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Luận văn tốt nghiệp MBA Xác định kế hoạch chiến lược kinh doanh của công ty XNK thủ công mỹ nghệ ĐONG THANH DETERMINE STRATEGIC PLANNING BUSINESSOF DONG THANH HANDICRAFTS IMPORT AND EXPORT CO.,LTD NINH BINH VIET NAM Analysis of macro environment Analysis of economic environment Analysis of the influence by political conditions . Analyzing the change in law and policy Analyzing the change in social conditions Analyze influences of science – techniques – technology
LUẬN VĂN Xác định kế hoạch chiến lược kinh doanh công ty XNK thủ công mỹ nghệ ĐONG THANH DETERMINE STRATEGIC PLANNING BUSINESS OF DONG THANH HANDICRAFTS IMPORT AND EXPORT CO.,LTD - NINH BINH - VIET NAM CONTENTS INTRODUCTION The subject imperativeness Researching Purpose of the theme Object and scope of research The scientific and practical meaning of the topics 4.1.Theoretically: 4.2 Reality: Structure of the capstone project: Chapter I: The basically theoretical issues about business strategy Chapter II: Status of the business strategy of the Dong Thanh Import and Export Co Ltd., Chapter III: Determine strategic Planning Business of the Dong Thanh Import and Export Co Ltd., 2015 CHAPTER I: BASIC THEORY IN THE BUSINESS STRATEGY 1.1 An overview of business strategy 1.1.1 Concept and characteristics of the business strategy 1.1.1.1 Concept of business strategy 1.1.1.2 Highlights of the business strategy 10 1.1.2 Accessibility - level business strategy: 10 1.1.2.1 The point of access to the business strategy of the company: 10 1.1.2.2 The levels of the business strategy of the company 11 1.1.3 The process of building business 13 1.2 Identify vision, mission and values: 17 1.3 Analysis of the base to build strategies 17 1.3.1 Analysis of macro environment 17 1.3.1.1 Analysis of economic environment 18 1.3.1.2 Analysis of the influence by political conditions 19 1.3.1.3 Analyzing the change in law and policy 19 1.3.1.4 Analyzing the change in social conditions 19 1.3.1.5 Analyze influences of science – techniques – technology 21 1.3.2 Analize the industry environment 21 1.3.2.1 Analyze competitors 23 1.3.2.2 Analyzing pressure of customers 25 1.3.2.3 Analyze pressure of supplier 25 1.3.2.4 Analysis of pontential competitors: 26 1.3.2.5 Analysis of pressure of new product for replacement 28 1.3.3 Internal analysis of companies 28 1.3.3.1 Analysis of production capacity 28 1.3.3.2 Analysis of technogical knowledge 29 1.3.3.3 Analysis of financial capacity for innovation and development 29 1.3.3.4 Analysis of management capacity 30 1.3.4 Table of general SWOT analysis 30 1.4 Set up and select business strategy 31 1.4.1 Competitive strategies: 31 1.4.1.1 General strategy: (General strategy) 31 1.4.1.2 Part strategies 32 1.4.2 Strategy selection (GREAT) 33 1.4.2.1 Orientation to select strategies: 33 1.4.2.2 Methods of selecting strategic plans 33 1.4.2.2 The most effective strategy selection: 35 1.5 Strategy –oriented business implementation organization 36 1.5.1 Business Organization structure: 36 1.5.1.1 Enterprise structure 36 1.5.1.2 Organizational structure and business management 36 1.5.1.3 Requirements for organizational structure management 36 1.5.1.4 Factors affecting management organization structure 37 1.5.2 Test and quality evaluation: 37 CHAPTER II: THE CURRENT SITUATION OF BUSINESS OPERATION DONG THANH HANDICRAFT ART ARTICLES IMPORT AND EXPORT LIMITED COMPANY 39 2.1 Overview of art emberoidery market in Vietnam: 39 2.1.1 Overview of traditional craft: 39 2.1.2 The market and current situation of import and export: 40 2.1.3 Important factors helping handcraft industry develop: 41 2.2 The business operation of Dong Thanh Import & Export Company Limitted 43 2.2.1 Establishment and development: 43 2.2.2 Organizational structure: 43 2.2.3 Human resources: 45 2.3 Fact on operation and development process of Dong Thanh handicrafts Import & Export Co., Ldtin period 2002 - 2008: 45 2.4 Analysis of external environment: 46 2.4.1 Analysis of macro environmental: 46 2.4.1.1 Economic factors: 46 2.4.1.2 Factors of political and law environment: 48 2.4.1.3 Factors of technical environment: 48 2.4.1.4 Factors of cultural and social environment: 49 2.4.2 Micro-factors 49 2.4.2.1 The pressure of customers: 49 2.4.2.2 Competitors: 50 2.4.2.3 The pontential competitors: 55 2.4.2.4 Suppliers: 56 2.4.2.5 New substitute products: 56 2.5 Analyzing the internal environment factors affecting to the development of Company: 56 2.5.1 Human resource: 56 2.5.2 Marketing Strategy 57 2.5.2.1 Products: 57 2.5.2.2 Price: 58 2.5.2.3 Distribution: 59 2.5.2.4 Advertisement and sale promotion: 59 2.5.2.5 Financial and Accounting: 59 2.5.2.6 Research and development 60 2.6 Mission and Vision: 63 2.7 Analysus the strategy targets: 63 2.8 Evaluation of strategy choices: 64 CHAPTER III: DETERMINE STRATEGIC PLANNING BUSINESS OF ĐÔNG THÀNH HANDICRAFTS IMPORT AND EXPORT Co.Ltd TO THE YEAR 2015 65 3.1 Building the development objectives of Dong Thanh Company to the year 2015 65 3.1.1 The development strategy -oriented points of Dong Thanh Company 65 3.1.2 Building the development oriented objectives of Dong Thanh Company to the year 2015 65 3.1.2.1 Analysing the implementation of several key indicators in the past time 65 3.1.2.2 The oriented development of fine art embroidery to the year 2010 66 3.1.2.3 Building the development oriented objectives of Dong Thanh Company to the year 2015 66 3.2 Buiding the strategy of Dong Thanh Company to the year 2015 68 3.2.1 Methods of strategy of Dong Thanh Company: 68 3.2.1.1 The general strategy: 68 3.2.1.2 Overall management strategy: 69 3.2.2 A number of strategic methods of basic functions to implement successfully the business strategies: 69 3.2.2.1 Marketing - Mix: 69 3.2.2.2 Finance: 71 3.2.2.3 Human resource: 71 3.2.2.4 Production: 71 3.2.2.5 Research and Development: 72 3.3 Proposals for successful stratefies implementation: 72 CONCLUSION 73 DETERMINE STRATEGIC PLANNING BUSINESS OF DONG THANH HANDICRAFTS IMPORT AND EXPORT CO.,LTD - NINH BINH - VIET NAM INTRODUCTION The subject imperativeness International economic integration is a key factor for socioeconomic development of any country In the context of regional and global integration are developing both depth and breadth, the strengthening of cooperation with the outside world will open up significant opportunities and bring benefits for long-term socioeconomic development, especially in the field of trade, investment and technological transfer Vietnam economy is currently running in accordance with market mechanism with management of Government, gradually integrating into the regional and global economy During the past time, Vietnam has strong ties to expand bilateral economic and multimedia goods; development investment relations with about 180 countries and territories, participating religion and international commercial co-operation organizations and institutions such as ASEAN - AFTA, ASEM, APEC, and WTO Participating in the process of internationally economic integration, one could create great opportunities for companies to expand markets to acquire advanced management experience and application of modernly scientific and technological achievements On the other hand, the participation of internationally economical