Luận văn MBA xây dựng chiến lược kinh doanh công ty sơn ICI

LUẬN VĂN THẠC SĨ – MBA

Xây dựng chiến lược kinh doanh công ty sơn ICI
THESIS TOPIC

TO BUILD THE BUSINESS STRATEGY FOR CO. ICI PAINT
VIETNAM

1


CONTENTS
LUẬN VĂN THẠC SĨ – MBA.........................................................................1
THESIS TOPIC.................................................................................................1
...........................................................................................................................1
CONTENTS......................................................................................................2
LIST OF TABLES............................................................................................5
LIST OF FIGURES...........................................................................................8
FOREWORD...................................................................................................11
Chapter 1. SOME THEORIES OF BUILDING THE BUSINESS
STRATEGY IN DECORATIVE PAINTS COMPANY................................13
1.1. Concepts, classifications and the roles of business strategy in the
company......................................................................................................13
1.1.1. The concept of business strategy in the Enterprise.......................13
1.1.2. Clasifying business strategy in the Enterprise...............................14
1.1.3. The role of business strategy.........................................................15
1.2. Content business strategy in the decorative paints company...............16
1.2.1. Strategic content for businesses in the decorative paints company
.................................................................................................................16
1.2.2. The contents of strategies for functional level in the decorative
paints industry.........................................................................................20

1.3. Grounds and procedures for building business strategy in the
decorative paints company..........................................................................22
1.3.1. Grounds to build business strategy in the decorative paints
company..................................................................................................22
1.3.2. Analytical methods of environmental to build strategies of
decorative paints company......................................................................23
Figure 1.1. SWOT / TOWS Matrix.................................................................25
Figure 1.2. BCG Matrix..................................................................................25
Figure 1.3. Porter's Five Forces Model...........................................................28
1.3.3. The Business strategicplanning process........................................30
Figure 1.4. The Business strategicplanning process........................................30
SUMMARY OF CHAPTER 1....................................................................33
CHATER 2. STATUS OF ACTIVITIES IN ICI PAINTS CO., LTD VIET
NAM................................................................................................................34
2.1. Overview of ICI Paints Co., Ltd Vietnam............................................34
2.1.1. Information of the company..........................................................34
Figure 2.1. Diagram of ICI Paint Vietnam Co., Ltd Organization System.....36

2


2.2. Analysis, and assessment of the external environment of the company
.....................................................................................................................36
2.2.1. Analysis of external environment of the company........................36
Table 2.1. Country Facts in 2009....................................................................36
Table 2.2. Economic Indicators.......................................................................37
Table 2.3. Effect on decorative paint market development.............................38
Table 2.4. Urban Migration.............................................................................41
Table 2.5. Drivers of Market Size...................................................................42
A change of households classifying criteria based on relative points

equivalent to their durables owned:.............................................................43
2.2.2. External assessment.......................................................................48
2.3. Analysis, and assessment of the internal environment of the company
.....................................................................................................................49
2.3.1. Internal analysis.............................................................................49
Table 2.6. Volume and Value Share of Vietnam Paints Market in 2009........50
Figure 2.2: ICI company Historical Growth...................................................51
Table 2.7. Financial Profit Summary..............................................................51
Table 2.8. Real labor wages in the company ICI............................................51
Table 2.9. Channel of Vietnam Paint market in 2009.....................................59
2.3.2. Internal assessment........................................................................59
SUMARY OF CHAPTER 2........................................................................60
CHAPTER 3. BUSINESS DEVELOPMENT STRATEGY FOR ICI PAINT
VIETNAM LTD., CO. IN THE PERIOD 2010-2015....................................61
3.1. Summary of bases for business development strategy proposal..........61
3.1.1. Vision, Mission and Strategic Intent of ICI Paint Vietnam..........61
3.1.2. Applying analysis models to propose business strategies for
Company.................................................................................................63
Table 3.1. ICI’s TOWS Matrix.......................................................................63
Figure 3.1. BCG with external paint products of ICI......................................66
Figure 3.2. BCG with internal paint products of ICI.......................................68
Figure 3.3. BCG of ICI with other products and services in the paint industry
.........................................................................................................................70
Figure 3.4. Porter's Five Forces Model analysis of ICI...................................71
3.2. Company business strategy proposal...................................................71
3.2.1. Enterprise business strategy proposal............................................71
3.2.2. Strategy proposal at functional levels of the Company.................75
Table 3.2. ICI’s financial targets.....................................................................82
3.3. Recommendation to the State and authorities......................................86
3.3.1. The State........................................................................................86

