VIETNAM NATIONAL UNIVERSITY, HANOI HANOI SCHOOL OF BUSINESS Doan Duc Toan BUSINESS STRATEGY FOR TRUNG NGUYEN’S TEA PRODUCT Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATION THESIS SUPERVISORS: DR.NGUYEN NGOC ANH HA NGUYEN, MBA Hanoi – 2007 Table of contents Abstract……………………………………………………………………….i Acknowledgements………………………… ……………………………….ii List of figure………………………………….……………………… ………iii List of table…………………………………… …………………………… iv INTRODUCTION Necessity of the thesis Purpose Key research area Methodology Constructions of the thesis Outline Chapter 1: Literature review 1.1 Strategies 1.2 Matching strategy to a company’s situatition 1.2.1 1.2.2 1.3 Industry Development Stages Firm Capability 10 26 Fuction strategies 39 Chapter 2: Case study of Trung Nguyen corporation on tea industry 2.1 Case study method 42 2.2 Data presentation 44 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.2.6 Overall Market Growth Consumption Product and Production Technology Pricing Patterns Promotional Efforts Entry and Exits 44 51 52 59 61 63 2.2.7 3.2.8 2.3 Capital Investment Requirements Trung Nguyen Company's Competitive Position 63 64 Data analysis 67 2.3.1 2.3.2 2.3.3 2.3.4 Industry Life Cycle Fragmented Industries Company Situation Findings 67 71 73 76 Chapter 3: Recommendation and conclusion 3.1 Successions and the action plan 79 3.1.1 3.1.2 3.1.3 3.1.4 3.2 Strategies in Marketing Strategies in Production/Operations Strategies in Finance Strategies in Human Rource 79 83 86 86 Conclusion 88 REFERENCES APPENDIX LIST OF FIGURES Figure 2.1 Tea Area Figure 2.2 Area Under Cultivation Figure 2.3 Province Growing Tea Figure 2.4 Tea Out Put Figure 2.5 Tea Export LIST OF TABLES Table 2.1 Growth Of Tea Area Table 2.2 Growth Of Tea Area In Province Table 2.3 Growth Of Tea Output Table 2.4 Growth Of Tea Export Table 2.5 Consumptione Table 2.6 Comparing Price Of End Product Table 2.7 Comparing Price Of Meterial Table 2.8 Comparing Price Of Meterial Table 2.9 Comparing Price Of Meterial INTRODUCTION The first chapter will provide readers with an insight to the research area It will begin by briefly necessity of the thesis that will be followed by the purpose of the study and research questions, key research area, methodology using for research and outline for overall thesis NECESSITY OF THE THESIS In recently years, The Vietnam’s economy has been changed comprehensively For few years ago, state owned company is considered as backbone of national economy, but now, we need to make an examination of it Appearing in strongly way private enterprise, specially, enterprises are descended from empty hands By miraculous steps, those enterprises have stepped up onto glorious dais, up to now, when search total process of development of it, people only feel extremely miraculous and admire that can not talk by word Trung Nguyen is one of those enterprises making miraculousness To start by empty hand, up to now, Trung Nguyen has become a very famous company When looking back in the history of Trung Nguyen, one can see that Trung Nguyen had difficult initial steps, without property, traditional knowledge of business With this difficult start, many other companies would fell they began their businesses under a much better condition The history shows that successes only come with people who try one’s best by heart and brain By this element but is not other things, Trung Nguyen has made a success for itself I have been lucky having internship in Trung Nguyen for few months, both acquiring sprit and learning experience With assignment that complete graduated thesis, I have chosen field tea, area that Trung Nguyen is newcomer Business strategy is compared as a map that looking it, people can know which path is both reliable and shortest to succeed Base on that, I have chosen subject: Built business strategy for tea of Trung Nguyen With general approach, not go deep into the details of each aspect of business action of Trung Nguyen, expected outcome will supply more information for Trung Nguyen about tea industry in what stage of development process with characteristics and strategies to succeed in that environment PURPOSE The purpose of this thesis is to study external and internal environment of Trung Nguyen Company to define the optimal strategy for its tea products Research Question:  How to match strategy to a company's situation? KEY RESEARCH AREA The scope of this thesis is limited to: - The tea industry in Vietnam and Trung Nguyen Corporation together with its business strategies - Strategic choice that such a firm could apply in its own environment METHODOLOGY Methodology usually refers to the general approaches to research while method refers to techniques for gathering evidence Therefore, methodology is a theory and analysis of how a research does or should proceed Specific method for the case study will be described and elaborated upon later in the chapter three of the thesis 4.1 Research Purpose A research can classify into three basic purposes exploratory, descriptive and explanatory This study comes with descriptive and explanatory purpose more than exploratory purposes only 4.2 Research Approach The research approach of this study is qualitative Qualitative research