integration, Vietnam must make commitments to the international community as opening the domestic market, tariff reduction This increased pressure in competition for companies and requires domestic companies to quickly enhance their competitiveness in both domestic market and abroad to survive and develop As a limited liability company operating in the field of production and trade of products of traditional handicraft, Dong Thanh Import and Export Co Ltd., is not outside the general trend, on the other hand, they usually face with the quick change of the environment, fiercer and fiercer competition in the industry During the past time, the company has been trying to find out a long term business strategy to have product popular in the market However, the fact that at the present time, the production and business plan of the company is just set up only on the basis of short-term, which lacks investment in a more long-term strategy This consequence there is a limit in using resources of the company effectively, misses business opportunities and must hardily face with change in the market Originating from that fact, may find that planning of a strategy to effectively use their resources to exploit opportunities and limit the risk to be urgent task of the Dong Thanh Import and Export Co Ltd., handicrafts in the present time For that reason, we select the theme: "Determine strategic Planning Business of the Dong Thanh Handicrafts Import and Export Co Ltd., up to 2015" to study and complete training programs of business masters Researching Purpose of the theme In Vietnam, the embroidery is a traditional handicraft which has been formed for a long life The history of this traditional profession is originally associated with the spiritual history of the Vietnam Women in the past From the first century, a part from the flag embroidered "it revenge of the" in the revolution of Hai Ba Trung, Vietnamese women also used to embroidery to decorate their houses, moreover, is to show their emotions, feeling and confidence and make themselves beautiful However, until now no one knows when did the embroidery of Vietnam formed? Who was the first person having idea to change sewing and embroidery to be a profession of art? Legend has it that beginning of the XIII century, embroidery in Vietnam was marked a turning point of new development with the king in hiding in the village of Tran Van Lam commune, Ninh Hai, Hoa Lu district, Ninh Binh province Here, people have learned experience and folk embroidery technique in Vietnam to widespread a handicraft work with a bold art to serve the Tran Dynasty Inheriting this traditional, Import and Export Company Limited handicrafts run by Dong Thanh Nguyen Thi Tu director has outlined a new direction for the industry by combining the characteristics of art painting and the quintessence of traditional embroidery techniques to create traditional embroidery products Through the topic of human - natural environment - the culture and traditions hidden in attributes of human body parts, embroidery art has brought something of how we see the world, the image of a territory and the music can be expressed in a traditional art Development of traditional embroidery craft through the development of companies, especially export-import company specializes in the Dong Thanh Import and Export Co Ltd., is one of the factors positively arouse traditional The problem is to mount the village with the development strategy of the business from which makes unique hand-embroidered products to domestically and international market Deriving from the idea that the problem is that researching interests are: - Analysis of environmental factors affecting the Import and Export Co., handicrafts East City to identify opportunities, risks combining with the reality of the elements within the company to find out strengths and weaknesses to identify goals and vision to propose strategies to develop production and business sectors in embroidery handicraft company in 2015 - Strategic Planning Development Co., Ltd Import and export handicrafts City East on the basis of theoretical studies of business administration in general and strategic management business in particular, where special mount strategy is the development of traditional hand embroidery of Ninh Binh province Object and scope of research Object and scope for researching in topics are the actual situation of production and business of embroidery and development strategy of traditional embroidery craft associated with the development strategy of the Import and Export Co., Ltd Player and strategic implementation solution of the company The scientific and practical meaning of the topics 4.1.Theoretically: Researching results have contributed to systematization of some basic theories about business administration, strategic administration, and strategic mockups to enhance competitiveness and contribute to enrich the basic criteria to develop the companies 4.2 Reality: - Based on actual situation of companies, the project helps business owners and administrators to have overview about the current state of business today - Some contents mentioned in the theme may be extracted from references for companies to orient long term operation strategy and create long-term basis for companies to actively develop business oriented in fine art embroidery, which is suitable with the environment on the basis of identification, take advantage of opportunities, avoid risks, and uphold the advantages of the companies in the business Structure of the capstone project: Besides the opening and conclusion, content of capstone project is presented in three chapters, including: Chapter I: The basically theoretical issues about business strategy Chapter II: Status of the business strategy of the Dong Thanh Import and Export Co Ltd., Chapter III: Determine strategic Planning Business of the Dong Thanh Import and Export Co Ltd., 2015 CHAPTER I: BASIC THEORY IN THE BUSINESS STRATEGY 1.1 An overview of business strategy 1.1.1 Concept and characteristics of the business strategy 1.1.1.1 Concept of business strategy In terms of history, business strategy was firstly used in the military then penetrated into other areas of economic and social life Since the 50th of century XX, business strategies have been implemented widely applied in the field of management and management of strategy has been confirmed as a direction, an effective management method Due to the different approaches of strategy of that given concept is also different, so far has not had a general concept and agreement in categories We could give out some opinions as followed: According to competitive approaching way, Michael Porter said: "Business strategy is the art of setting up stable competitive advantage to defense” In accordance with K Ohmae, "The aim of the strategy is to bring the most favorable things for one side and assess time to attack or retreat, determine the proper boundaries of compromise" and he stressed: "If there is no competitors, there will be no strategy, the sole purpose of the strategy is to ensure to have sustainable victory for the competitors” According to planning approach, James.B.Quinn said: "Business strategy is a format or a plan to coordinate the main targets, policies and action plans