3.3.2.Authorities......................................................................................87

3


SUMARY OF CHAPTER 3........................................................................88
GENERAL CONCLUSION............................................................................89
LIST OF REFERENCE DOCUMENTS.........................................................90

4


LIST OF TABLES

LUẬN VĂN THẠC SĨ – MBA.........................................................................1
THESIS TOPIC.................................................................................................1
...........................................................................................................................1
CONTENTS......................................................................................................2
LIST OF TABLES............................................................................................5
LIST OF FIGURES...........................................................................................8
FOREWORD...................................................................................................11
Chapter 1. SOME THEORIES OF BUILDING THE BUSINESS
STRATEGY IN DECORATIVE PAINTS COMPANY................................13
1.1. Concepts, classifications and the roles of business strategy in the
company......................................................................................................13
1.1.1. The concept of business strategy in the Enterprise.......................13
1.1.2. Clasifying business strategy in the Enterprise...............................14
1.1.3. The role of business strategy.........................................................15
1.2. Content business strategy in the decorative paints company...............16
1.2.1. Strategic content for businesses in the decorative paints company

.................................................................................................................16
1.2.2. The contents of strategies for functional level in the decorative
paints industry.........................................................................................20
1.3. Grounds and procedures for building business strategy in the
decorative paints company..........................................................................22
1.3.1. Grounds to build business strategy in the decorative paints
company..................................................................................................22
1.3.2. Analytical methods of environmental to build strategies of
decorative paints company......................................................................23
Figure 1.1. SWOT / TOWS Matrix.................................................................25
Figure 1.2. BCG Matrix..................................................................................25
Figure 1.3. Porter's Five Forces Model...........................................................28
1.3.3. The Business strategicplanning process........................................30
Figure 1.4. The Business strategicplanning process........................................30
SUMMARY OF CHAPTER 1....................................................................33
CHATER 2. STATUS OF ACTIVITIES IN ICI PAINTS CO., LTD VIET
NAM................................................................................................................34
2.1. Overview of ICI Paints Co., Ltd Vietnam............................................34
2.1.1. Information of the company..........................................................34
Figure 2.1. Diagram of ICI Paint Vietnam Co., Ltd Organization System.....36
2.2. Analysis, and assessment of the external environment of the company
.....................................................................................................................36
5


2.2.1. Analysis of external environment of the company........................36
Table 2.1. Country Facts in 2009....................................................................36
Table 2.2. Economic Indicators.......................................................................37
Table 2.3. Effect on decorative paint market development.............................38
Table 2.4. Urban Migration.............................................................................41

Table 2.5. Drivers of Market Size...................................................................42
A change of households classifying criteria based on relative points
equivalent to their durables owned:.............................................................43
2.2.2. External assessment.......................................................................48
2.3. Analysis, and assessment of the internal environment of the company
.....................................................................................................................49
2.3.1. Internal analysis.............................................................................49
Table 2.6. Volume and Value Share of Vietnam Paints Market in 2009........50
Figure 2.2: ICI company Historical Growth...................................................51
Table 2.7. Financial Profit Summary..............................................................51
Table 2.8. Real labor wages in the company ICI............................................51
Table 2.9. Channel of Vietnam Paint market in 2009.....................................59
2.3.2. Internal assessment........................................................................59
SUMARY OF CHAPTER 2........................................................................60
CHAPTER 3. BUSINESS DEVELOPMENT STRATEGY FOR ICI PAINT
VIETNAM LTD., CO. IN THE PERIOD 2010-2015....................................61
3.1. Summary of bases for business development strategy proposal..........61
3.1.1. Vision, Mission and Strategic Intent of ICI Paint Vietnam..........61
3.1.2. Applying analysis models to propose business strategies for
Company.................................................................................................63
Table 3.1. ICI’s TOWS Matrix.......................................................................63
Figure 3.1. BCG with external paint products of ICI......................................66
Figure 3.2. BCG with internal paint products of ICI.......................................68
Figure 3.3. BCG of ICI with other products and services in the paint industry
.........................................................................................................................70
Figure 3.4. Porter's Five Forces Model analysis of ICI...................................71
3.2. Company business strategy proposal...................................................71
3.2.1. Enterprise business strategy proposal............................................71
3.2.2. Strategy proposal at functional levels of the Company.................75
Table 3.2. ICI’s financial targets.....................................................................82

