Luận văn thạc sĩ Xây dựng chiến lược kinh doanh công ty cổ phần xi măng Thăng Long MAKE THE BUSINESS STRATEGY FOR THE PERIOD OF 2011- 2015 OF THANG LONG CEMENT JOINT STOCK COMPANY CONTENTS Page Acknowledgment…………………………………………………………………1 Contents…………………………………………………….…………………… List of tables………………………………………………………………………5 List of figures/ diagrams………………………………………………………….6 OVERVIEW………………………………………………………………………7 CHAPTER 1: ARGUMENT ……………………………… ………… 1.1 Argument about business strategy for the enterprise ………………… 1.1.1 Some definitions about strategy ………………………………….………8 1.1.2 Nature of the business strategy………………………………… ……… 1.1.3 Characteristics of business strategy ………………………… …………10 1.2 Process of making strategy……………………………………………… 10 1.3 Model – analysis of the external environment ……………………………11 1.3.1 Model – macroscopic analysis (PESTLE model)………… ………….11 1.3.2 Model of forces of Michael – sector analyis ………… …………….12 1.4 Model of internal analysis of the enterprise…………………… ……….13 1.4.1 Value chain……………………………………… … ……………… 13 1.4.2 Internal Factor Matrix- IFE……………………… … …………………….13 1.4.3 External Factor Matrix- EFE…………………….…………………………14 1.4.4 Total IFE point…………………………………………………………………14 1.4.5 Matrix of strategic space of the enterprise …………………………………14 1.4.6 Sustainable competitiveness advantage of the enterprise …………….14 1.5 Model of general analysis (SWOT)………………………….………… 14 1.6 General competitiveness strategies…………………………… ……….15 1.6.1 Cost Leadership strategy ……………………………………………15 1.6.2 Differentiation Strategy ………………………………………… …15 1.6.3 Focus strategies ………………………………………… ………….15 1.7 Model of analyzing and selecting strategy under weight method……… 16 CHAPTER 2: ANALYSIS OF REAL SITUATION OF THANG LONG CEMENT JOINT STOCK COMPANY …………………………………….18 2.1 Overview of Thang Long Cement Joint Stock Company …………… 18 2.1.1 Process of establishment and development………………………………… 18 2.1.2 The fields of business production activities of the company………………18 2.1.3 The structure of management machine of the company……………………19 2.1.4 Results of business production in 2008 – 2010: …………………………….19 2.2 Analysis of external environment of Thang Long Cement Joint Stock Company ………………………………………………………….…… …… 22 2.2.1 Analysis of macroscopic environment (PESTLE model)………………… 22 2.2.2 Analysis of the environment of cement sector (model of forces): ………23 2.3 Analysis of the internal environment of Thang Long Cement Joint Stock Company ………………………………………………………………….… 29 2.3.1 Model of value chain……………………………………………………………29 2.3.2 Internal Factor Matrix- IFE of Thang Long Cement Joint Stock Company 33 2.3.3 External Factor Matrix- EFE of Thang Long Cement Joint Stock Company 34 2.3.4 Total IFE point of Thang Long Cement Joint Stock Company ………….…35 2.3.5 IE Matric…………………………………………………………………………….35 2.3.6 Matrix of strategic space of Thang Long Cement Joint Stock Company ….36 2.3.7 Sustainable competitiveness advantage ………………………………… 37 2.4 Total SWOT matrix of Thang Long Cement Joint Stock Company ….40 2.5 Limitations, existing reasons in Business strategy ……………………… 41 2.5.1 Limitations………………………………………………………………………….41 2.5.2 Reasons………………………………………………………………………………42 CHAPTER 3: SOLUTIONS, SUGGESTIONS AND CONCLUSION…… 43 3.1 Business strategy of the company in the period of 2011 – 2015 ………….43 3.1.1 Vision……………………………………………………………………………… 43 3.1.2 Mission…………………………………………………………………………… 43 3.1.3 Targets for the period of 2011 – 2015 ………………………………………… 43 3.1.4 Selection of business strategy for Thang Long Cement Joint Stock Company for the period of 2011 – 2015 …………………………………………………… ……44 3.2 Some solutions to implement successfully the selected strategy … …… 52 3.2.1 Change of the financial management method of the company ……….………52 3.2.2 Re-developing the Marketing activity, in which respecting the system of distribution channel; activity of customer services…………………………… …….54 3.2.3 Establishing the Research and Development Department……………………57 3.2.4 Applying the operation method of the Factory under international regulation for a modern cement factory…………………………………………………………….57 3.2.5 Development of human resource ……………………………………… ………58 3.3 Roadmap of implementation of business strategy of Thang Long Cement Joint Stock Company in the period of 2011- 2015 ………………………… 59 3.4 Supervision of implementation of business strategy in the period of 20112015 …………………………………………………………………… ………59 CONCLUSION………………………………………………………… …….61 REFERENCE………………………………………………………….…………62 LIST OF TABLES Page TABLE 2-1: Business achievements in the period of 2008- 2010…………….… 19 TABLE 2-2: Summation table of the internal factors of Thang Long Cement in comparison with competitors ……………………………………………… ……33 TABLE 2-3: Summation table of the external factors of Thang Long Cement in comparison with competitors ……………………………………………….…… 34 TABLE 2-4: Summation table of the internal - external factors of Thang Long Cement in comparison with competitors ……………………………….…………35 TABLE 2-5: IE Matric…………………………………………………………… 35 TABLE 2-6: Summation table of formation factors of SPACE matrix of Thang Long Cement ………………………………………………………….………… 36 TABLE 2-7 Total competitiveness image of Thang Long Cement Joint Stock Company ……………………………………………………………….