into an overall adhesive together and according to William.J.Gluech "business strategy is a plan with uniformity, comprehensiveness and coordination designed to ensure that the fundamental goals of the company will be conducted According to the approach as business strategy, that is one category of management science, Alfred Chandler wrote: "Business strategy is to identify the fundamental and long term goals of the business, select policies, and action plan to allocate resources to achieve those fundamental goals In general, the above concepts of the term encompass both and reflect the following: The target of the strategy Implementation duration The process of strategic decision-making Environmental factors Strong and weak point, opportunities and risks of the business in general and for each operation in particular Thus, we find that the business strategy of the company is understood as unified set of targets, solutions and usage means to have that target Business strategy reflects the activities of business units including the process of setting targets, measures and means used to achieve that goal 1.1.1.2 Highlights of the business strategy To better understand the business strategy categories we need to examine its characteristics to distinguish it from the concepts and categories concerned Business strategy consists of the following basic characteristics: - Business strategy often verifies the fundamental goals, the business orientation of each company in each period and is fully consistent in all aspects of production and business activities of companies to ensure business continuity and stable development (more than one year) - Business strategy ensures to mobilize and combines exploitation and utilization of human resources of company at the present and in the future maximally and upholds the advantages and seizes opportunities to gain advantage in business market - Business strategy must be reflected through a continuous process from the construction of strategic and organizational implementation, testing, evaluating and adjusting strategies - Business strategy thought to have been carried the victory won in the business market (not to take full advantage of his victory) - Business strategy is usually built for a relatively long period (3 years to years), tend to shorten depending on the particular segment The above characteristics are easily distinguished categories with strategic concepts and categories concerned The concept closest to the strategy is "plan", meanwhile in fact many people confuse the concept together Considering the strategic order of business to be formed on the basis of analytical and diagnostic environment, in turn Left strategy as a basis for implementation planning strategies Striking features of the strategy are its orientation and solutions confirmation, major policy in key targets, in the planning, balance orientation is mainstream, all the targets are quantified and linked together to be a system of target reflecting production and business of companies comprehensively 1.1.2 Accessibility - level business strategy: 1.1.2.1 The point of access to the business strategy of the company: Term “strategy” derived from long time ago, in the past, this term was first used in the military Today, this term has been used in most areas: economy, politics and social culture Especially in the economic field in the range of macro and micro In the macro range, we can have concepts such as "industry development strategy," "strategy towards the industrialization in export”, in terms of micro-scope strategy, there is also combination with concepts, company management categories forming the term "marketing strategy", "production strategy", "Business strategy" Here, we study some approaching ways to business strategy of the companies According to classical point of view: This view appeared before 1960s, according to this view, the company may plan and optimize all the input factors to create a competitive advantage to achieve long-term targets effectively and optimize 10 price to be cheap For “Price acceptance ability”, there is no customer to agree and accept its price of level (high level) There is 54,3% of customers accepts its price of level (average level) Therefore, the current price strategy of Dong Thanh is rather high in comparison with the embroidery market This essential point of company 2.5.2.3 Distribution: In the current market economy, the distribution plays an important role in making the supply and demand to meet each other The production usually concentrates in some places but the consumers allocate everywhere and have different requirements The distributing strategy is a strong point of company Basing on its operation experience, Dong Thanh Company chooses the method of “mua đứt bán đoạn” through the distributors, retailers, and directly to the consumers This method guarantees the quick distribution and the responsibility for its customers to built customers’ reliability To December 2008, Dong Thanh has had 12 traditional customers in Western Europe and America; they are the big distributors having the supermarket system to provide to the foreign consumers In addition, Dong Thanh also associates to open two showrooms in Paris and Rome, where it introduces products as well as displays and performs the traditional handmade embroider 2.5.2.4 Advertisement and sale promotion: Advertisement is a way to push up the consumption and help consumers to understand the products and enterprise Every year, Dong Thanh Company spends about billion VND for advertisement It launches the flexible advertisement strategy through the traditional methods like taking part in the international fairs (Frankfurt, German and Paris, France), advertising on the local television, the specific magazines, and printing the fliers… There are sale promotion activities such as discounting for the distributor basing on the quantity, rewarding the retailers (shops) when achieving the high sale target, tourism program with Dong Thanh… These programs contribute for Dongthanh Embroideries going to the foreign consumers 2.5.2.5 Financial and Accounting: The financial capacity of Dong Thanh Company is rather positive, this is a strong point of company; because it has rather close relation with the Banks and partners, it is able to mobilize the capital quite fast On the other hand, its payment methods applying for its partner mainly is Irrevocable L/C so it is possible to avoid the financial risks To the end of 2008, its financial targets are displayed in Table 2.11: 59 Table 2.11: Some of financial targets Targets 2005 2006 2007 2008 The capacity of discharging the shortterm liabilities (times) The capcity of liquidation (times) Net profit-to-sales ratio (%) Net profit-to-owner capital ratio (%) Net profit-to-total asset ration (%) 2,05 2,15 2,18 2,55 2,4 3,64 4,21 1,05 2,56 4,16 5,32 1,15 2,51 5,03 5,14 1,20 2,54 6,5 4,25 (Source: Summary of Financial Report of Dong Thanh Import Export Ltd., Co.) It can realize that the financial situation of Dong Thanh is quite positive; the indexes of liquidation are all higher than the allowing safety ratio We realize that the ratio of dicharging the short-term liabilities guarantees the safety margin is twice and the safety margin of fast liquidation ratio are