3.3. Recommendation to the State and authorities......................................86
3.3.1. The State........................................................................................86
3.3.2.Authorities......................................................................................87
SUMARY OF CHAPTER 3........................................................................88
GENERAL CONCLUSION............................................................................89

6


LIST OF REFERENCE DOCUMENTS.........................................................90

7


LIST OF FIGURES

LUẬN VĂN THẠC SĨ – MBA.........................................................................1
THESIS TOPIC.................................................................................................1
...........................................................................................................................1
CONTENTS......................................................................................................2
LIST OF TABLES............................................................................................5
LIST OF FIGURES...........................................................................................8
FOREWORD...................................................................................................11
Chapter 1. SOME THEORIES OF BUILDING THE BUSINESS
STRATEGY IN DECORATIVE PAINTS COMPANY................................13
1.1. Concepts, classifications and the roles of business strategy in the
company......................................................................................................13
1.1.1. The concept of business strategy in the Enterprise.......................13
1.1.2. Clasifying business strategy in the Enterprise...............................14
1.1.3. The role of business strategy.........................................................15

1.2. Content business strategy in the decorative paints company...............16
1.2.1. Strategic content for businesses in the decorative paints company
.................................................................................................................16
1.2.2. The contents of strategies for functional level in the decorative
paints industry.........................................................................................20
1.3. Grounds and procedures for building business strategy in the
decorative paints company..........................................................................22
1.3.1. Grounds to build business strategy in the decorative paints
company..................................................................................................22
1.3.2. Analytical methods of environmental to build strategies of
decorative paints company......................................................................23
Figure 1.1. SWOT / TOWS Matrix.................................................................25
Figure 1.2. BCG Matrix..................................................................................25
Figure 1.3. Porter's Five Forces Model...........................................................28
1.3.3. The Business strategicplanning process........................................30
Figure 1.4. The Business strategicplanning process........................................30
SUMMARY OF CHAPTER 1....................................................................33
CHATER 2. STATUS OF ACTIVITIES IN ICI PAINTS CO., LTD VIET
NAM................................................................................................................34
2.1. Overview of ICI Paints Co., Ltd Vietnam............................................34
2.1.1. Information of the company..........................................................34
8


Figure 2.1. Diagram of ICI Paint Vietnam Co., Ltd Organization System.....36
2.2. Analysis, and assessment of the external environment of the company
.....................................................................................................................36
2.2.1. Analysis of external environment of the company........................36
Table 2.1. Country Facts in 2009....................................................................36
Table 2.2. Economic Indicators.......................................................................37

Table 2.3. Effect on decorative paint market development.............................38
Table 2.4. Urban Migration.............................................................................41
Table 2.5. Drivers of Market Size...................................................................42
A change of households classifying criteria based on relative points
equivalent to their durables owned:.............................................................43
2.2.2. External assessment.......................................................................48
2.3. Analysis, and assessment of the internal environment of the company
.....................................................................................................................49
2.3.1. Internal analysis.............................................................................49
Table 2.6. Volume and Value Share of Vietnam Paints Market in 2009........50
Figure 2.2: ICI company Historical Growth...................................................51
Table 2.7. Financial Profit Summary..............................................................51
Table 2.8. Real labor wages in the company ICI............................................51
Table 2.9. Channel of Vietnam Paint market in 2009.....................................59
2.3.2. Internal assessment........................................................................59
SUMARY OF CHAPTER 2........................................................................60
CHAPTER 3. BUSINESS DEVELOPMENT STRATEGY FOR ICI PAINT
VIETNAM LTD., CO. IN THE PERIOD 2010-2015....................................61
3.1. Summary of bases for business development strategy proposal..........61
3.1.1. Vision, Mission and Strategic Intent of ICI Paint Vietnam..........61
3.1.2. Applying analysis models to propose business strategies for
Company.................................................................................................63
Table 3.1. ICI’s TOWS Matrix.......................................................................63
Figure 3.1. BCG with external paint products of ICI......................................66
Figure 3.2. BCG with internal paint products of ICI.......................................68
Figure 3.3. BCG of ICI with other products and services in the paint industry
.........................................................................................................................70
Figure 3.4. Porter's Five Forces Model analysis of ICI...................................71
3.2. Company business strategy proposal...................................................71
3.2.1. Enterprise business strategy proposal............................................71

