LUẬN VĂN THẠC SĨ Xây dựng chiến lược kinh doanh cho công ty cổ phần thiết bị VINACOMIN từ 2015 đến 2020 THESIS MBA BUILDING BUSINESS STRATEGY FOR VINACOMIN MACHINERY JOINT STOCK COMPANY FROM 2015 TO 2020 Vinacomin Machinery Joint Stock Company (VMC in abbreviation form) having headquarter at No 486, Tran Phu Road, Cam Pha Town, Quang Ninh Province would like to give some comments on the working period of the MBA program’s group of students and assessment of the report: “BUILDING BUSINESS STRATEGY FOR VINACOMIN MACHINERY JOINT STOCK COMPANY FROM 2015 TO 2020” proposed by the group About the working period at VMC The researching group with four members has contacted and come to work at VMC since October 26th, 2009 In the receiving and working meeting with the group of students, VMC Director very welcomed the intention and researching content presented by the group’s leader Board of Directors committed to provide necessary document, hold practical trip (if necessary) and arrange workroom at VMC for the group when they came to collect data or hold discussions In the working period at VMC (from October 26 th to December 12th, 2009) the group seriously observed the Company’s rules and regulations, had serious working attitude, prudent and reasonable behaviors In the data collecting, analyzing and report drafting process, the researching group held two workshops to present draft strategy and consulted the opinions of the Company board of leaders All the document and reports borrowed by the group were returned sufficiently on December 12th, 2009 Assessment of the report’s content Under the academic viewpoint about building and administrating strategy, VMC does not have any comment on the report The report has applied tools to analyze ii models methodically and particularly helped VMC locate ourselves and be aware of our status on the synthesis of business environment elements Under practical viewpoint, the report has mapped out the business strategy of VMC from now to 2015 logically and practically Most importantly, VMC is very satisfied with the detailed solutions recommended by the report to realize the fundamental targets of the strategy The report’s applicability to reality is its core value VMC realizes that this business strategy is very suitable and fairly detailed to VMC in this period; at the same time it does not go against the strategic orientation of the Vietnam National Coal - Mineral Industries Group as well as the Prime Ministerial Decision 186/2002/QĐ-TTg, dated December 26th, 2002 VMC board of leaders will accept this report (offered to VMC by the group) and continue to perfect it to set the basis for the implementation of our business strategy in 2010-2015 period Finally, on behalf of the staff and workers of Machinery Joint Stock Company – Vietnam National Coal – Mineral Industries Group, I would like to thanks teachers and students for your affection and interest in our Company We hope that the relation between study and research is always attached to reality and supports organizations and enterprises as the way University of Griggs - USA and Center for Educational Technology and Career Development – Vietnam National University have oriented their groups of students recently We would like to sincerely thank and wish healthy all the teachers and students of MBA program, Griggs University – USA and Center for Educational Technology and Career Development – Vietnam National University Recipients: COMPANY’S DIRECTOR - As dear; - The group of students; - Save at personal department, archives iii ACKNOWLEDGEMENT We would like to express our gratitute to all those who gave us the possibility to complete this capstone project report We would like to thank Teachers of Griggs University and Educational and Training Center – Vietnam National University for organizing this great MBA program We also would like to thank VINACOMIN, especially Dr Phung Manh Dac – Deputy General Director of Vietnam National Coal – Mineral Industries Group, Chairman of Administration Board of VMC Company; Dr Ta Ngoc Hai – Mechanics Department Manager, Vietnam Coal – Mineral Industries Group; Mr Cao Ngoc Dau – Institute Head of Mine Energy Mechanics and Mr Nguyen Cong Hoan – Director of VMC company for contributing ideas and creating conditions for us to complete this report, without them this report could not be completed We would like to give our special thanks to our families for their patience, support and encouragement during all the time we carried on this capstone project report as well as the entire period of the MBA program Bui Ngoc Lan Mai Ngoc Thach Le Van Bang Duong Bao Linh iv CONTENTS ACKNOWLEDGEMENT iv CONTENTS .v List of abbreviated words vii List of tables vii List of figures vii GENERAL INTRODUCTION Chapter I: REASONING BACKGROUND 1.1 Overview of business strategy 1.1.1 Concept of business strategy 1.1.2 