once Besides, the net profitto-total asset ratio and the net profit-to-owner capital ratio both increase through the years; especially the net profit-to-total asset ratio is from 4.21% to 4.25% while the net profit-to-owner capital ratio is from 3.64% t0 6.5% This shows the company has used the borrowing capital effectively so it got the net profit-to-owner capital ratio to be higher than the net profit-to-total asset ratio 2.5.2.6 Research and development The research and development are specially paid attention by the company The research and development division specializes in researching the market and designing the products to meet the customers’ demands even though the customers are the most fastidious Hence, the company can make the products with the domination characteristics and lower production cost Using the SWOT matrix to give out the strategic choice (methods) of Dong Thanh Company as follow: Strengths: - The products of Dong Thanh Company have the high quality, diversified kinds and reliability in the international market - The capacity of mass production, it is able to meet when the market demand increases - The trademark Dongthanh Embroideries rather reputes with the customers - The young, active, qualified and well-trained employees - The strong marketing strategy, much potential of development - The good distribution channels help to deliver the product to the end customers; the strong consumption consultancy - The market share is rather large in comparison with its competitors - The stable finance Weaknesses: 60 The exploitation of production capacity of craftsmen and artisans who work part-time and seasonal The price is rather higher than its competitors The lack of the expert of market analysis, information analysis, and business experience The patterns not meet the demand of the lower end market The family management The labors’ qualification is not the same level The supplement activities like marketing, sales, research and development are not systematic and paid the right attention Opportunities The potential consumption market is big, especially the middle end and lower and markets The stable politics and economy with the more and more perfect legislation create the fair competition market to push up the development of company The deep integration with the world and region increases the multilateral cooperation ability, diversifies the activities of company with outside The natural condition and attractive location for transportation; the diversified and productive natural resources The production technology more and more develop, so the domestic materials gradually change the import raw materials Moreover, the Vietnamese technology of printing, packaging and packaging materials develop and the appearance and development of the domestic professional marketing companies allow to low the the production and marketing cost for the enterprises Threats: The weak infrastructure causes the difficulties for the material transportation as well as the production consumption The strong competition of the foreign competitors, especially the Chineses companies with the low price strategy Vietnam has a hot economy with the high growth so the inflation increases and the fuel price (price of oil, electricity…) changes that increase the cost of the input material The customers’ demand causes more and more difficulties for the company and is one of the reason for rasing the cost of company The change of Government’s legal corridor about the tax, labor, and the long-term socio-economic development policy (The socio-economic development plan of Vietnam in the period of 2010-2020) Table 2.12 SWOT analysis 61 SWOT Strengths Weaknesses Combination of S-O Target: To built Dongthanh Embroideries to become a strong trademark by the product and service quality, to meet the demand of all of the customers’s demands General strategy: To diversify the products Functional strategy: To make Opportunities use of the State’s financial support and the priority support policy of investment for the small and medium size enterprises Strengthen human resource (material base, finance, organization structure, human beings, research and development) Threats Combination of S-T Keeping the position in the market, strengthening the competition advantage, closely relating with the different authorities and the important partners Organizing the vertical join venture in the production and business and supplying the products and service to the customers Planning the good business methods to attract effectively the resources (capital borrowing from the banks, calling for capital contribution from the partners Setting up the stable customer system against the market changes 62 Combination of W-O Market entry and development strategy: To keep the existing markets and to expand the new markets by building the professional marketing system Functional strategy: To built a flexible, independent business model, to develop the human resource, improve the management knowledge for managers To improve the qualifications especially develop the high-qualified labor Well organizing the management and internal information system is to improve the production and business effectiveness Combination of W-T Maximun concentrating the resource into the key products, which bring back many benefits like the art embroidery paintings, high quality bed cloths The general management strategy: restructing the company, constructing and restrengthening the system, constructing the enterprise culture Increasing the activity effectiveness by filtering staffs, training, recruiting news, constructing the modern management model, saving the cost Setting up the database and necessary information of customers 2.6 Mission and Vision: - To develop Dong Thanh Company to become a Vietnamese leading company in producing and exporting the embroidery products For the target of stable growth, the comitment of well finishing the social responsibility of is the guideline for the activity of company - Human being is the priceless asset, the wholly strength of Dong Thanh Company Strengthening and developing the human resource, solidarity, combination in work, discipline, and industrial style are the basic values, the traditional culture of Dong Thanh to achieve the company’s success - The customer is the central and the good service, production quality, the time of delivery meeting the customers’ demand are the first priority - The profit is a vital requirement for the existence and growth of Dong Thanh 2.7 Analysus the strategy targets: Financial and profit targets: The clear finance, the low debt-to-capital ratio, increasing cash reserver and liquidation ability Implimentating the modern accouting management softwares are to build an effective and united financial management process Establishing the proper financial models is to attract and effectively control the capital to serve the production and business of company In the period of 2010-2015, the company tries to reach the average profit ratio of 15%/year and average personal income of 10%/year The company tries to reach the average personal income of 3.500.000 VND/person/month by 2010 Competitive position of the company: To make up the competitive position of Dong Thanh in the market, the company should direct