3.2.2. Strategy proposal at functional levels of the Company.................75
Table 3.2. ICI’s financial targets.....................................................................82
3.3. Recommendation to the State and authorities......................................86
3.3.1. The State........................................................................................86

9


3.3.2.Authorities......................................................................................87
SUMARY OF CHAPTER 3........................................................................88
GENERAL CONCLUSION............................................................................89
LIST OF REFERENCE DOCUMENTS.........................................................90

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FOREWORD

1. Neccesary of the research project
In the present context, when Vietnam is the member of many international
organizations and with the trend of integration of regional economies and in the
world, the business environment of enterprises will be expanded with new factors,
many opportunities that’s why challenges are more competitive fiercely.To
accommodate the business environment is changing, a successful business company
need to have capabilities to cope with many changing situations, to forecast the
trend of changes, to exploit the advantages, to know and promote the strengths and
minimise the weaknesses of the company as well as to appraise the competitors. To
do this, enterprises must be clearly outlined and built the own business strategy.
Business strategy is very important for the existence and development of
enterprises. The modern business management is focusing especially on the

management of the business stratergy.
ICI Paint Co., Ltd Vietnam has been established in 1995, is a member of the
Imperial Chemical Industry of England . In Vietnam, the decorative paints of ICI
company is a market leader in the North and the second market share in South and
Central. It is so critical to build the SMART business stratergy for the company to
maintain and to strengthen and to enhance its position in the context of so fierce
competitive environment. It will make the business successful.
As a National sales director of ICI Paint Co., Ltd in Vietnam, I understand an
enormous role of the building business strategy for company. After discussion with
members in the group 01.M05 and we all are agreed re to select the theme: "To
Build the business strategy for Co. ICI Paint Vietnam 2010-2015”.
2. Purpose of Research:
The purpose of the topic is to develop the smart business strategy for ICI Paint Co.,
Ltd Vietnam in the period 2010-2015 and have the right solutions to implement
effectively this strategy.

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3. Objective and scope of research:
Objective of research are the problem of business strategy and build business
strategies of company with the managerial points of view.
Scope of research is the business strategy in the field of decorative paints business.
Limited research is ICI Paints Co. Vietnam.
Mainly data have been focused on three in 2007, 2008 and 2009.
4. Methodological research:
With the logical and systematic approach, the topics are being used a combination
of research methods such as secondary research materials, survey, analysis,
comparison, methods specialists, methods model .
5. Structure exercises great:

Besides the introduction, list of references, the content of the topic are three
chapters:
Chapter 1.

Some theories of the building the business strategy in the decorative

paints company
Chapter 2. Current status business of ICI Paints Co., Ltd Vietnam
Chapter 3.

Solutions to build the business strategies for ICI Paint Co., Ltd

Vietnam for the period 2010-2015

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Chapter 1. SOME THEORIES OF BUILDING THE BUSINESS STRATEGY
IN DECORATIVE PAINTS COMPANY
1.1. Concepts, classifications and the roles of business strategy in the company
1.1.1. The concept of business strategy in the Enterprise
The vocabulary "strategy" is derived since a long time ago, before this term was
first used in the military.
Today, this term is used to spread and is introduced into most areas of economic,
political, social , especially in the range of macro and micro economic. Since the
appearance to date, both in theory and practice, exist in many concepts of strategy.
There are some key concepts which have been mentioned often in the books and
researchers that:
According to Michael Porter: "Strategy is the art of building the competitive
advantages for a firm defense “