Business strategic management 1.1.3 Benefits and limitations in business strategy building 1.2 Analyzing environmental factors impact business strategy 1.2.1 External environment .6 1.2.2 Enterprise’s internal environment 1.3 Building business strategy 1.3.1 Information for building strategy 1.3.2 Expert method to forecast business environment 10 1.3.3 Analyzing matrix SWOT .11 1.3.4 Determining competition status of the enterprise 13 1.4 Choosing business strategy 17 1.4.1 Concentrated growth strategy .17 1.4.2 Diversification strategy 18 1.4.3 Integration growth strategy 19 1.4.4 Narrowing strategy 19 1.4.5 Suitable strategy for living circle of product .19 1.4.6 Joint venture and association strategy 19 1.4.7 Competition strategy 19 1.4.8 Brand name strategy 20 1.5 Implementing the strategy 20 1.5.1 Reviewing strategic environment 20 1.5.2 Evaluating, adjusting and ensuring resources 21 1.5.3 Determining organization structure to implement the strategy 22 1.6 Checking and evaluating business strategy 22 1.6.1 Controlling basic grounds of company’s strategy .22 1.6.2 Reviewing basis of the strategy 23 1.7 Research method of the report 23 1.8 Scientific and practical meaning of the report 23 Chapter II: ANALYZING REAL STATE OF VMC 25 2.1 Overview of the enterprise 25 2.1.1 Process of establishing, developing of VMC .25 2.1.2 Human resources and organizational structure 27 2.1.3 Traditional product line of VMC 30 v 2.2 Analyzing situation and results of business activity of VMC from 2005 - 6/2009 34 2.2.1 Business production situation 35 2.2.2 Market 36 2.2.3 Business efficiency 38 2.3 Analyzing business environment 38 2.3.1 Analyzing external environment 38 2.3.2 Analyzing internal environment 44 2.4 Results and shortcomings of VMC in the past time 46 2.4.1 Results 46 2.4.2 Shortcomings need to be improved .47 2.5 Analyzing problems of strategy and administration of VMC .47 2.5.1 General objective of the strategy 47 2.5.2 Strategy orientation 48 2.5.3 Basic objectives 48 2.5.4 Impact’s factors 49 Chapter III SOLUTIONS, RECOMMENDATIONS AND CONCLUSION 55 3.1 Recommending business strategy .55 3.2 Solutions to fundamental implementation and management of business strategies 55 3.2.1 Modernization of manufacturing technology 56 3.2.2 Modernization of repairing technology .56 3.2.3 Improvement of ernegy supply system 57 3.2.4 People development strategy .57 3.2.5 Science technology development 58 3.2.6 Environment protection and Industrial hygiency 59 3.2.7 Labour protection and Ocupational safety 60 3.2.8 Corporation 60 3.2.9 Brand name Development 60 3.2.10 Enhancing marketing activity 61 3.2.11 Organization .61 3.3 Proposal 61 3.4 Conclusion 62 REFERENCES 64 vi List of abbreviated words VMC VINACOMIN – Machinery Join Stock Company WTO World Trade Organization EPC Engineering - Procurement - Construction CNC Computer Numerical Control FO Fuel Oil CAT Caterpillar Inc COALIMEX Coal Import and Export Joint Stock Company - Vietnam National Coal – Mineral Industries Group MATEXIM Material and Complete Equipment Export - Import Corporation LILAMA Vietnam Machinery Erection Corporation LICOGI Infrastructure Development and Construction Corporation VINAINCON Vietnam Industrial Construction Corporation IMSAT Institute for Medical Science and Technology NARIME Institute for Mechanical Engineering List of tables Table 1.1 Table 1.2 Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table 2.5 Table 2.6 Evaluating influences of business environment Model of theory matrix SWOT Labor structure of VMC at the time of September 30th, 2009 Labor quality of VMC Manufacturing, repairing devices capacity of VMC Results of business activities of VMC from 2005 to June, 2009 Exhibit value of VMC from 2005 to 2009 Value of mechanical production and revenue density of five 11 13 29 30 32 35 36 44 Table 2.7 Table 2.8 Table 2.9 Table 2.8 inside sector units Collecting the business environment of VMC Total score of matrix EFE Total score of matrix IFE SWOT matrix of VMC 51 52 52 54 List of figures Figure 1.1 Figure 1.2 Figure 1.3 Figure 1.4 Model of competitive forces in ME Porter Mc Kinsey matrix IE matrix Concentrating on a market part vii 13 17 18 Figure 1.5 Figure 1.6 Figure 1.7 Figure 2.1 Figure 2.2 Figure 2.3 Figure 2.4 Figure 2.5 Specializing the market Specialization optionally including many fragments Specializing products Organizational structure of VMC Sale revenue density of outside sectiors Profit rate on revenue Competition position of VMC IE matrix of VMC viii 18 18 18 31 38 39 50 53 GENERAL INTRODUCTION Machinery joint stock company directly under Vietnam National Coal – Mineral Inducstries group, which is abbreviated as VMC (VINACOMIN Machinery Joint Stock Company) was changed from Cam Pha Central Mechanics Company The company was established in 1968, has headquarters at 486, Tran Phu Road, Cam Pha town, Quang Ninh For