) Figure 1.3: IFE matrix Internal factors are considered very important in all strategies and business target which are set up by the Enterprise. After checking all internal factors, strategy administrator needs to set up a matrix of these factors to consider reactivity and realize strengths and weaknesses. Afterwards, the administrator will help the Enterprise to utilize maximum its strengths and prepare internal resources to deal with weaknesses and work out solutions for these mentioned weaknesses. In order to implement IEF matrix, it is necessary to implement the 5 following steps: Step 1: Composing a list of 10-20 main factors, including strengths and weaknesses basically affecting the enterprises and targeted goals. Step 2: Sorting the importance rated from 0,0 (not important) to 1.0 (very important) for each factor. The importance of each factor depends on its influence on the success of the Enterprise in the industry. The total importance score of all factors must be 1.0. Group № 5 -GaMBA01.M08.09 7 Determining the importance score of each factor from 1-4. In which, 4 is very strong, 3 is comparatively strong, 2 is comparatively weak and 1 is very weak. Step 3: Multiplying the importance of each factor with its importance score to identify the score of each factor. Step 4: Add scores for all factors to determine the total score of the matrix. Assessment: Total score of the matrix from 1-4, and does not depend on the quantity of important factors in the matrix. - If the total score is under 2.5, the Company’s internal factors are weak - If the total score is above 2.5, the Company’s internal factors are strong * Selecting strategic plans by using EFE matrix: (assessing external factors) EFE matrix assesses external factors, generates and summarizes main opportunities and risks of external environment which affect the enterprise’s business activities. Therefore, the administrator of the enterprise can assess its reaction to opportunities and risks and considers external influences, the Company’s advantages and disadvantages. To set up this matrix, 5 following steps should be done: Step 1: Setting up a list of 10 to 20 main opportunities and threats which can affect the success of the enterprise in the industry. Step 2: Rating the importance with score from 0,0 (not important) to 1.0 (very important) for each factor. The importance of each factor depends on its influence in the business/industry in which the enterprise is operating. The total score of all factors must be 1.0. Step 3: Determining the importance score from 1 to 4 for each factor. The importance score of each factor depends on each company’s reaction to it. In which, 4 is best reaction, 3 is above average, 2 is average, and 1 is bad reaction. Step 4: Multiplying the importance of each factor with its importance score to determine the score for each factor. Step 5: Add scores for all factors to determine the total score. Group № 5 -GaMBA01.M08.09 8 Assessment: The total score of the matrix does not depend on the quantity of important factors in the matrix. 4 and 1 are the highest and lowest score respectively. If the total score is 4, the Company’s reaction to opportunities and threats is goof. If the total score is 2,5, the Company’s reaction to opportunities and threats is at medium level. If the total score is 1, the Company’s reaction to opportunities and threats is weak. 1.6.2. Selecting strategies by scoring This is the tool to select plans by composing tables. To carry out the selection, the below steps should be done: - Step 1: Developing plans (2 plans and more). - Step 2: Determining general criteria (there should not be less than 8 criteria). - Step3: Scoring criteria of each plan (Weightage column can be added) - Step 4: Calculate the total score of each plan. - Step 5: Selecting the plan having the highest score. Scoring from 1 to 10 (Score 1: least important, Score 10: very important). Group № 5 -GaMBA01.M08.09 9 CHAPTER II ANALYZING THAI NGUYEN WATER JOINT STOCK COMPANY 2.1. Overview 2.1.1. Company Name - Vietnamese Name: CÔNG TY CỔ PHẦN NƯỚC SẠCH THÁI NGUYÊN - Abbreviation of Vietnamese name : CÔNG TY CP NƯỚC SẠCH THÁI NGUYÊN. - English name: THAI NGUYEN WATER JOIN STOCK COMPANY. - Abbreviation of English name: TWACO. 2.1.2. Address: Group 1, Trung Vuong ward, Thai Nguyen City, Thai Nguyen province. - Tel: 0280.3855.252 - 0280.3851.537; Fax: 0280.3852.976. - Email: [email protected] 2.1.3. Mission - Provide clean water to people, units and organizations in Thai Nguyen province. - Contribute to the improvement of health and community benefits as well as to the economic development of Thai Nguyen province. 2.1.4. Visions - In the next 10 years, Thai Nguyen Water Joint Stock Company will become the leading water company in Northern area. The Company can provide best services to customers, and built trust in the relationship with Thai Nguyen People's Committee. - Thai Nguyen Water Joint Stock Company has committed to become a reputable, responsible and self reliant company having reliable finance without the State subsidies. The Company will improve the financial capacity to invest in some water supply plans in remote areas of Thai Nguyen province. - Customers are not only a major factor but also a reason for the existence of the Company. Therefore, the Company will strive to improve reputation as an enterprise serves customers well, understands the needs and demands of customers, is willing to provide excellent services to adapt customers’ expectations and voluntary paid. Group № 5 -GaMBA01.M08.09 10 - To satisfy customers, staff and workers should be regularly trained, highly motivated to serve enthusiastically. Conversely, the Company always cares about improving working conditions and benefits of workers. 2.1.5. Core competencies - Receive State investments of infrastructure such as land, projects for water exploitation and supply network. - Given the right to possess large groundwater sources in Thai Nguyen province, exploit actively the existing surface water sources. - Have access to advanced technologies of water exploitation and supply operation. - Have experience with the management model of production and business operation of clean water. Labor forces are qualified, professional, and highly skilled. 