According to Alfred Chandler: " Business strategy is to define the fundamental
goals and longterm goals for enterprises, to choose the policies and action plans to
allocate the resources to achieve the fundamental that goals.”
According to William J. Glueck: " Business strategy is the plans with uniformity,
comprehensiveness and coordination designed to ensure that the fundamental goals
of the business will be achieved.”
Thus, the term “strategy”of Enterprises is implied and reflected the goals of the
strategy, the time to do it, the process of decisionmaking for strategies, factors of
competitive environment, advantages and weaknesses of Enterprises in general and
for each activity in particular.
Striking features of the strategy is its orientation and define solutions, major policy
for key objectives . Along with the plans, the orientation is decisive. All the goals
are qualified
comprehensive

and linked together into a system of indicators reflecting a
production

and

business

activities

of

enterprises.

Therefore, building business strategy is the art of designing and organizing the

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means to achieve longterm goals of the enterprise in close relationship with the
business environment.
1.1.2. Clasifying business strategy in the Enterprise
According to different approaches, business strategies are classified into several
types, typically as follows:
1.1.2.1. Based on level business strategy
Business strategy for enterprises level : General strategy, identify longterm goals
and methods to achieve goals in each period. Strategies help to answer the question
for enterprises in which industry should be participated , the position of enterprise
in the business environment, and the roles of each business sector in the enterprise.
Business strategy level: the strategy to indentify how enterprises should compete
in each business sector to participate. Generally, enterprises are operating in various
business sectors are classified into the strategic business unit (SBU: strategic
business unit), or called as the member units, relatively independent of each other.
Each SBU are assumed that one or several business sectors which are
independentce of its own strategy but in unity with the overall strategy and interests
of the whole enterprise.
Strategies for functional level : strategy must indentify what level supports for
strategies of enterprises level , is the details of strategy at its level and related to
the functional operational management. They are the strategies in the functions such
as R & D, manufacturing, marketing, human resources, finance ... and must comply
and are consistent of strategies of enterprises level.
If a company is operating in a field of business then strategies of enterprise level
are coinciding with business strategy. It is conventional that in this business there
are two levels of business stratergies are enterprises level and functional one.
1.1.2.2. Based on the scope of the strategy
General business strategy: are refering to the most important questions, the most

extensive and longterm meaningful, deciding the vital questions to the enterprises,
the longterm guideline and longterm goals.

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Business strategy of each area: this strategic type is to solve the problems of
production to implement the general strategies such as product, marketing financial
stratergies and technology...
1.1.2.3. Based on market direction
Business strategy is divided into four groups:
Group I: Strategies are focused to solve a critical questions, not spread of resources
that focus on actions to be of decisive significance for production and business of
the enterprise.
Group II: Business strategy is based on comparative analysis and

relative

advantages of enterprises to be compared with other enterprises which are being
produced same products then to find out the own strengths to run the business.
Group III: Creative strategies of attacking and discovering new products and
services.
Group IV: Strategies are cultivated the possible capabilities of the surrounding to
find out key elements.
1.1.2.4. Base on the process strategy
Orientation strategy is including the orientation of major functions, tasks and
strategic objectives are base on the basis of judgments of environment and analysis
of internal enterprises. Orientation strategy is the fundamental projects of enterprise.
Action strategic is including the plan for action in different situations and
adjustment in the process of implementing strategy.

With the framework of this major exercise, we are following the first approach to
business strategy is "Based on the business strategy level.”
1.1.3. The role of business strategy
To help the enterprise to clearly see the direction in the future then the management
administrators to review and make decision which directions

should to drive

enterprises and when can achieve the goals.