………….40 TABLE 3-1: Targets of Thang Long Cement …………………………………… 43 TABLE 3-2 SWOT matrix of Thang Long Cement Joint Stock Company ….…….44 TABLE 3- Select suitable strategy under weight method ……………………….50 TABLE 3-4: Summation table of strategy selection ………………………………51 Table 3-5: Summation table of cost and labor productivity in year 2010……… 51 TABLE 3-6: Roadmap of increasing the chartered capital……………………….53 TABLE 3-7: Level of support for sales in rainy season……………………….… 56 LIST OF FIGURES/ DIAGRAMS Page Figure 1-1 Model of the process of strategic management………………… ……11 Figure 1-2 Diagram of structure of sector competitiveness ………………………12 Figure 2-1: Diagram of organization………………………………………………19 Figure 2-2: Revenue structure of Thang Long Cement under products …… ……20 Figure 2-3: Market structure of Thang Long Cement in Vietnam…………………21 Figure 2-4: Market share of Thang Long Cement in the period of 2008 – 2010… 21 Figure 2-5: Situation of cement consumption in the period of 2008 – 2010 and the forecast for 2015 ………………………………………………………….………24 Figure 2-6: Process of cement production……………………………… ……….30 Figure 2- Value chain relating to the operation of Thang Long Cement Joint Stock Company ……………………………………………………………….…………32 Figure 2- 8g: SPACE matrix of Thang Long Cement ……………………………37 OVERVIEW Vietnam’s economy has had the growth of 6,78% in 2010 and forecasted to continue the higher growth in coming years; and the construction sector will have the growth level twice in comparison with that of GDP However, it is different when considering in each sector, the demand for construction materials is increased, but according to the forecast of Ministry of Construction, from 2011, the supply of cement could be redundant over 10 million tons and higher than in next years when many factories will come into operation Thang Long Cement Joint Stock Company was established in 2001, passed by the construction process, in 2008, the factory came into operation For the challenges of the cement redundancy as the forecast, making a long-term business strategy is the most important Therefore, our group selects the topic “Developing the business strategy for the period of 2011 – 2015 of Thang Long Cement Joint Stock Company” Research purpose is to make the suitable business strategy for Thang Long cement so that the Company could have the sustainable development With building a comprehensive and feasible strategy, it will be submitted for General Assembly of the Shareholders which will have the meeting held dated April st 2011 for the approval Implementation method: approach the learned theories about strategic management; survey to collect the data in Thang Long Cement Joint Stock Company and gather, summarize the data from State management bodies, websites… Structure of the Assignment includes 03 chapters: Chapter – Argument foundation; Chapter – Analysis of real situation of Thang Long Cement Joint Stock Company; Chapter – Solutions, suggestions and conclusion Because of the limited time, collection and analysis of the data are restricted Writers’ group would like to receive the contribution opinions of the teachers, students and the people who are interested in the cement sector so that the topic will be better CHAPTER 1: ARGUMENT FOUNDATION 1.1 Argument of business strategy for the enterprise 1.1.1 Some definitions about the strategy According to normal definition, strategy is a military term used to show the plan of disposing the troops in battle formation and distribution of the force with the target of winning the enemy or reaching its military target Carl von Clausewitz – the artist of the war of the 19th century – described the strategy as “making the plan of war and making the operation campaigns Those campaigns will decide the participation of each individual” Historian Edward Mead Earle described the strategy as “the art of supervision and using the resource of a country or an alliance of the countries, aiming at ensuring and increasing the effectiveness for its essential rights” Nowadyas, definition of strategy is used popularly and considered as the foundation for the operation of the business enterprise There are many definitions of the strategy such as Strategy is the model of targets, destinations and plans to reach those targets (Kenneth, 1965 Strategy is the plan of controlling and using the resource of the organization like as human resource, assets, finance aiming at improving and ensuring its essential rights Kenneth Andrews is the 1st person to make the outstanding ideas in the classic book The Concept of Corporrate Strategy According to him, strategy is what an organization must implement basing on its strengths and weaknesses in the context including the opportunities and even threats 1.1.2 Nature of business strategy - Business strategy of the enterprise is the business method of the enterprise, in terms of Business strategy, it is the operation rule of the enterprise; method of using the resources; foundation to solve every problem of the enterprise - Business strategy is the expression of the concept of the enterprise’s value, improvement spirit, strong willing of the