to the four objectives, namely: efficiency, quality, improvement and customer response Currently, the price is no longer a major competitive factor The main objectives that the company towards are the quality and the increasing value of product Through making up the policy of supporting products (the enclose products and services) to give customers confidence in its products and services This service is easy to do, low-cost, very consistent with internal capacity of the company To promote the research and development: Like most of Vietnamese companies started in a changing economy, the technology, research and development are the drawbacks of Dong Thanh Company The company’s orientation of period 2010-2015 is striving to make breakthroughs in the product design, the harmonious combination of traditional elements and modern style of each export product Therefore, the research and development should be taken care properly to be the significant basis of cost-reductions, a powerful competition weapon The company has the ability to use abundant human resource, cheap unit price and apply advanced management methods or establish reliable supplying channels of materials to reduce costs, lower product price 63 To develope the human resources: Human resource is one of the factors that determine the quality of work and the efficiency of production and business activities For Dong Thanh Company, keeping good employees, training, coaching staff to improve the competitiveness of enterprises is the goal This goal is accomplished through the building employment regulations, salary structure, reasonable emulation and reward, which makes the employees to feel secure in working, and promoting all of their capacity and lifts the company to a new height Building brand and social responsibility: Dong Thanh Company will continue to build brand name "DongThanh embroideries" in the existing markets and develop new markets In addition, the company committed to give prominence to social responsibility by improving the living quality of employees and their family members, communities and society in the ways to benefit both businesses and the general development of society; Compliance with the standards of environmental protection, gender equality, labor safety, labor rights, fair payments, training and developing employees, community development 2.8 Evaluation of strategy choices: In order to implement effectively a strategy, Dong Thanh Company needs to build detail actions, more importantly to arrange the employees to maximize bring into play their capacity In the current time, its production and business are considered relatively stable and to develop sustainably Initially it can evaluate that the selected strategies are correct and indispensable in the market economy However, the effectiveness has not met the expectations of the management board There are many reasons hindering the strategy from implementing The biggest reason is the constantly changing business environment, leading to some of strategy contents not to be no longer appropriate but the adjustment cannot be made in some days Therefore, keeping the right strategic direction is not easily done Thus, the selected strategies in the SWOT analysis should provide more flexibility On the other hand, it must be identified basing on detail evaluation the resources and position of Dong Thanh Company in the market as well as the longterm objectives in the future Considering its objectives and capability are futureonly forecasts, which are more incorrect for long term, so the management board needs to take precautions easily and more actively against changing to complemement strategy Clearly, the strategic solutions must be set out more synchronously (retraining, education, training and developing the human resource, investmenting the research and development ) and must be provided basing on the production business plans The company must have the backup solutions and consider itself carefully the company’s resources Therefore, the strategic plan will be implemented synchronously, unitedly, and gradually brings practical benefits in all production and business activities of Dong Thanh Company The above conclusions are the ground for building the development strategies of Dong Thanh Company in the next chapter 64 CHAPTER III: DETERMINE STRATEGIC PLANNING BUSINESS OF ĐÔNG THÀNH HANDICRAFTS IMPORT AND EXPORT Co.Ltd TO THE YEAR 2015 3.1 Building the development objectives of Dong Thanh Company to the year 2015 3.1.1 The development strategy -oriented points of Dong Thanh Company Based on analyzing of operational environment of the company in Chapter II, identifying its opportunities, risks, development strengths, and weaknesses, deriving from the characteristics of the traditional handicraft industry, and forecasting the consumption demand in the future, it may realize its trend of growth to the year 2015 being shown in the following main points: - Develop the company basing on the specific situation of the branch and the actual situation of the ecompany - Continuing the business and strong products to provide the perfect products to the market; Holding on the traditional markets and developing new markets -The strong point of Dong Thanh Company is currently its products being highly appreciated by the consumers on quality, service and its social responsibility - The trend of product development using the domestic raw materials, import restrictions, increasing the localization rate will help the company to save the production costs, to have the more competitive price and to be more active in production and consumption 3.1.2 Building the development oriented objectives of Dong Thanh Company to the year 2015 3.1.2.1 Analysing the implementation of several key indicators in the past time Table 3.1: The average growth of embroidery branch Indicators 2005 The average growth % 2006 16,5 15 2007 15.5 2008 17 2005 2008 16 (Source: Summary report of Vietnam embroidery Association) Table 3.2: The export turnover of Dong Thanh Company Quota Unit 2005 Production: Export turnover: 2006 2007 2008 months of 2009 Set/ piece 16.000 17.500 21.200 20.540 14.300 Thousand 4.100 4.830 6.006 5.190 2.346 of USD (Source: The internal data of Dong Thanh Handicarft Import and Export Ltd., Company) 65 Table 3.1 shows the average growth rate of the whole industry of 16% per year According to the Vietnamese Association of Crafts, this number could increase to 18-20% from 2010 to 2015 Through Table 3.2, we realize that: - The target of the production rate increases, except 2008 due to the impact of the global financial crisis For Dong Thanh Company, the production status also tends to increase over the years Thus, compared to the growth rate of the targets of production rate, the company had the growth rate equal to the growth of the industry - Export Quota: This is an indicator reflecting the level of production and product consumption of the company, because 100% of the product is exported 3.1.2.2 The oriented development of fine art embroidery to the year 2010 - Continuously improving the product quality, diversifing the design of each product, creating the reputation in the key markets, improving the competitiveness in manufacturing the high-grade articles - Actively implementing the new technologies