years of building and developing, VMC has become the leading equipment, accessories manufacturing company in Vietnam and is gradually reaching to international market Products of VMC mainly are equipment, accessories serving mine ores, cement, and electricity industry in the whole country Scale of the enterprise is relatively big with 1,300 staffs and annual revenue is about VND 800 billions Average growth speed of the company in the last five years has reached 20%/year VMC organizes production into groups: accurate processing, steel component production, rough draft supply (founding, processing pressure) and other auxiliary production At present, VMC is a joint stock company under Vietnam Mine - Mineral Group The company has relatively diversified number of commodities, has many customers of different organizations For many years, VMC has had many achievements in business production, contributing to industrialization – modernization process of Vietnam mechanics sector in general and mine sector in particular To be in accordance with the market economy and international economic integration that Vietnam is building and developing, implementing Decree No 109/2007/NĐ-CP dated June 21st, 2007 of Prime Minister on changing State owned enterprise to joint stock company and Resolution of the Board of directors of Vietnam Mine - Mineral Group on changing enterprises in the group to operate according to equitization model, VMC has officially changed operation to joint stock company model from March 30th, 2008 VMC has ownership structure as follow: State holds 36%, staffs hold 37.5%, trade union hold 1.5% and external shareholders hold 25% Charter capital of VMC is VND 40,850 million Before changing to equitization, VMC operated according to State Enterprise Law and was controlled by plan of superior, and thus business strategy building and administration of the company was not displayed clearly Business production activities of VMC mainly were to ensure output and revenue according to the assigned plan, even profit target When changing to operate according to charter of joint stock company, it is clear that VMC has to become more initiative and pay more attention to business strategy building and administration of the company This is also a common interest of all the enterprises when changing from State owned companies to joint stock ones From the real state above, our study group did choose the thesis: “BUILDING BUSINESS STRATEGY FOR MACHINERY JOINT STOCK COMPANY – VIET NAM MINE - MINERALS FROM 2015 TO 2020” to be the content of Capston project of International business administration master training program The objective of this report is to evaluate relatively comprehensive the real state of business production of VMC Find existing advantages, strong points as well as challenges, weak points of the company At the same time, discover opportunities, risks threatening the company in the future From that, build business strategy of VMC from 2015 TO 2020 Study group set the mark of 2015 for business strategy of VMC to give petition and recommend relatively comprehensive and specific solutions However, our group also set a goal that business strategy of VMC must have look forward to 2020 to be in accordance with the development strategy of coal sector which was built, as well as Decision No 186/2002/QĐ-TTg dated December 26th, 2002 of Prime Minister regarding ratifying development strategy for Vietnam mechanics sector to 2010, and vision to 2020 Table 2.7 Collecting the business environment of VMC Environmental elements Outside elements Integration trend, opening, joining WTO Rapid development of technique Environment of politic and law Competing pressure on providers Pressures from customers Pressures from hidden competitors Competing pressures from replacing products Competing pressures inside sector Inside elements Infrastructure, technique equipment Human resources Geographical places Economic zone of active development convenient Import-export activities Discipline of production and technique is weak no differences among products Product price is not competitive Information managing and monitoring mass projects have shortcomings Important level of elements for sector (high 3, medium 2, weak 2) Effect on VMC (much 3, medium 2, less 1, no effect 0) Affecting features of elements (positive +, negative -) Total points 2 + +4 3 + +9 + +6 1 - -1 - -6 -1 - -6 - -2 + +6 3 2 + + + +9 +4 +6 2 + +4 - -2 2 - -4 2 - -4 2 - -2 -4 By using analysis, researching resuts, matrix EFE and IEF are built based on 10 main elements that was mentioned in our Opportunity & Threats analysis Important level of each element and its effect are shown as belows 51 Table 2.8 Total score of matrix EFE Order Extrenal elements Important level Classification Important score Rapid development of technology 0.15 0.60 Trend of integration, opening