enterprise’s leader, reflecting evaluation of the leader about the objective situation, subjective condition of the enterprise 1.1.3 Characteristics of business strategy Comprehensiveness: Comprehensiveness of Business strategy requires considering all parts of the enterprise, analyzing the situation of the whole enterprise, the situation of the whole country and of the world Visionariness: A success strategy often is a strategy basing on exact forecast Competitiveness: Business strategy must research on how the enterprise has the competitiveness advantage rather than the competitors and thus reaching the victory in the competition Threats: Threats of Business strategy require the enterprise to stand highly, be visionary, and observe carefully, objectively to have the right strategy Professionalism and creativity: Suitable specialization and technical creativity are the important methods to ensure the existence and development of the enterprise That is also the important characteristic in Business strategy of the small and medium enterprise Relative stability: Business strategy of the enterprise must have relative stability in a certain period 1.2 Process of making the strategy In order to make the strategy, it requires having strategic thinking and answering 03 questions “Now where are we? Where we need to go to? And how we come there?” through steps Current evaluation: Mission, targets, strategies Analysis of business environment: Market structure, development situation, analysis of competition and position of the enterprise Analysis of macroscopic environment: environment of demography, economy, society, technology and politics Internal analysis of the enterprise: structure, resources, process, human resource and enterprise culture Analyze strengths, weaknesses, opportunities and challenges (SWOT) Analyze and select the strategy: share or according to the sector 10 scale, with above design capacity when operating from 80 – 90%; the price has lowered by 20% This is the advantage which is possible to compete with the enterprises with similar cement production capacity to Thang Long Cement Strategy SO2: with modern production technology, the quality is evaluated equally to the old trademarks (Differentiation Strategy) Together with exploitation of the strength of the technology of Thang Long Cement, the factory’s process is operated comprehensively, creating the products with the relevant quality to the old trademarks of cement sector such as Hoang Thach, Bim Son, Nghi Son In order to have such quality, they took at least years to operate the factory, while Thang Long Cement only needs 1, years to implement this When the product of Thang Long cement starts to penetrate into the market with competitive price, it attracted a lot of customers and started to define the position of its trademark Strategy ST4: Distinction of products, low price and flexible management mechanism when deciding the sales price (Focus strategies) With the advantage of affirming the trademark of the quality, lowered price of the products while the cement market is forecasted to have the strong competition among the big factories with each other, even between small factories and big ones Then Thang Long Cement will focus the competition on the price because the flexible mechanism decides the sales price In comparison with other cement production enterprises, decision of sales price must be through a lot of levels, but in Thang Long Cement, decision of sales price is decided in Board of General Director even though the cement price in the market now is still controlled and regulated by the State 3.1.5 Select the business strategy of Thang Long Cement Joint Stock Company under weight method Because of the limitation of the resource, each enterprise is impossible to pursue at the same time many different strategies Selecting suitable strategy for the company is originated from the bases: collected results from SWOT matrix; 47 Targets, mission of the Company by 2015, specific characteristic of the construction and cement production sector, and collected opinions from the specialists in the sector Made strategies for selection: Strategy 1: Take advantage of opportunities of development of the cement sector, the advantage of near to rich material resource, modern technology, and high productivity to create the cement product with lower price than competitors (cost Leadership strategy ) Strategy 2: With modern production technology, the quality is evaluated equally to the old trademarks (Differentiation) Strategy 3: Distinction of products, low price and flexible management mechanism when deciding the sales price (Focus strategies) Using the weight method to select the suitable strategy as follows: Step 1: Select the criteria for evaluating the strategy Basing on the operation characteristic of Thang Long Cement Joint Stock Company, criteria include: location; Technology; Reached competitive advantage; Finance; Human resource selected to evaluate the strategies Step 2: Attach the weigh with the criteria Basing on the above mentioned analyses about business environment, internal conditions of Thang Long Cement Joint Stock