The need for research
For sustained growth, a business must establish a long-term strategy that serves as the foundation for its success In the fast-paced and competitive information technology and telecommunications sector, a well-defined business strategy is crucial for companies like Hoang Anh Technologies JSC Recognizing the significance of strategic planning, Group 3 has chosen to focus on the business strategy of this prominent IT and telecommunications firm.
Purpose, scope of the study, applicability
This research aims to analyze business strategies through theoretical frameworks, evaluating the business landscape from 2008 to 2010 By applying these theories, the study seeks to recommend effective business strategies for the firm for the period of 2011 to 2015.
Group 3 aims to provide businesses with valuable insights through this research topic, enabling them to objectively assess their enterprise's status, identify strengths and weaknesses, and gain a foundational basis for evaluating the effectiveness of their company strategy.
Research method
The research involved analyzing theoretical documents provided by instructors, reviewing relevant literature, and examining practical data from Hoang Anh Technologies JSC during the years 2008-2010, alongside macroeconomic data and sector indices.
Document structure
The structure of this dissertation consists of: Introduction, 3 Chapters and Appendix.
Chapter I - Rationale for business strategy summarizes the basic theory of business such as Michael Porter's five forces model, SWOT analysis …
Chapter II - Business situation analysis, present an overview of Hoang Anh Technologies JSC, results of the company operation for 2008-2010, assess the company’s performance
Chapter III - Recommendations on business strategy of the company in2011-2015, make recommendations on business strategy of the company for this period set in the context of general economic.
RATIONALE OF BUSINESS STRATEGY
Concept
1.1.1 The concept of business strategy
According to Fred R.David, business strategy is “the means to achieve long- term goals.”
According to strategic management syllabus of Griggs University "strategy is a series of commitments and actions to take to be a competitive advantage by exploiting core competencies in a certain market”
1.1.2 The role of business strategy
A well-defined business strategy provides a cohesive direction for all business plans, guiding enterprises in achieving their objectives and purpose It serves as the foundational principle that informs every action taken by the organization, ensuring alignment and focus in all endeavors.
In a rapidly evolving business landscape, companies must navigate both opportunities and threats in the market A well-defined business strategy enables organizations to identify and capitalize on these opportunities while proactively addressing potential challenges, ensuring they can successfully maneuver through market pitfalls.
Business strategy contributes to improve the efficiency of enterprise resources, strengthen competitive position, and ensure the continuous development and sustainability of long-term business.
The formulation and implementation strategy create a solid base to work out business policies and decisions in accordance with market fluctuations.
There are 3 kinds of strategy: functional strategy, business strategy, corporate level strategy
Orientation of building strategy may make the difference, low price or a mixture.
Competitive strategies with above-average profit rates
S tr at eg y R es u lt S tr at eg ic ac tio n s In p u t
1.1.3 The process of developing strategies
Building effective basic strategies involves several key steps The first step is environmental analysis, which encompasses both the external environment—covering the general and industry-specific contexts—and an internal environment assessment The second step focuses on combining these analyses to inform strategic decisions.
After selecting strategy, company moves to implementation phase and finally, examines and evaluates the strategy implementation to amend or build the new strategy
Bảng 1: Quy trình quản trị chiến lược
Sources: Slide lecture Strategic Management - Griggs
External environment analysis
1.2.1 Analysis of general environment by PESTLE model
Conducting a general environment analysis allows businesses to identify and assess potential opportunities and threats within their operating landscape This process enables companies to establish clear business objectives, set achievable long-term goals, and develop strategies that align with their overall mission.
It can be used PESTLE model to analyze the general environment This model uses elements:
External factors significantly influence economic sectors, affecting businesses and industries directly Companies must assess these objective factors to understand their impacts and develop appropriate policies and strategies for their operations.
Political factors play a crucial role in shaping the economy and influencing businesses, encompassing government stability, labor laws, tax policies, tariffs, trade restrictions, and environmental regulations These elements significantly impact all businesses within a region, as regulatory laws can profoundly affect the survival and growth of various industries Companies operating in a specific administrative area must adhere to the legal and institutional frameworks established in that region.