and joining WTO 0.10 0.30 Political and legal environment 0.15 0.45 The advantage environment of business sector 0.10 0.30 Developing strategy of TKV 0.10 0.20 Pressure from Customers 0.15 0.60 Competitive pressure from Suppliers 0.05 0.10 Pressure from hidden competitors 0.05 0.10 0.10 0.20 0.05 1.00 0.15 3.00 10 Competitive pressure from replacing products Internal competitive pressure Total Table 2.9: Total score of matrix IFE Order Inside elemetns Important level Classification Important point Infratructure, technical equipment 0.16 0.64 Human resource 0.16 0.10 0.64 0.20 0.075 0.15 0.055 0.055 0.10 0.40 0.10 0.30 Advantage business geography Active development of Business zone Convinient import-export activities Discipline of production and technique No different among products Incompetitive price 0.10 0.40 Information Managing and monitering big projects EPC Total 0.05 0.15 0.10 0.20 10 1.00 52 3.13 With expert method and analysis steps of building EFE and IFE, the total score of positive factors and negative factors in each group of internal factors and external factors with PointIFE = 3.13; PointEFE = 3.0 We define the point of strategic status of VMC in I.E matrix VMC belongs to the region of developing and building (figure 2.5.) EFE IFE I II III IV V VI VII VIII IX Figure 2.5 I E matrix of VMC SWOT matrix (table 2.8.) is built with the strong points, weak points of enterprises, together with opportunities and challenges of business environment It considered as foundation to defining the suitable business strategy 53 Table 2.8 SWOT matrix of VMC Strong points Weak points SWOT matrix - Infrastructure, equipment, technique - Human resources - Convenient economic geographical place - Economic zone of active development - Activities of export and import are convenient - Discipline of production and technique is weak - No differences among products - Product price is not competitive - Information - Managing and monitoring mass projects have shortcomings Opportunity- SO strategy WO strategy - Big market of inside sector - Market of outside sector is broadening - Good cooperation - Moving trend in society creates favorable play ground - Opportunities of renovating equipment, technique with low cost - Covering the traditional markets - Improving the markets of outside sector - Improving the production of export-goods - Improving development investment - Developing the market of outside sector under the direction of business cooperation - Broadening the insidesector market - Improving the fields of creating competitive products Threats ST strategy WT strategy - Sector market is big but it is not broadened - Increasing competition with export goods - Attract talents difficultly - Need to renovate old equipment - Increasing domestic competition - Improving to produce traditional products - Broadening inside-sector market, taking advantages of available equipment - Diversifying the activities of VMC under consensus direction - Focusing on traditional market to sustain development - Improving domestic cooperation and diversifying under the direction of mixture - Priorities must be the field of low cost, collecting capital rapidly 54 Chapter III SOLUTIONS, RECOMMENDATIONS AND CONCLUSION 3.1 Recommending business strategy With the strategies showed in the matrix SWOT, competitive status in MC KINSEY matrix and the competitive status of VMC in I.E matrix, the group of research builds the business strategy of VMC in period of 2010- 2015 as follow: “From 2010 to 2012, focus on the conncentrated growth strategy in order to maximum mobilizing of power resource, upholding the advantages, harmonised transmittent to integrated growth by end of 2012 Developing new market, investing, renewing technology, differentiating the products by quality improvement Increasing business result and qualified human resource on the sustainable business treand.” The business strategies of VMC are proposed basing on the analysis of competitive capacity and strategic position of VMC in business environment and core values of VMC These business strategies are business strategy at enterprise level, with solution groups to aim at the best mobilization of available resources, bringing into full play the core values of VMC to exercise concentrated growth strategy associated with selected investment to grow and integrate Pursuing this business strategy, VMC will deploy measures to implement strategies under the sustainable development orientation The proposed solutions needs to satisfy the implementation of strategic target under the roadmap and steps but also take into consideration the satisfying capacity of VMC’s available resources 3.2 Solutions to fundamental implementation and management of business strategies With a fairly good evaluated competitive strategy (matrix MC KINSEY) and strategic position represented via matrix I.E., VMC is