approaches have traditional been favored when the main research objective is to improve the understanding of a phenomenon is, especially when this phenomenon is complex and deeply embedded in its context Its many methodologies and techniques have helped researcher get a better grasp of a variety of management situations 4.3 Research Method Research method were used in this thesis is case study According to theory, a case study approach should be used when how or why questions are being posed about a contemporary set of events over which the researcher has little of any control This study is based on research question of how character and focuses on contemporary sets of events 4.4 Data Collection Method There are documentary sources, archival records, participant observation, and direct observation Each of these data sources has their strengths and weaknesses Since no 10 single source of data have a complete advantage over all the others and given that the data sources are highly complementary, and the recommendation by the researchers that a good case study may want to use as many sources as possible In this study data will be collected from source: document, archival records, and direct observation 4.5 Data Analysis There are two forms of analysis for the data collected in a case study: within case analysis and cross case analysis In my study, the within case analysis will be selected From examines raw data using many interpretations in order to find linkages between the research object and the outcomes with reference to the original research questions Data reduction: The process of collecting, focusing, simplifying, abstracting, and transforming the data The purpose is to organize the data so that final conclusions can be drawn and verified Data display: Taking the resumed data and displaying it in an organized, as table, diagram, to conclusion can be more easily drawn  CONTRIBUTIONS OF THE THESIS Provision of an approach in building business strategy, which helps Trung Nguyen Corporation in guiding its business activities  Findings of the characteristics of environment of the tea industry in Vietnam, and the position of Trung Nguyen in this industry  Strategic analyses and recommendations in marketing, product operation, human resource and finance to improve business activities 11 OUTLINE The thesis is divided into four chapters: The chapter one will provide readers with an insight to the research area It will begin by briefly necessity of the thesis that will be followed by the purpose of the study and research questions, key research area, methodology using for research and outline for overall thesis The chapter two is a summary of relevant theories connected to the research questions Chapter three contains a case analysis to Trung Nguyen, including case study method, analysis and findings of matching strategy to the firm’s company's situation Chapter four recommendations and conclusions will be presented 12 CHAPTER 1: LITTERATURE REVIEW The chapter summaries theories connected to research questions The literature has been collected to address the research questions 1.1  STRATEGIES A strategy is a long term plan of action designed to achieve a particular goal Strategy applies to many disparate fields, such as: Military strategy, Marketing strategies, Strategic management, Football strategy, Game theoretical strategy, economic strategy, Neuro-linguistic programming strategy.1  A strategy in game theory is a sequence of activities and reactions, that fully determine an agent’s behavior in a game or a business situation The mathematically precise description of behavior is connected to computer programming and algorithms.2  In general, the plan or policy for arbitrating between multiple, concurrent requests for the use of a device Specifically in disk device drivers, the policy for scheduling multiple, concurrent disk block-read and block-write requests.3  A strategy is a long term plan for success, to achieve an advantage In force terms this is the key milestones and targets for the coming year These are based upon the Governments PPAF requirement.4  Describes the differentiating activities an organization pursues to gain competitive advantage Situated at the center of the Balanced Scorecard system, all performance measures should align with the organization's strategy Strategy Taken from website: en.wikipedia.org/wiki/Strategy Taken from website: en.wikipedia.org/wiki/Strategy_(game theory) Taken from website: biology.ncsa.uiuc.edu/library/SGI_bookshelves/SGI_Developer/books.html Taken from website: www.devon-cornwall.police.uk/v3/help/glossary.htm 13 ... Built business strategy for tea of Trung Nguyen With general approach, not go deep into the details of each aspect of business action of Trung Nguyen, expected outcome will supply more information... Growing Tea Figure 2.4 Tea Out Put Figure 2.5 Tea Export LIST OF TABLES Table 2.1 Growth Of Tea Area Table 2.2 Growth Of Tea Area In Province Table 2.3 Growth Of Tea Output Table 2.4 Growth Of Tea. .. study external and internal environment of Trung Nguyen Company to define the optimal strategy for its tea products Research Question:  How to match strategy to a company''s situation? KEY RESEARCH