Economic factors play a crucial role in shaping business decisions, as the growth rate of the economy generates new demand, while inflation influences interest rates and investment decisions Additionally, the unemployment rate affects hiring practices, and exchange rates can impact interest rates, fiscal policy, and wage control To make informed investment choices, businesses must carefully consider these economic indicators and their implications for various sectors and regions.
Sociocultural factors play a crucial role in shaping consumer behavior, as each country or region possesses unique cultural values and social characteristics These values not only define a society but also contribute to its development and sustainability The interaction between diverse cultures influences consumer psychology and lifestyle, paving the way for new opportunities within various industries.
Technological factors play a crucial role in shaping the business strategies of enterprises In today's rapidly evolving technological landscape, the emergence of new technologies presents both opportunities and potential threats to business survival and growth To remain competitive, companies must strategically and flexibly integrate science and technology into their operations, ensuring they are proactive rather than reactive in their development.
Legal factors refer to all the laws directly connected to a business/company and its area of activity, including consumer law, antitrust law, discrimination law and health and safety law.
Environment factors, including factors such as natural resources, environmental pollution, lack of energy.
In addition to the fundamental elements of the PESTLE model, globalization emerges as a significant macro factor influencing industries today This trend presents both opportunities and challenges for businesses and governments, shaping the landscape of production and commerce in a rapidly evolving global market.
1.2.2 Analysis of sector environment by Michael Porter's Five forces model:
M Porter identifies five key forces of competition that shape industry dynamics: the threat of new entrants, the intensity of rivalry among current competitors, the bargaining power held by buyers, the bargaining power of suppliers, and the potential threat posed by substitute products.
M.Porter showed that the more powerful these forces being, the more limited ability of existing businesses to raise prices and earn higher profits The tasks set for
Bar gaini ng power of B uyers
PotentialEntrants Threat of Substitute Products, Service
In the competitive landscape, firms must recognize the opportunities and threats posed by changes in the five forces model By developing adaptive strategies, businesses can shift the balance of power among competitive forces to their advantage, ensuring sustained success in the market.
Figure 1.2: M.Porter’s Five Forces Model
Source: Strategic management syllabus, Lê Văn Tâm, p.45.
1.2.3 Synthetize, evaluate the impact of external factors on businesses by EFE
The EFE Matrix is a strategic tool that synthesizes and evaluates the impact of external factors on organizations The process involves several key steps: first, identifying a comprehensive list of external factors; next, assessing the importance of each element; then, classifying these elements; scoring them accordingly; and finally, summing the scores to derive meaningful insights.
Internal environment analysis
That is to analyze the company’s situation and ability to find out its weaknesses, strengths, taking advantages of its strengths to overcome the limitations.
Analysis of human resources: leadership, staff
Analysis of technological resources: machinery, equipment
Analysis of financial resources: capital, business assets, financial indicators…
Analysis of marketing: Assess ability to meet the market demand of the business: product types, quality, price …
1.3.2 Analysis of the organizational capabilities of enterprise: whether organizational capabilities of the business is consistent with the strategy of the business or not, have sufficient capacity to carry out the strategy proposed or not.
1.3.3 Analysis of the competitiveness of enterprises: the analysis on competitiveness and maintaining, improving the business position in the market.
1.3.4 Synthetize, evaluate the impact of internal factors on businesses by IFE Matrix:
The IFE Matrix is a valuable tool for synthesizing and evaluating the impact of internal factors on organizations To create an IFE Matrix, follow these steps: first, identify a list of relevant factors; next, determine the importance of each element; then, classify the elements accordingly; score each factor; and finally, sum the scores to assess the overall impact.
Synthetize, evaluate internal and external factors by IE Matrix
IE Matrix is used to synthetize, evaluate internal and external factors
Total Impportance Soce of EFE Matrix
Total Importance Score of IEF Matrix
- Position of firms in 3 squares (I, II, III) is area “to develop and construct": should implement focus strategy (market penetration, market development and product development).