in product design, strict products quality checking in accordance with standard registration - Being able to compete with the same products of China, the companies need to cut the production costs, the management costs, the circulation costs, the investment costs, the unreasonable expenses to reduce the price, step by step to be equivalent its the price to the market price, while increasing the product quality - Actively building the market strategies with the specific and firm goals, steps, and itinerary; pushing up to export its products - Paying attention to train the economic management, staff, skillful technical workers, qualified professionals to catch the information, science and technology, to hold the advance technology, and to create the new models With the above development orientation, the art embroidery branch strives gradually to meet the following objectives to the year 2015: - The average growth rate of the industry is 18% - 20% - Reducing the production costs, gradually being equivalent its price to the price of Chinese products to the year 2012 - Regarding the products quality, there is the separate require for each products to have enough competiveness on the world market 3.1.2.3 Building the development oriented objectives of Dong Thanh Company to the year 2015 The bases of building the development-oriented objectives of the company to the year 2015 are as follow: - The average growth rate of the general targets of the industry and the analyzing data in 3.1.2.1 - The combination of solutions to implement the strategic targets will be presented in 3.2 66 Hence, it is necessary to identify some key targets of Dong Thanh as follow: Table 3.3: Ex ante the production and business results of Dong Thanh Company in the period of 2010-2015 No Targets Total value of the production and business I Growth rate Total revenue Growth rate Export sales II Other revenue III Profit Gross Net Others IV V Unit Year 2010 2011 2012 2013 2014 2015 160.000 182.400 209.760 241.224 277.407,6 332.889,12 15 15 15 20 24 142.500 163.875 15 15 Million VND % 14 Million VND 125.000 % 14 Million VND 112.500 Million VND 12.500 Million 12.890 VND Million 9.667,5 VND Million 510 VND Million 7.500 VND Paying in Budget Labor Total of People labors Average Million imcome/ VND month 188.456,25 216.724,69 15 20 260.669,63 24 131.100 144.042,5 162.072,38 184.215,99 224.175,88 11.400 19.832,5 26.383,87 32.508,7 36.493,75 21.375 26.220 32.037.56 39.010,44 49.527,23 16.031,25 19.665 24.028,17 29.284,83 37.145,42 540 620 640 880 1.200 9.170 10.126 11.274 12.021 13.470 725 760 810 830 840 855 1,8 2,1 2,2 2,35 2,4 2,5 - This is the period of the extension of products, improving production capacity to meet the market demand - Confirm the leading position of fine arts embroidery products - Reducing the cost, lower price but guarantee the inherent quality of Dongthanh: The market of embroidery products has a few of barniers, it bases on traditional products The traditional embroderies products of company are 100% handmade by craftsman with the sophisticated outlines, special style which make the difference to others products The customers believes in the products of 67 company In order to maintain and develop the customers confidence, ensuring the qualify of company’s products keeps a very important role - Improving the organizational structure and the way of company management: By the table 3.3, the force labourer increase but not many and the ratio of wage – fund/ income is very little because the company rents, uses the well – trained labouners At the village, to decrease the expenditure of the company Each embroidery craft pass different operations: preparing raw materials, design, mix colours, embroide, wash and ion, check and package These operation require the different level At the operation requires the genaral labourers, the company rents them to decrease the expenditure The labourers of the company takes up the operation requiring the high craft - Diversifying the products, meeting the increasing demand of the consumers - Continueing to promote the export activities in order to expand the markets and well resolve the redundant situation - Continueing the deep investment, actively researching and implementing the advanced technology to reduce the material, fuel and electricity consumption to reduce production costs 3.2 Buiding the strategy of Dong Thanh Company to the year 2015 Based on the analysis of environmental factors affecting the operation of Dong Thanh Company and identifying the opportunities, threats, strengths, weaknesses made in chapter II, we conduct reviews of the effects of individual environmental factors to the operation of the company to find solutions to exploit or limit the impact of the environment 3.2.1 Methods of strategy of Dong Thanh Company: 3.2.1.1 The general strategy: Dong Thanh Company implemented the development strategy by: diversifying the products, expanding the production scale Maximizing the profits, improving the efficiency of capital, and using the employers are to achieve the target of continuous value of the company Basing on the SWOT analysis model in Chapter II, we can summarize: - To maintain the position in the market, rapidly expand of the company's scale, diversify the products, concentrate on the development of competitive advantage, expand the strategic relationships with the partners, maintain and promote the relationships with government at all levels - Develop network consumption – the firm customers against the fluctuations of the market Organize to joint venture in the vertical production and business processes and supply the products and services to customers 68 3.2.1.2 Overall management strategy: Overall management is aware of the effective organizational structure to build the stability for the company to successfully implement the strategies and maintain the existing competitive advantage, and develop the sustainable competitive advantage in the future Therefore, the leaders of companies are interested in: - Review and restructure vertically the company's compact apparatus, the Subsidiaries, improve the operation capacity and the management capacity of the division, board in the horizontal, successful classify and decentralize between the senior leaders and the subordinate, between the leaders and the employees - Implement the recruitment process, the employee training process in accordance with the quality management system ISO 9001:2000 - Develop and improve the regulation, management regulations for conformity with the actual situation of production and business of the company in order to comply the charter and operation of the company The system of internal control process of strategic planning and saving the management cost, ensure business safely and high efficiently However, with the changes of the market economy, the strategic plans of Dong Thanh Company are no longer relevant and must be changed to adapt to the new conditions The organizational structure of the company must also be adjusted, the key problem of Dong Thanh Managers is when it does make the changes, how its scale apparatus is to rhythmic activate, not disturbe 3.2.2 A number of strategic methods of basic functions to implement successfully the business strategies: 3.2.2.1 