Company, the weight for specific criteria is defined: Criteria Weight Location 30 Technology 15 Reached competitive advantage 18 Finance 17 Human resource 20 Total 100 48 Step 3: Mark the methods under criteria Marking from 0, – 1, 00 under the criteria is implemented basing on: Score ladder: more favorable location – higher score; modern technology – higher score; higher reached competitive advantage – higher score; stronger finance – lower score; and higher quality human resource – higher score Argument foundation: specific characteristic of business activity of the cement production Realistic foundation: combining the interview, survey with realistic experience Contents of survey, interview of made criteria and defining the priority under criteria includes Location; Technology; Reached competitive advantage; Finance; Human resource Survey result shows the opinions recognize that the competition is more and more severe The interviewees think that defining a competitive strategy is very important for the existence of the enterprise and leading strategy of the price, concentrative strategy are the strategies with the highest priority in activity of electric installment Step 4: Defining total score of the methods under criteria Basing on survey result, the experience of writers’ group who have been working in the cement company for many years, total score for the methods is defined particularly as in Table 3-3 below 49 Table 3- Select the suitable strategy under weight method Criteria Weight Cost Leadership Differentiation strategy Strategy Focus strategies Score Total Score Total Score Total Location Technology Reached 30 15 1,0 0,6 30,0 9,0 0,8 1,0 24,0 15,0 0,6 0,6 18,0 9,0 competitive 18 0,9 16,2 0,8 14,4 0,5 9,0 advantage Finance Human 17 1,0 17,0 0,6 10,2 0,8 13,6 20 0,8 16,0 resource Total 100 88,2 Source: Calculation of writers’ group 0,7 14,0 1,0 20,0 - 77,6 - 69,6 The result of analyzing the weigh shows the business strategy is suitable in the condition of Thang Long Cement Joint Stock Company as follows: Strategy 1: Take advantage of opportunities of development of the cement sector, the advantage of near to rich material resource, modern technology, high productivity to create the cement product with lower price than competitors (Cost Leadership strategy) The Company promotes all successful factors such as: professional, modern technology with higher productivity; better management to reduce the waste, the cost; available equipment capacity, decreased depreciation to lower the price comparing with the competitor And increasing the effectiveness of the production, collecting the high profit, the financial capacity; this Strategy needs to be used in the first years to increase the market share of the company in the field of cement production Strategy 2: With modern production technology, the quality is evaluated equally to the old trademarks (Differentiation Strategy) Distinction created by production technology of Thang Long Cement is the product’s quality from Clinker to packed cement, separate cement 50 Strategy 3: Distinction of products, low price and flexible management mechanism when deciding the sales price (Focus strategies) This concentrative strategy is based on Cost leadership and differentiation products because the quality will concentrate to export into the market of Middle East and Africa The lowered price allows Thang Long cement to have the competitive advantage about the price in comparison with foreign cement (including price compensation of the shipment by waterway), the quality reaches the European standards From analysis in Chapter and in Chapter 3, writers’ group summarizes the strategies of the competitors and selection of business strategy for Thang Long cement: Table 3-4: Summation table of selecting strategy Cement Thang Strategy Long Cost Nghi Son But Son Tam Diep Cost leadership Cost leadership Cost leadership leadership Source: Collection of writers’ group Cam Pha Focus Table 3-5: Summation table of cost and labor productivity in year 2010 Cement Cost( Unit: Thang Long 690 Nghi Son 675 But Son 679 Tam Diep 689 Cam Pha 724 3,600 3,800 4,000 3,900 3,200 1.000 VND/ton) Cement ton/ direct labor Source: Collection of writers’ group From table 3-5 shows, the production cost of a ton of Thang Long Cement is 690,000 VND per ton higher than the cement company brand, but gap does not cost much higher than Nghi Son Cement VND 15.000 per ton but less than Cam Pha cement is 34,000 VND per ton On labor productivity is calculated: the number of tons of cement per shows the direct labor Thang Long Cement lower than in Nghi Son, But Son, Tam Diep but higher than Cam Pha The analysis of cost and labor 51 productivity, it is possible to affirm that the Thang Long Cement can select cost leadership strategy With a capacity of 2.3 million tons per year, Thang Long Cement is one of the cement plant of large capacity in Vietnam and is now ranked the Top on the scale Advantages of modern technology, convenient infrastructure, after more than three years of operation by customers appreciate the quality and after sales service and competitive pricing flexibility Therefore, the