suggested 55 to have solution to implement concentrated growth strategy with the orientation to maximize available resources and strength to occupy traditional market through good market activity and raising product quality 3.2.1 Modernization of manufacturing technology Modernizing manufacturing technology, raising quality and capacity of existing equipments and technology Upgrading and modernizing (CNC) some existing equipments to boost processing speed, levels of accuracy and applied scope of them Perfecting and upgrading production capacity of pressing processing period Installing horizontal forging machine 2.000 to manufacture big axles serving shipbuilding industry Completing and upgrading the thermal checking system to enhance the quality of thermal treatment system Improving intermediate frequency tempering system in plate and axis forms; modernizing thermal checking process by present advanced measuring system Upgrading equipments, completing machine part casting technology (melting, refining, and making FURAN mould) with the output of 6,000 tonnes per year Attaching importance to compound and abrasion-proof steels 3.2.2 Modernization of repairing technology Modernizing repairing technology, raising repairing quality and making the most use of equipments and technology capacity Reinforcing invested scraper and hydraulic excavators to raise output to 100 products per year Strengthening repairing capacity spare accessories to meet the demand for quickly free repairing equipments, overcome limitations caused by difficult and long-lasting accessories supply Well and rational preparing the number of mining equipments, applying hiring mechanism in limiting period and warranting in type exceeding limiting period of mining repaired equipments of the same types to let customers keep their mind on maintaining sucessive production 56 3.2.3 Improvement of ernegy supply system Perfecting energy supply system in the direction of ensuring safety and economization Details as follows: - Maintaining 35/6 kV and 6/0,4 kV transformer stations at the Company Ensuring enough capacity provision (10,000 kVA) Changing management method, changing measuring scale from fabric to fabric 35 to boost economic efficiency - Completing the water circulation system Improving the effectiveness of recollecting water through circulation system, ensuring the reusing efficiency not less than 85% - Improving, upgrading the system of thermal kilns, ensuring the efficiency of using thermal, automatize thermal controlling process 3.2.4 People development strategy Making the most use of current human resource Improving working condition for technological and professional cadres Enhancing the effectiveness of using information technology advancement Continuing the arrangement and streamlining indirect staff of cadres, through it to reinforce the responsibility and effectiveness of each cadres Establishing a payment and bonus system for technical cadres to encourage good and high effective workers There must be mechanism for recruiting skillful young technicans and engineers to replace pre-retiring ones and those need to be reorganized Formulating, planning and training qualified staff of cadres working in designing, technology, consulting and technological assessment to meet the demand for the renovation of technology and equipments in modernized trend Formulating, planning and training economic and technological cadres having enough qualifications in managing investment projects, building projects and implementing national EPC projects Enhancing new training and retraining the staff of technical workers Focusing on high skilled workers in some areas in need such as hydraulic power, industrial electricity and CNC monitoring 57 Assessing, adjusting and ensuring resources: Depending on specific situations in each period, there must be reassessment of resources to ensure the implementation of established solutions In case of necessary, there must be flexible and reasonable adjustments Ensuring the resources and balancing the resources before deploying, particularly financial resources when implementing solutions of the strategy, the integrated growth strategy 3.2.5 Science technology development VMC should focus on technological development The development of science and technology is a compalsory demand to mechanical companies in general and VMC in particular The development of technology need to satisfy both sides: technological renovation associated with training and reorganizing scientific and technological staff of cadres VMC should concentrate on technological renovation according to these methods: improving and modernizing traditional technology, investigating new technology, importing and transferring new and modern technologies from other countries Renewing existing traditional technology to gradually raise it to modern advance level