- Position of firms in 3 squares (IV, V, VI) is area "to acquire and maintain": should implement market entry strategies and product development
- Position of firms in 3 squares (VII, VIII, IX) is area "to reap and eliminate".
SWOT analysis
SWOT abbreviate of: Strengths, Weaknesses, Opportunities, Threats SWOT analysis matrix is useful to help us understand the problem or decision-making in the organization and management of business activities
SO: Develop strengths to take advantage of opportunities, orient business
ST: Develop strengths to minimize and avoid risks
WO: Overcome weaknesses to take advantage of opportunities
WT: Overcoming internal difficulties, challenges from the outside
SWOT analysis helps to produce feasible strategies which can select by disposing, combining important internal and external factors.
Evaluate, select strategies by QSPM Matrix
The QSPM matrix integrates insights from the analysis of both internal and external environments, utilizing tools such as the EFE matrix, IFE matrix, and the combined results from the IE Matrix By employing the SWOT matrix, it provides an objective evaluation of strategies, enabling effective selection for strategic decision-making.
Strategies to select Reasons for attractive score
BUSINESS SITUATION ANALYSIS
An overview of the process of formation and development of Hoang Anh
Hoang Anh Technologies JSC was established in 2006 with the business:
IT equipment: provide IT equipment, products mainly include: Computer, Server,
Hoang Anh JSC specializes in supplying IT equipment, particularly laptops, to state units, non-government organizations, and corporations The company primarily offers computers from renowned manufacturers, including Elead computers by FPT and CMS computers by CMC Its main clientele consists of the Ministry of Education and various educational institutions.
Hoang Anh JSC specializes in telecommunications testing services, offering both regular and irregular evaluations for equipment systems, networks, and information technology Their expertise includes designing and conducting tests for technology selection, network equipment procurement, and service bidding, as well as acceptance measurements and roaming assessments to evaluate network quality and service performance In addition to testing, the company provides various telecommunications services, such as mobile network optimization, driving tests, roaming, and Q voice equipment VNPT is a key client in their telecommunications testing sector.
Hoang Anh offers a range of services beyond its primary focus on computer equipment and telecommunications testing These include investment consulting, tender management, telecommunications infrastructure development, and the design and implementation of information systems for businesses Additionally, Hoang Anh provides system maintenance and custom software development tailored to meet the specific needs of enterprises.
After nearly six years of development, Hoang Anh Technologies JSC has transformed from a small enterprise into a prominent player in the information technology and telecommunications sector, establishing a strong brand presence and attracting numerous large organizations as clients.
- Ministry of Education and Training
- Bank of Agriculture and Rural Development
- Non-governmental organizations, construction corporations such as: Hud, Licogi
Hoang Anh JSC is a strategic partner of major corporations such as:
- Software: Microsoft, Oracle, CMC, FPT…
- Equipment: HP, Canon, Dell, Ericsson, Bird, Actix…
Statistics on average in 2008 - 2010, the profits brought back from the main products and services have the following results
Sản phẩm, dịch vụ khác; 20%;
Figure 2.1: average return from 2008-2010 of Hoang Anh JSC
The company is strategically evolving to offer IT equipment and telecommunications services, focusing on two key profitable products: computers from top domestic manufacturers and telecommunications testing services.
2 2 Results of the company operation from 2008-2010
2 Turnover of goods and services 80,154,877,455 86,412,754,612 92,543,549,746
3 Gross profit from sales and services 8,015,487,746 7,504,147,916 9,542,002,987
The company's financial data indicates stability, with modest values for ROE, ROA, and revenue growth In 2009, sales revenue rose by 6,257,877,157 VND, reflecting an 8% increase from 2008 However, in 2010, sales revenue increased by 6,130,795,134 VND, marking a 7% rise from 2009, yet still showing a decline compared to the previous year This decline, while present, is not significant given the economic challenges, including high inflation and domestic currency depreciation, which led consumers to spend more cautiously Consequently, the reduction in revenue and profit aligns with broader business trends The company's financial health remains relatively strong, with a slight decrease in equity in 2009 followed by a 2% increase in 2010, despite a high level of short-term debt.
For fast payment index at 31/12/2010 was 0.74