Thang Long Cement can select low-cost strategy is completely basis Basing on above analysis result, the selected strategy for ThangLong Cement Joint Stock Company in the period of 2011 – 2015: Cost Leadership strategy, Differentiation Strategy and Focus strategies In which, main strategy will be the Cost Leadership strategy to have the competitiveness comparing with the direct competitors such as Hoang Thach Cement, Nghi Son Cement, Cam Pha Cement, Tam Diep Cement, But Son Cement Together with it is combination of Differentiation Strategy and Focus strategies Implementing competitive strategy under the orientation: Market challenger strategies: ranked in Top comparing with the leading enterprises about cement sector in Vietnam About defining the competitive position of the product: higher quality – high price 3.2 Some solutions to implement successfully the selected strategy 3.2.1 Change the financial management of the Company 3.2.1.1 Re-structure the finance of the company Business result was lost in last years mainly because the Company used a lot of financial levers, influenced by interest rate and exchange rate The st method is increasing the chartered capital, aiming at re-structuring the capital, including adding to the working capital into production and payment for the debts Table 3-6: Roadmap of increasing chartered capital Unit: billion VND 52 Year Chartered 2011 2,500 2012 3,300 2013 4,200 2014 5,000 2015 5,500 capital Source: Calculation of writers’ group and Financial Department of the Company Increasing the chartered capital will help Thang Long Cement to take the initiative about the finance, and have the capital resource to pay for the debts from foreign bank when it must pay for high interest rate and continuous change of exchange rate in the international capital market In addition, also calculating for extension of the debts of the Company for the shareholders including GELEXIMCO and LiLama; increasing the limit of borrowed working capital of the domestic banks from 400 billions VND to 800 billions VND Implementing the insurance for the exchange rate: for the change of EUR currency, it shows the threats of Thang Long Cement because of debt redundancy make up big rate; in coming years, the company needs to pay for the debt of 50 millions EUR Implementation methods are followed: select to buy the exchange rate EUR/USF in 1.38 – 1.62, amount of foreign currency is not limited; implementation fee: 2, 5%, total payment for the security: no Implementing the enhancement of taking back the debt, paying the attention to the overdue debts basing on classification of the debt 3.2.1.2 Controlling operation cost Firstly, operating the burning kiln under technological process to decrease the production cost because of loss, the restart of the kiln with a lot of cost Decreasing the input cost of the materials from 3-5% (except coal, electricity because of price increase), using dust coal 4A to reduce the cost; implementing the negotiation with Vietnam’s Mineral Coal Industrial Corporation to have the policy of buying the coal for reserves, aiming at avoiding the influence of the price increase in the period of 2011- 2015; controlling strictly the norm of materials, avoiding the loss 53 Operating the burning kiln is right to the process, aiming at avoiding halting the kiln to decrease the cost for restart, repairing; increasing the rate of additive by 18 – 20%; implementing the shipment by waterway, restricting the shipment by land to reduce the shipment cost 3.2.2 Re-develop the Marketing activity, including respecting the system of distribution channel; activity of customer service: 3.2.2.1 Re-develop Marketing activities Implement the Marketing activities under the orientation of the customers as the center, making the business philosophy basing on business culture of Thang Long Cement Build the identification set of Thang Long Cement trademark from mission, vision, core values, logo, slogan, website comprehensively; pay the attention to building the trademark, considering the trademark as one of the strong competitive tools of the cement sector besides the price, distribution channel, customer services Train the professional sales staff, customer care; in 2011 recruiting 10 employees of Department of Business to increase from 75 – 85 employees, from 2012 – 2015 keep the employees of Business Department with 90 people Re-structure current Business Department under professional orientation, appointing the title of Marketing Director instead of Chairman of the Department now to increase the role of Marketing and responsibility of the person undertaking Marketing Build the media strategy to create the trademark in the heart of the consumers, especially for the organizations Media strategy to the customers aims at using Thang Long cement with lowered price, quality and considerate customer care service; in which the price is the decisive factor to the success in the competition with the similar cement products in the market Participate strongly the sales promotion in foreign countries through the visits of Vietnam’s leadership to other countries; through the international fairs, exhibitions