2.1.6. Some major business areas - Water manufacturing business; - Nonalcoholic beverage manufacturing business; - Project Planning and Pre-project Consultancy, construction project management; topographic - geological surveys, underground water test drilling and exploration drilling. - Design water supply and drainage systems for households, industry, agriculture, design structures of industrial, power stations; - Supervise constructions including: Civil construction works, water supply and drainage system construction works, transmission lines, power plant construction works; the installation of equipment for civil and industrial plants; - Water meter testing; - Trade of materials, equipment, chemicals, technologies of water supply and drainage sector; - Design and manufacture materials, equipment, and technologies of water supply and drainage sector; - Construct civil works, industrial works, traffic works, irrigation works and infrastructure. Group № 5 -GaMBA01.M08.09 11 2.1.7. Features of main product - Clean water is the essential, irreplaceable, indispensable element for human life. It is the input of several sectors. - Meeting the needs for clean water is one of criteria for evaluating urban classification. This is the superiority of the Vietnamese regime to the civil life. - Product is usually sold out immediately. 2.1.8. The formation and development of the Company Thai Nguyen Water Joint Stock Company was formerly known as Thai Nguyen Water Factory established on 25/12/1962. After many changing forms, this state company was transformed to Thai Nguyen Water Limited Liability Company in October 2005 and to Thai Nguyen Water Joint Stock Company in December 2009. January 2010, the Company completed the equitization. * Features: As a joint stock company operating under the Enterprise Law and the charter of the Company, Thai Nguyen Water Joint Stock Company became a legal entity since the business registration date. This company can perform independent accounting, have its own seal, open bank accounts; organize and operate under the Enterprise Law and the charter of joint stock company; register business as prescribed by law. But the Company must also perform public services under administration of State management agencies. * Organization structure: The organization model of the Company includes the Management Board, Supervisory Board and the executive management structure. - The Management Board is voted by the General Assembly of shareholders. There are 7 members in the Board. They elected one member to be the Chairman and concurrent Director; one vice president who is the Standing member of the Board and the concurrent Secretary of the Company. - The executive management structure: Group № 5 -GaMBA01.M08.09 12 + Top position of the structure is the CEO concurred by the Chairman of the Management Board; + To assist the CEO, there are 2 or 3 directors and one accountant chief. They are proposed by the CEO and decided by The Management Board. Supervisors of functional departments and other parts are proposed and decided by the CEO after the ratification of the management Board; - Supervisory Board which is elected by the General Assembly of Shareholders, consists of 03 people, including 01 head of the board (head of the board can work full-time or part-time, other members of the Supervisory Board work concurrently). Supervisory Board members must include at least 01 member having accounting or business finance qualification. The time frame of the management Board and Supervisory Board is 5 years. Operations of the management Board, Supervisory Board and Executive Management Structure are prescribed by law, the charter of the Company and management regulations. The charter determines duties, rights of the General Assembly of Shareholders as prescribed by law. Group № 5 -GaMBA01.M08.09 13 The General Assembly of shareholders Board of director Supervisory Board Director 02-03 Vice directors Financial accounting Department Construction factory Planning and Investment Department Thai nguyen Water factory Sales Department Mantaince Department Tuc Duyen Water factory Technology Department Song CongWater factory Tich Luong Water factory Excecutive Department Trai Cau Water factory Đại Từ Water factory Project Management Unit of Investment & Construction Water meter Centre Construction advisory center Figure 2.1: Organization structure of Thai Nguyen Water Joint Stock Company 2.2. Economic environment analysis of Thai Nguyen Water JSC 2.2.1. External Analysis of Thai Nguyen Water JSC 2.2.1.1. Economic factors - Thai Nguyen Economy has been being had many advantages to improve trading and producing. Important sectors have increased production capacities. Economic sectors especially Non-state economic sector has insisted its position in Vietnam economy. Thai Nguyen GDP growth in 2010 was 12%. Estimated average growth rate in the period 2011 – 2015 will reach 12.0 – 12.5% per year and in the period of 2016 – 2020 it will reach 11.0 – 12.0% per year. GDP per capita in 2015 may hit 1.300 USD, from 2.200 to 2.300 USD in 2020. Vietnam economy has had much chaos, such as: High interest rate, high Group № 5 -GaMBA01.M08.09 14 inflation. Because the two factors have made expensive input of the Company, high product costs, the competitive capacity has been impacted. In general, Thai Nguyen Water Joint Stock Company has advantages due to economic factors, such as: The higher economy and life standards develop, the more demands for High Quality Services increase. This is a good chance for the Company to use economic leverages to invest plans, expand production, and modernize technology to adapt increasing water demand. 2.2.1.2 Legal – Politic factors Thai Nguyen Province is regarded as the cultural and economic centre of Northern ethnics. So it has received attention and appropriate investment of the State. Till now, Thai Nguyen has six industrial zones approved for Construction by the Prime Minister: Song Cong Industrial Zone I (220ha), Song Cong Industrial Zone II (250ha), Nam Pho Yen Industrial Zone (200 ha), Tay Pho Yen Industrial Zone (200ha); Diem Thuy Industrial Zone (350ha); Quyet Thang Industrial Zone (200 ha). This is also a prerequisite for the provincial economic development in general and water business in particular. - According to the Resolution of the 16th Party Congress (Period 20102015) of Thainguyen city, the duty was posed: To ensure over 90% of households in Thainguyen city have access to clean water in 2015 and 95% by 2020. In January 2010, Thainguyen Water Joint Stock Company finished its equitization and the new model officially started work. The company has good condition to have access to funds to invest in technologic researches and facility applications. The new model has inspired the owning spirit of employees and has made the leaders more dynamic, responsible, creative and decisive. Besides facilities after the equitization, the company is facing with many difficulties, such as: Some water supply plans are still being done in districs with low economic efficiency; the inadequacy of the financial mechadism without the clear divide between Group № 5 -GaMBA01.M08.09 15