Marketing - Mix: a Strategy for product: Strategy for product is the base of strategy of business When the company takes shape the strategy of product, it will invest, reseach the real production If the planning of product hasn’t the reliable market, orienting business is very risk When the company realize the policy of product, policy of price, distribution, communication and extention, it can succeed The policy of product vouches for realize objects of the strategy for production and business Distributing of strategy for product: - Basing on strategic market: + Strategy for class + Strategy for renovating products - Basing on products and market: + Available products + Available new products improved + Available new products 69 + New products b Strategy of setting prices on products Nowadays, the Dong Thanh products are quite high price The company can set different prices on different products - With high quality and prestigious products whichs others companies can not make, are served booming income customers, the company has to set a higher price than costs of production - With the medium quality products (served median income customers and others companies can make them, they are set the same price with the same product on the market c Strategy for distributing products In order to lift result of distributing products, the company has to do: - Reseaching and collecting customers’ need, rearranging the area of sale market, forecasting the exact amount of products consummed in each period in the future - Surveying the deferred payment customers, the agent about finance capacity, ability to pay, to organize, professional skill of personnel Apply the methode of commending and rewarding or enforcing in the necessary case - Analysing the distributing system and customers support methodes of competitors to respond to them - Collecting imformations about export market through the government agency, import – export company, commercial services ti find opportunities d Strategy of promotion sale: - To improve the prestige of the company's brand by advertising and promoting on the mass media - To continue improving the competitiveness of the company through its objectives: improving the product quality, technology, investment really to improve its stature to become a strong company - To understand the needs of clients and customers: uncontinuously to improve the information collection and processing all information relating to the customers, financial capacity and competitiveness in the market, the demand and the changing trends in the future - Business on the Internet, building the websites and promoting the products and services on the company's Website; to receive the orders and contracts by the electronic commerce To establish a forum of patterns, design, the difference of its products with the same kind of products - To expand the new markets, the new market shares in the traditional markets, in foreign countries 70 3.2.2.2 Finance: - To strengthen the financial accounting organizational system from the company to the member units; to perfect the management regulations to perform the transperant accounting and financial works, to ensure the initiative for the member units - To perfect the management regulations and transperant organizational targets to ensure to use effectively the capital and conservation capital of the company - To use multiple methods for raising the capital: domestic capital and foreign capital Raising the domestic capital is mainly, loans from banks, raising capital of the joint venture with the strategic partners - To manage and organize closely to improve the efficient utilization of capital, to manage and utilize the available land assets, resources - To maintain and always ensure the liquidation of the company, to build up the reputation of the company with the customers, the financial, credit institutions, and bank - Step by step to implement the financial restructuring of the company, to improve the owners’ capital, to reduce the financial risks, improve the efficiency of the owners’ capital - To increase the yearly revenues and profits of the company, to ensure the maximum benefit, and to complete the obligations to the State 3.2.2.3 Human resource: - Standardizing the employees, implementing the regulations to assign the officials to hold managerial posts in the term, and give the settlement regimes for the employees being incapable to complete their tasks - Diversifying the training methods, new training and self-training; organizing to recruit the qualified and capable young workers with the high responsibility for training the nearby forces, often organizing the training, and improving the professional skills for workers - Develop salary and incentive mechanisms to be in accordance with the characteristic of the company to avoid the egalitarianism Gradually to improve the workers’ income, create the company culture to avoid the unnecessary disturbance - To have more positive measures to recruit and retain the skillful workers as the core and the highly qualified professional staff, to build the staff, high-qualified workers to become fond of the company (signed the unidentified time contract, to ensure benefits for the employees) 3.2.2.4 Production: - To invest into the production development towards diversifying the profession, and to further exploit the strength of traditional embroidery 71 - To try to build a synchronous production process in accordance with ISO 9001:2000, with the motto of quality and labor safety are on the top 3.2.2.5 Research and Development: Focusing on investing into the product perfect and design is to serve the growing needs of the customers 3.3 Proposals for successful stratefies implementation: The strategic objectives must be highly flexible, effective, details and fit to the over the framework of time More importantly, the human must be put in the right place, leader and all staff must be united and pleased to perform In addition, the control over implementation of the strategy is very important; it is the basis to keep the strategic plan on track Dong Thanh LTD., Co leaders made some proposals to implement strategies selected: - Determinated to act without changing wills, on the one, leaders expand that feeling for all staff by their prestige - Coordinate in action, any plan, all functions are closely related together to achieve the target Do not let the situation of unbalance in terms of HR and technology within the financial capacity of the company - Concentrate all resources, being economical and combat waste - Promoting traditional availability, continuous development of the brand name "Dongthanh embroideries, support creative activities, design and product development to create its own designs, the products separately That is a basis for Dong Thanh Import & Export Co., become a big business - Develop and improve the system of regulations, statutes, charter organization and operation of the company Regularly updating to capture information and monitor closely the changes of the environment macro, micro, regulations, legal framework of the sector and Government Due to those timely adjustments, we can adapt to the new situation - Continuously improving the professional ability, ethics of employees, have good policy to keep and