Combining the improvement of modernization with self-investigating to develop new technology to replace current applied old technology Gradually replacing old equipments with modern, highly accurate ones with CNC monitoring Boosting cooperation with domestic and oversea scientific centers, firms, and production units to grasp and acquire modern technologies Importing and transferring new and modern technologies from other countries are a breakthrough of development bringing about even changes in quality of technological factors Training and reorganizing scientific and technological staff of cadres by way establishing a strong staff of technological cadres to design synchronous equipments according to groups of products as thremoelectricity, hydroelectricity, cement, transportation, sorting-out, exploiting machines, etc To 2015, Boards and Departments of technological block need to have technological cadres in key sectors reach doctor qualification The 58 staff of cadres needs to be strong enough to allow VMC participate in EPC biding packages- the inevitable tend of the market VMC should organze some technological departments into researching centers designing and manufacturing high-quality equipments, having enough competitive capacity to the top countries in the region and qualified products to export to oversea market VMC must consider export as an important product development strategy of the enterprise Staffs have to enhance setting up capacity, usage of modern designing software to raise product quality and designing speed Investing to renew equipments and technology under selected orientation Investing in renewing and modernizing equipments and technology to raise capacity of manufacturing heavy mechanical, super-long and super-weight and highly accurate equipments under selected orientation and priority both in groups of products and financial resource Investing in renewing equipments and technologies to modernize repairing and assembling technologies of excavators, rotary bit drilling rigs, sorting-out equipments and wharfs VMC should give priority to renew technology under rational orientation, matching financial potential with development demand Firsly, VMC need renew equipments, technologies directly affect the development of VMC as thermal treatment, steel fire-grate laminating Secondly, renewing compound steel casting technology to set the fundamental for breakthrough in manufacturing equipments at VMC After that, improving and synchronizing manufacturing technologies of composed structures, giving priority to the use of advanced equipments as cutting, bending, CNC stamping, CO contacting or non-contacting welding 3.2.6 Environment protection and Industrial hygiency Improving industrial waste treatment system in 2010 Investing, improving industrial waste water treatment system, ensuring Environment protection, reusing water for production and increasing the rate of circulation to 90% in 2015 Replacing pollution-causing technology, giving priority in order to surface cleaning technology, covering ejecting, steel casting, and 59 pressing processing Increasing verdure cover, concretizing industrial ground, internal roads and improving microclimate environment 3.2.7 Labour protection and Ocupational safety Applying widely the advanced technology to eliminate the risk of loss of safety Ensuring environment and organize a scientific and rational working area Developing and implementing strictly the policies regarding regulations, procedures, technical rules and labor discipline Organizing training and full instructions regulations on occupational safety for employees, managers; complete preparations for the financial implement regarding occupational safety Implement proper, full mode, the regulations on working insurance; periodic medical examinations and medical care 3.2.8 Corporation Expanding cooperation and links could be good solution to implement integrated growth strategy On the basis of selected investment of technological equipments and technological development, VMC reinforces the expansion of cooperation and links with other enterprises to increase competitiveness in the market Speeding up cooperation with RemaG- Poland, OMZ-GO&T – Ukraine; ALTA– Czech; Producing AM50Z; EKG 8, 10; set of VINALTA Through this, meeting both domestic and exporting demands for the products and increasing market share of exported items, especially accessories and groups of accessories Expanding cooperation with IMSAT, NARIME Institutes, LILAMA, VINACONEX, VINAINCON Companies, etc to take part in big projects in forms of EPC such as thermal-electricity, mineral exploitation, selecting and refining in which VMC is assigned master bidder 3.2.9 Brand name Development VMC needs to have proper investment to build and develop trade mark and have specialized division for trademark management Registering owning