such as Shengzhai Exhibition Fair – China 54 3.2.2.2 Re-build distribution channel As expected in 3rd quarter 2011, grinding station in Ho Chi Minh City will go into operation It is necessary to set up the distribution network for the Southern provinces, currently Thang Long Cement only focuses from the Central provinces to the Northern ones In 2012, the Company needs to set the target of 100 distributors of level to expand the market Establish the network of new distribution agents (agent of level 1), including withdrawing the distribution right of last agents for the cement of the State-owned enterprise and now not participating in the distribution as well or possible to recruit the personnel there to work for Thang Long Cement Build the exclusive distribution channel to only sell Thang Long cement attached with the supplementary goods for construction process such as sand, gravels, iron, steel… to increase the selection about the construction materials but also have the only selection of Thang Long Cement 3.2.2.2 Implement the customer service: Influence on the seller (distributor): Frequently implement the activity of customer care (distributor, agent) such as providing the advertisement panels, other advertisement things like as shirts, hats, books, pens; providing the printing documents including brochure, CD introducing the products; continue implementing the organization of tours to foreign countries every year for the distributors who reach the plans Moreover, implement the policy of rewards and support for the distributors by financial levels for each product as follows:  For packed cement: implement the rewards to the distributors of 30,000 VND/ ton if reaching the committed output in the month  For sales in rainy season: Give rewards for the Northern distributors in the months of rainy season because of the difficulty in shipment, in case of reaching the sales output in the month, will be implemented as follows: 55 Table 3-7: Support level for sales in rainy season No Output (1,000 tons/ month) Reward of 1,000 VND/ton >= 1 >= 3 >= >= >= >= 11 >= 13 >= 15 Source: Calculation of Writers’ group and Department of Business  For separate cement: reward for the completion of the monthly plan: 25,000 VND/ ton; completion of annual plan: 10,000 VND/ton  For Clinker: price support in rainy season of 10,000 VND/ ton  Influence on buyer (final consumer): Implement immediately in the 1st quarter 2011, organize the Meeting of product introduction to the final consumers as the Bidders, concrete mixture stations (this was from 2008 – 2010 but not implemented yet); this requirement for Business Department of Thang Long Cement is to organize 01 Meeting like this at least every year Implement the promotion, giving the gifts for the customers (this has not been implemented from 2008 – 2010 yet): this policy is applied similarly for the seller Implement the product guarantee: this has not been implemented yet, this needs to be done to affirm the prestige of the trademark of Thang Long Cement which has committed about the quality for the customers In case, the buyer uses the product of Thang Long Cement, customer or supervisor of the project detects the understandard quality, Thang Long Cement Joint Stock Company has the responsibility for supplying other cement block so that the buyer reaches the requirement when using again 3.2.3 Establish the Research and Development Department (R&D) Establish the Research and Development Department (R&D) basing on mergence of 02 Departments including Department of Technique and Department 56 of Quality Control When 02 Departments operate separately, research and evaluation of the product quality not have the combination, leading to understandard cement blocks sold outside Functions, tasks, rights and work description of each individual in 02 departments when merging will be described again, creating the comprehensive effectiveness in working 3.2.4 Apply the operation method of the Factory under international regulations for a modern cement factory Implement the standard rules of operation of Thang Long Cement Factory under technological transference of Polysius Bidder – Republic of German Operate the process ISO 9001: 2008 about the quality control issued in 2010 Implement the management under the business plan and specific targets Leadership of Thang Long Cement needs to visit and survey for the modern cement factories in Vietnam and in foreign countries to exchange the information, enhance the learning to apply the advanced management method in operation of a modern factory with big scale Complete the forecast activity and threat management; build the system of report on general management Complete system of information technology to enhance the management performance: ERP, IP, Camera 3.2.5 Develop human resource Develop the enterprise culture, professional working environment to attract the talented people and keep the good people to devote for a long time for the Company There is the preferential mechanism of salary, rewards, stocks for the long-term employees For material facilities, at first in 2011, completing building the system of housing for the