Valuating & Adjusting Strategy For Construction Installation & Industrial Material Company Limited

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NATIONAL ECONOMICS UNIVERSITY SOLVAY BUSINESS SCHOOL
FINAL THESIS
Valuating & Adjusting Strategy
For Construction Installation & Industrial
Material Company Limited
Instructor: Associate Prof. Ngo Kim Thanh
Student: Duong Ngoc Khanh– MBM7
Hanoi, March 2010
Valuating & Adjusting Strategy for Cim Co., Ltd
Acknowledgements
I would like to express my deepest gratitude to my research supervisor, Mrs. Ngo Kim
Thanh, for her intensive support, valuable suggestions, guidance and encouragement
during the course of my study.
I would like to express my sincere gratitude to all of my teachers at Solvay Business
School and National Economics University for their teaching and guidance during my
course.
I would like to extend my thanks to the CEO of Cim Co., Ltd who trusted me and shared
his information and ideas about the company operating.
I am very thankful to all individuals for providing me with the necessary information and
supporting me with advice during the period of my data collection for this research study.
Last but not least, I would like to express my loving thanks to my parents, my wife and son
for their love and encouragement throughout my studying.
Written by Duong Ngoc Khanh MBM7
2
Valuating & Adjusting Strategy for Cim Co., Ltd
Table of content
Acknowledgements...............................................................................................2
Table of content....................................................................................................3
Executive Summary..............................................................................................4
Table 1: Corporate strategy formulation process ...........................................11

Table 3: SWOT/ TOWS matrix.........................................................................17
III.3. Opportunities and Threats.......................................................................26
Table 4: Strengths and Weaknesses of CIM CO., LTD...................................34
Table 6: SWOT/TOWS matrix of MSA VN.....................................................37
To choose Strategy applied for Cim, the author use pointing method with criteria
above. The scale point is 03 in which: 3 - Sure; 2 - Maybe; 1 - Not................38
Chapter 6: Conclusion, limitation and further researches..............................44
Appendix: Finance Report years 2002 - 2008
Business Result year 2002 -2008
List of Figure
Figures 1: Revenue of Cim co., Ltd from 2002 to 2009……………………… ...08
Figurers 2: Tariff on foil & rebar from 2001 to 2009…………………………....19
Figures 3: Imported quantity 2009……...………………………………………..23
Figures 4: Top 20 hot plate importers in 2008………………………..………….24
Figures 5: Price of Steel in 2007 (Source: Vietnam GSO)..……………………..25
Figures 6 : Revenue structure of Cim Co., Ltd……..……………………………29
Figures 7: Leverage & liquidity ratios of Cim Co., Ltd……………….…………30
Figures 8: Revenue & liabilities growth of Cim…………………………………34
Figures 9: ROE of Cim from 2002 to 2008…………….………………………..35
List of table:
Table 1: Corporate strategy formulation process…..…………………………….11
Table 2: SWOT model……………………………. …….………………………16
Table 3: Opportunities and Threats……………………………………………....17
Table 4: Strengths and Weaknesses of Cim., Ltd………………………………..34
Table 5: Threats and Weakness……… …………………………………………35
Table 6: SWOT/TOWS matrix of Cim, Ltd……………………………………. 37
Table 7: Choosing Strategy……………………………………………….……..38
Written by Duong Ngoc Khanh MBM7
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Valuating & Adjusting Strategy for Cim Co., Ltd

Table 8: BCG Matrix……..……………………………………………….……..39
Executive Summary
Steel industry takes a very important part for any economy, especially for Vietnam - a
developing country where begin to build its new cities, infrastructure, shipping, heavy
industries… According to statistics of Vietnam Steel Association, Vietnam nowadays has
discovered & located over 216 iron ore mines in which 13 mines with the capacity over 2
million tons distribute conceptually in the North. However, investments focus on easier &
more quickly making money field. Lacking of planning from Government from the
beginning, social resources has dropped foil & iron ore processing industries. In many
years from 2000 to 2007, domestic foil producers just supply only around 20% of demand.
This rate rose up to 50% in year 2008 with new factories but they themselves facing the
same problems of finished-good factories: lacking of input materia. This problem shall be
solved by developing iron ore exploiting & processing industry.
Because of lacking input material, the only solution of Vietnam steel industry is expected
to outside supply - exporting countries such as India, Russia, Korea, Japan, Australia,
South Africa and China, the biggest producer and consumer in the world. Input material
depending on foreigner resources, the market strongly affected by outside factors not only
international supply-demand but also policies of exporter countries.
Beside outside factors, Vietnamese market itself affected by internal conflicts between
infant policy & monopoly situation.
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Valuating & Adjusting Strategy for Cim Co., Ltd
With an unstable environment like above, Construction Installation & Industrial Material
Company Limited (Cim Co., Ltd) was born in 2002 with only one business line, it was
importing to distribute in domestic market. Its clients are domestic trading companies,
mechanic manufacturers, construction contractors, shipping manufacturers…etc. In eight
years, the company has amazing growth rate in revenue: 21 times with average growth rate
of 140%. The source of this hot growth came from dept. Until 2005, 100% revenue
belonged to trading activities. In this very year, Cim Co., Ltd has stood on the edge of

bankrupt because of a strongly changing in business environment. This hot growth
originates from what and why just in 04 operating years the company has faced to such
serious problem. Did the problem come from external or internal factor?
Firstly, this study aims to review company’s business, finance statement and organization,
to evaluate suitability of the current strategy in context of unstable & changing
environment.
Secondly, base on technical of Strategy Formulation process including SWOT and BCG
analysis this study shall give out the suggestions to adjust CIM Co., Ltd strategy in order to
improve Weakness to reduce Threats from changing environment and to take full
advantages of Strengths to catch Opportunities.

Chapter 1 – Introduction
I.1. Background
I.1.1 Industry overview
Steel is a strategic industry in Vietnam economy, which under early construction process.
Its history started in wartime with the first complex in Thai Nguyen province what had
small capacity and few kinds of products. In general, steel industry can be described
simply as a chain of products as the diagram bellow:
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Mines
Iron ore
Sifting
Refining
Mild foil
Rebar
Plates
V-shaped
Construction
Shipping

Mechanical
Shipping
Electric
transportation
Roll
Pipe
Roofing
Mechanical
End usingFinished - good
Semi-product End using