trademark, brand name with Intellectual Property Department- Ministry of Science Technology and Environment Via Intellectual Property Department, 60 continuing registering the trademark to other countries (under Madrid Agreement) Attaching important to registering industrial property right for other forms of industrial properties, namely industrial patterns (to some high quality and stable products), inventions and useful solutions and so on which are still opened at present 3.2.10 Enhancing marketing activity Renewing the current activities of marketing division, supplementing market researching staff for Marketing Department to implement marketing function Investigating and identifying traditional products doing research to renew and raise the features and uses of traditional products Investigating and renew selling methods; gradually introducing and applying professional distribution to replace current direct selling method 3.2.11 Organization There must be a clear and detailed apparatus for implementing business strategy in which the leader must be the highest leader of VMC Building and approving plans, solutions and tasks (ensuring mental, financial and material resources) specifically before deploying The implementation must be successive, continuous and smooth ensuring growth but associated with stability, sustainability Timely checking and evaluating and drawing out experience lessons together with more specific and suitable proposals in each period 3.3 Proposal Together with implement solutions and carrying out the business strategy in the period of 2010-2015, VMC needs to propose to Vietnam Mine - Mineral Group to get the regime of managing inside sector, create the favorable conditions for implementing strategy Have the policies of rising inside cooperation (Vietnam Coal – Mineral Industry Group) to upholding capacity of designing new products from Research Institutes and Companies of mechanical manufacturing 61 Forming the regime of cooperation among inside units to raise the capacity and experience of implementing large projects or raise the competition with international contractors Renovating the thought in mechanical development, raising the specialization and cooperation among TKV units to upholding available strength to reduce refresh investment cost, avoid the repeat, and create the competitive products 3.4 Conclusion Developing the mechanical sector under modernization - industrialization direction is indispensable trend of developing countries In the context of the economy of Vietnam running by enterprise’s structure and integration higher and higher, the mechanical sectors need to build rapidly the policies as well as development strategies to meet the demands for growth In the coming years, the sector of coal and mineral in Vietnam will implement the activities of processing coal and other activities of electricity, bauxite-aluminum, iron ore, cement, and chemical substances together with producing devices serving mine exploitation deeply Group of coal and mineral also builds and exploits new electric plants, processes aluminum in West Highlands, Titan in central zone, metallurgy These plans require large manufacturing mass and device repairing so that it is necessary some investment projects of infrastructure Statistics and general analysis about business activities of VMC show the strong and weak points, advantages, challenges of VMC Therefore, VMC needs to define that above reality is both opportunity and challenge Leaders of company must renovate the thought of implementing strategies, raise specialization, cooperation among units, uphold the available strength to reducing refresh investment cost, and create competitive products in domestic and abroad markets 62 The business strategies from 2015 TO 2020 and vision 2020 of VMC that our researching group suggested was considered thought result basing on analysis statistics and references provided by VMC They are also built on science base of MBA program together with business knowledge in the field of mechanical manufacturing of members in the group of research They ensure the elements: inheriting selectively, advance for acquiring new thought in modern strategy managing; suitable with the key values of VMC as well as strategy orientation of sector and nation; stable development because of having both rapid growth measures and deep development investment With nine basic methods, report proposes some detail contents for VMC to ensure the task of implementing business strategies, supervising, and evaluating timely Since then VMC’s steering committee managers better the bussiness strategies and achieves their objects Because of limited time, the task of collecting primary statistics, controlling market face difficulties Members have little real experience in setting up business strategies for mechanical enterprises so that report has