employees for the people from far province to work in the factory Continue to appoint the management classes every year to Polysius Bidder – Republic of German to learn about operation of the factory There is the policy of 57 the change of the employees among the Departments to have the human resource with the general skills to easily replace each other when leaving There is the planning policy for the next officials, especially engineers operating burning kilns Build the programs of training for the management, leadership levels about the professional skills and soft skills in daily work There is the evaluation mechanism from recruiting, training, attracting the human resource with high quality Concentrate on promoting the personnel activity: check and evaluate the capacity of current personnel, implement to train the objects after checking, implement strictly the new recruitment to ensure the quality Right in the st quarter 2011: train deeply about the accounting, production, sales for the employees of the Departments In 2011, train English for the leadership Recruit and have the policy of attracting the human resource with high quality working in Vietnam’s Cement Corporation and joint venture companies of cement production This is human resource which the enterprise has with the good working skills without paying for the training cost Recruit the engineers trained in foreign countries about the major of building materials 3.3 Roadmap of implementing business strategy of Thang Long Cement Joint Stock Company in the period of 2011 – 2015 Roadmap of implementing business strategy is made for each year, each year has a different task, but successful implementation of the tasks from last year will create the premise of development for followed years In which, 2011 is considered as the marginal year to implement strategic task for next years, especially approving business strategy plan for the period of 2011 – 2015 as the foundation to implement the strategy Operation board with heavy role is both the people proposing the strategy and also the people implementing the strategy The strategy is successful or not depending much on Operation Board from recognition to solution of the problems Specific works through years are followed:  2011: 58 - Executive Board submits the General Assembly of Shareholders for approval of business strategy in 2011 – 2015: expected to be approved dated April 1st 2011 - Complete all processes, regulations: 2nd quarter 2011 - Bring the grinding station in Ho Chi Minh City into operation: 3rd quarter 2011  2012: - Expand distribution channel in the Southern provinces; - Promote the cement export  2013: - Promote the execution of Thang Long cement line  2014: - Offer the shares for strategic partners  2015: - Operate the Thang Long cement line 2; - Promote listing the stocks 3.4 Control the implementation of business strategy in the period of 2011 – 2015: Implementation of business strategy is assigned for the targets by Executive Board basing on approval of General Assembly of Shareholders Periodically every month/ quarter/ year, Management Board is responsible for making the report to Executive Board about the works of month/ quarter/ year Implement the mutual cross examination among Departments in the Company Supervision Board is the clue to implement the examination of targets in the year Executive Board is the examination body of implementation of the plan for year in the period of 2011 – 2015 to make the report to Executive Board 59 CONCLUSION Together with economic development of Vietnam, the production sector of building materials including the cement sector is standing before the big opportunities However, according to the forecast from 2011 and later, the cement sector will be redundant around 10 million tons and possible to be more in next years The set problem is not only for the State management bodies but also for the enterprices, Thang Long Cement is also in the rule From analnysis of the value chain, internal factors, external factors, competitive advantage of Thang Long Cement Joint Stock Company is very high, competitive position in the market has been affirmed by technology, geographical location, finance…Competitors have also been implementing the methods of differrentiation, focus strategies Therefore, Thang Long Cement will go towards Cost leadership strategy basing on its available advantages Targets, plans from 2011 – 2015 are set Some solutions of finance, redeveloping the activities of Marketking, the personnel, factory management towards the modern have been mentioned and with the nature of suggestion to implement successfully those targets Thang Long Cement within 03 operation years has been highly appreciated by the market because the quality is not different from cement products with longterm trademark Together with selecting Cost leadership strategy, it will help Thang Long cement to stand in the position of Top in business strategy in the period of 2011 – 2015./ 60 REFERENCE 1- Documents in Vietnamese: - Associate Professor Doctor Le The Gioi, Doctor Nguyen Thanh Liem, Master Tran Huu Hai (2009), “Strategic management”, Statistics Publisher - Michael E Porter (2010) “Competitive strategy”, Youth Publisher - Reports of 2008, 2009, 2010, plan of 2011 – 2013 of Thang Long Cement Joint Stock Company 2- Documents in English: Abraham, 1999: “Strategic Alternatives and Choice – The Heart of Strategic Planning” Blocher et al, 2002: “Strategic Analysis and Strategic Cost Management” Brown et al, 2002: “Customer Value Measurement” Griffin, 2005: “Competitive Strategy” Hill and Jones, 1998: “Strategic Management: An Integrated Approach” 61 [...]