attract top talent - During the implementation of the strategy 2010-2015, it is ikely to encounter many difficulties from the environment, the regional economic integration and globalization, resulting in increasingly fierce competition This makes the implementation of the original objectives of the Dong Thanh did not achieve the requirements set out Thus, the action plan should not be too rigid, convenient adjustments when necessary to adapt the business environment is necessary Adjustment strategy in the future is objective and necessary - To perfect the system of inspection and supervision in accordance with ISO 9001:2000 to ensure effective inspection and supervision of room, board functions to avoid overlapping Strengthen inspection and supervision but does not interfere with production and business operations of the company, take precautions as the main 72 CONCLUSION In the economic integration today, the business environment have changed, the market competition becomes increasingly fierce so businesses want to succeed for a long term have specific effective business strategies Business strategy to bring about practical benefits for businesses are: to help companies find clear directions and when to achieve these goals; help administrators always keep an active facing with changes in environment, helps administrators clearly sees opportunities and risks occurring in the current business to analyze, evaluate, forecast conditions in the future So its purporse is to help businesses take advantage of the opportunities, risks reduction in order to win in competition, become the winner; help enterprises to exploit and use up resources, their potential; help enterprises distributed resources in their areas, at reasonable time; help increase business links, the union of the staff to create internal strength This shows that the production strategy development is a significant factor for the operations of a company If the strategy is built properly in accordance with the company's internal resources and adapt to the effects of high external forces outside the company, the company will have a "guiding" book in economic production activities In the context of developing at present, all technical issues experience certain changes Therefore, if the company is building long-term development strategy based on its elements, the focus of sustainable companies will take advantage of opportunities and limit the threats and challenges Based on content analysis of the development strategy of the company, we hope that the Dong Thanh Embodery Import and Export Company will have longterm development strategies, thereby; helping the company outlines the development orientation for each period, to maintain the company reputation, market share and will be reaching out to new markets in the future The solutions should be carried out parallelly and synchronizedly to create the overall strategy, linking together with scientific and rational factors Simultaneously, in the implementation process, the company must evaluate the results of objectives, take adjustments in time, and provide good service for production and business operations of the company Due to the time limit as well as theoretical knowledge and practical experience, this capstone project can avoid shortcomings; we look forward to receiving the comments of the teachers and all people Finally, I would like to express my deep thanks to professor in the preparation of the teaching and application tool as well as technical guidance which has benefited to our capstone project completion Our deep appreciation to the Board of Management in Dong Thanh LTD., Co for giving us precious advices 73 [...]... picture created by different styles and life styles Although two people can not have same style or life style, in general tylical styles and life styles also exist in anywhere at any time Each style and life style has its own feature under the way each individual thinks, acts and shows outside In turn, this strongly controls formation of demands for types, quality, quantity, appearance, designs and so... and services which are typical for those styles and life styles Thus, managers have to adjust their activities under respiration and life style, under style and life style of the current society and future society for efficient business + Marriage and family conditions: Marriage and family in life of each person have extremely locations and roles Each family is a cell of the society, which mentions tight... other target and penetrate deep into new markets Must determine priority item clearly This demonstrates the rank of the system goals Priority should be given too much targets and there are also additional priority Guarantee about is, effectiveness of priority is just presented Companies must always balance the reality and difficulty An easy goal is not a dynamic factor Also, a non-fact will make businesses... and consume or store + Divide according to capacity in meeting the demand of customers: The division is based on the capacity and resources of the company to meet the needs of the market Distribution policy is also related to factors II, which is the ability of the company Seconly, based on the ability of the company: Company needs to rely on their ability to plan business strategy because from the 80s... charity and justice, enthisuatism and so on are always mental factors on national schychology They have big influences not only on thinking way and actions of each administrator as well as each person administrated but also on consumption style, formation of different market segments and all of them force administrators to consider their business decisions + Style and life style conditions: Society is... promotion, location of brand name, functional design and products quality This type of competitition is make efforts to creat differences for companies of the company compared to competitors , thus forming loyality of brand name and minimizing occurence of a price war However, validity of this strategy depends on whether possibility to cause differences of product in the industry is easy or not Demand... use this capacity as a tool for sale off 1.3.2.3 Analyze pressure of supplier Third force among model of five Porters forces is negotitation capacity of suppliers The suppliers can be considered a threat when they can foster to raise price or decrease profitability of the company On the contrary, if supplier is weak, this brings an opportunity to force sale off and requires high quality to the company... into 4 types as follows: (1) Strategies that focus on key factors: (2) Strategy that creates relative advantage: (3) Innovative strategies to attack: (4) Strategies to exploit customerspotential capacibility c Based on marketing activities, there are four types of part strategies (1) Product strategy: Business has to pay attention to improve typical features of their products such as durability, lifespan,... equipment, adjust production conveyor and arrange transportation system - Decide about mobilizing production capacity sich as confirm output rrate and operation capacity of machine and equipment, arrange production shift 28 - Decide about quality of product such as SPEC that need checking and quality 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