may shortcomings However, our report is conducted scientifically and seriouslly We believe that this report will play practical role for VMC in managing, developing enterprises 63 REFERENCES Vietnamese: 1- Pham Lan Anh (2000), Strategic management, Science and Technique publishing, pp 49 2- VMC (2009), General report of business activities of VMC; No 31195/BC - SXKD dated 1/10/2009 3- VMC (2009), Financial report of VMC in 2005, 2006, 2007, 2008 audited 4- VMC (2009), Financial report of VMC company in 2009, 3rd quarter/2009 which has not yet audited 5- Vietnamese Machinery Coal company (2006), Strategy of technique development 2006 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Hunger (1995), Strategic Management & Business Policy, Addison – Wesley Publishing company 65 [...]... (1) Choosing at least 10 factors reflecting competition status of the enterprise in the business sector, these factors are collected when analyzing external environment of the enterprise (market share, product quality, distribution capacity, brand name prestige, cost price of product unit, 14 production technology, advertising efficiency, production scale, internal financial capacity, R and D ability);... Negotiation capacity of suppliers is considered as threat when they force price raise or reduce demand for input quality that they supply for companies, decrease profit making of companies The existence of alternative products limits possibility of setting high price, profit making of companies 1.2.2 Enterprise’s internal environment It includes technological level, marketing, financial capacity, laborer,... opportunity to increase the price Strong competition between competitors in the sector can create big threat of profit making capacity If sectional competition is weak, companies will have opportunity to increase the price and get high profit Competition degree in the section depends much on sectional competition structure, demand condition and high barrier of leaving section 8 Negotiation capacity of... life Consumers gradually change from determining value on the basis of usage value to brand name of the product They increasingly tend to choose products having strong brand name (prestigious of quality, reliability) other than price 1.5 Implementing the strategy After choosing and deciding suitable strategy, administrator should communicate spirits of the strategy to the staff to understand every matter... to apply in practical conditions of the studied enterprise Contents of business strategy were built to ensure scientific nature and practical conformability of the enterprise Building business strategy for VMC from 2015 TO 2020, looking forward to 2020 to implement effectively in the current situation of VMC Besides, business strategy of VMC must be ensured to be suitable business strategy of Vietnam... institutions in that region If institutions have high stability, they 6 will create favorable conditions for business activity Enterprises should carefully analyze policies related to State management Anti-monopoly law, tax, labor law, competition, commerce regulation policy, protection barrier, consumer right protection regulations, priority sectors, etc all have influences on revenue, profit of enterprises... can change the possibility of creating value and income of the enterprise Four important factors of macro economic environment are growth rate of the economy, interest rate, exchange rate and inflation rate Social cultural factors create foundation of society and lead other changes Social changes such as awareness of health, labor diversification, and attitude of working quality create opportunities... enterprise lying in square VI, VIII, IX should harvest or eliminate 1.4 Choosing business strategy 1.4.1 Concentrated growth strategy Concentrated growth strategy means focusing on business in a business production area that has opportunity in the market currently Concentrated 17 growth strategy bases on the promotion of marketing activity or improvement of existing products and development of the market,... and threats for many business sectors Cultural interference of other cultures into nations will change consumption psychology, life style, create opportunities for some business sectors Technological changes continually increase It is both creative and destructive factor, both opportunity and threat The most important influence of technological change on height of barrier takes part in and re-makes sectional... strategies effectively? if there is lack of any resources for the implementation of the strategy, we must adjust two big issues related to resources quality which needs to be paid attention here” 21 Adjusting resources to improve quality and quantity of resources such as improving skills, training professional knowledge for human resources This adjusting aims implement business strategy effectively