... characteristic of the competition - Negotiation capacity of the supplier: suppliers of materials have the capacity to increase the price or lower the quality of the products or both increase the price and lower the quality of the products Analysis of real situation, tendency, collection intensity of 5 above forces decides the severe level of the competition, ability of reaching the victory of the enterprise... 30% of the success of the factory Electricity and coal are two exclusive sectors affected by the State-owned enterprises Annual increase of electricity price causes the difficulty for production, and electricity cut-off in relays also has the big influence on production process because of kiln halt Cement factories must buy electricity of Vietnam’s Electricity Group (EVN), except some factories built... agent of level 1 of Thang Long cement, these are main customers of Thang Long Cement Partnership: Vietnam’s electricity group is the electricity supplier for the factory; Vietnam’s Mineral Coal Industrial Group is the coal supplier  Management of materials: Input materials of cement production process need the big inventory quantity including limestone, coal and additive, Thang Long Cement Joint Stock... Thang Long cement about the export market which is higher than other competitors, expressing the foreign cement importers pay a lot of the attention to Thang Long cement, particularly Thang Long cement signed the export proforma contract of 300,000 34 2.85 tons of cement to the Middle East and Africa market; by January 2011, Thang Long cement is the only unit signing the contract with the big quantity... January 2011, Thang Long Cement exported the 1st lot with the quantity of 25,000 tons 2.3.4 Total internal – external factors of Thang Long Cement Joint Stock Company TABLE 2-4: Total internal – external factors of Thang Long Cement Joint Stock Company in comparison with the competitors External High factors Internal factors environment - IFE Strong Medium Weak Nghi Son, Tam Diep, Thang Long Medium Cam... Installment Corporation (Lilama) with 5%, the left of the natural persons Operation under the private mechanism has created the flexibility for Thang Long Cement in the management process In summary, controlling the cost of raw material inputs will help reduce the Thang Long Cement production costs, lower production costs and improve competitiveness on price Infrastructure SUPPO RT ACTIVI TIES Human... Revenue structure of Thang Long Cement under products 20 Source: Collection of writers’ group From Figure 2-2: shows the main income of sales of Thang Long cement is from cement, Clinker is fluctuated around 30% This is the income resource with stable structure within 03 last years About the market, Thang Long cement is expressed as follows: Figure 2-3: Market structure of Thang Long cement in Vietnam... modern technology, low production price and equal quality to the cement of Vietnam’s Cement Corporation 2.2.2.2 Power of the supplier: strongly affect because of the input price including coal, electricity, and limestone; The input materials of cement production are limestone, coal, electricity and additive In which, supply of limestone, coal, electricity has influence on the 25 production price, the profit... Thang Long Cement are ranked as strong, external factors are ranked as high Therefore, the competitiveness of Thang Long Cement is very high in the period of 2011 – 2015 2.3.5 IE Matric IFE TABLE 2-5: IE Matric 4 3 4 But Son Tam Diep 3 2.99 2 2.9 94 2 0 EFE 35 1.99 0 Nghi Son Thang Long Cam Pha Source: Collection and calculation of writers’ group From evaluation IE Matric, it shows that Thang Long Cement... cement factories need to have the minimum capacity of 1 million ton/ year, and then the investment for such a factory is also over 160 million USD The investment into the factory with the capacity of below 1 million ton/ year is considered as ineffective In recent years, investors themselves and the Government approve the cement projects with the capacity of from 2 million tons/ year and 28 more It ... capacity to increase the price or lower the quality of the products or both increase the price and lower the quality of the products Analysis of real situation, tendency, collection intensity of... factory Electricity and coal are two exclusive sectors affected by the State-owned enterprises Annual increase of electricity price causes the difficulty for production, and electricity cut-off in... Revenue structure of Thang Long Cement under products …… ……20 Figure 2-3: Market structure of Thang Long Cement in Vietnam…………………21 Figure 2-4: Market share of Thang Long Cement in the period