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To help the management administrators are always initiative in any changes of the
environment, as well help them see clear opportunities and risks can be occured in
the current business to analyze, evaluate, forecast business environment in the
future. From there to drive enterprises for taking any advantages or opportunities,
and pushing back the risks to win.
To help enterprises to exploit and use up the resources, their potential. Thence
promote the maximum strengths of the enterprise for going up.
To help enterprises to allocate their resources in the business fields on time
reasonably.
To help enterprises to unite and have the engagement of employees and
management in implementing the objectives of enterprises. Thence to create internal
strengths .
To help enterprises to increase sales volume and labor productivity and increased
administrative efficiency, can avoid risks and prevent issues to be happened.
1.2. Content business strategy in the decorative paints company
Strategic systems in an enterprise

are including : Strategies for Enterprises,

Business strategy level and Strategy for functional level. The business of ICI is
decorative paints. ICI company have one business area then there are twolevels of
strategy are Business strategy level and Strategy for function level. (Strategic for
company level is coincided with Business strategy level).
1.2.1. Strategic content for businesses in the decorative paints company
ICI business with a particular field of decorative paints, with the approach of
administrative management then strategies for businesses are including: general
strategy (Grand Strategies), Adaptive Strategies and Competitive strategies.
1.2.1.1. Grand Strategies
Are general strategies of description of the overall ways which the business to
pursue. Decorative paints company need to choose overall appropriate strategies
are including: stable strategies, strategic growth, strategies to narrow or strategy
combination.

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Stable strategy is characterized by no significant changes. It means that enterprise
ago how is this still so now to continue to serve the group as before by providing
products and similar services, preserve market share, and maintain interest rates and
the withdrawal of the capital as in the past.
When the company leaders to pursue this strategy? When they see just pleased with
the results the company business. This strategy is appropriate to companies which
operate in the environment is relatively stable and little changed. However, It is not
very easy for any business (or individual) to define a strategy for its stability,
because it seems not much of the psychology and ambition of leaders are always to
expansion and increased growth. These administrators under this strategy can be
provided is not even advanced player, or an often part player.

Growth Strategy: strategy to seek growth in the activities of the business. This
strategy often involves increasing sales volume , increasing the number of workers
or increasing market share. This strategy is many leaders as they pursue that, " the
much more to the much better and the most to the best.” Growth Strategy can be
implemented by the ways: direct extension (additional investment of machines,
equipments, workshops …) mergers and takeovers (Mergers & Acquisitions);
jointventure; diversification business fields.
Narrow strategy: to seek for cutting off the scale and extent of diverse activities of
company.
Before the 1980s, noun "cut" or "narrow" easily cause loss of sympathy for small
companies wanting to admit they are pursuing this strategy (which is only referring
to ongoing development as an Art language is preferred). However, to the end of
1980, people had recognized a narrow really becoming a trend and strategic, and
manegement of the narrow was one of the problems

which were discovered

positive in the field of administration. There are many reasons why decorative
paints companies can look at this narrow strategy: fierce competition in both
domestically and internationally; Reduce government intervention; Mergers and

17


takeovers; The important invention technology makes the business as are scaled
with the number of employees less than ...
Mixture strategy: to pursue simultaneously two or more of the strategies stability,
growth, or shrink depending on the actual business situation.
1.2.1.2. Adaptative strategy
In the period of business, decorative paints enterprises need to determine position

and orientation competition in the industry how their participation. Therefore the
research the enterprises need to research and choose business strategies to their
suitable adaptation.
Theory of adaptative strategy by both Mr. Raymond Miles and Charles Snow had
been proponented . Firstly, Mr. Miles and Snow had classified into four types of
strategy: The defender (Defenders) who seeks (Prospectors), the analysis
(Analyzers )and the reactor (Reactors) .Thence they demonstrated that the success
achieved by only one of the three strategies if there is a joint strategy with the
environment of the enterprise, the internal structure and management processes. The
two men also showed that any companies follow the fourth will fail. Specifically in
decorative paints industry as follows:
The strategy "The defender" (Defenders): strategy to pursue stability by only
producing a limited paints products to be directed at a narrow piece of the overall
potential market.
Initially, the defender market have penetration by offering a range of products is
limited. Over time, the defender eventually cut out to own a piece of the market as a
their small autonomous region, and protecting it by the way that the competitors
reached it very difficult, often through plans like the standard economic
development and strengthen the prestige labels, quality of products, services,
economical due to the scale.
Thus, once find itself a suitable market segment, the defenders tend elusive the
development and going outside "the forbidden area" of them. This strategy is often
seen in the business with relatively health, stable and predictable. Defenders who

18


seek to grow by developing products within their paints and penetrating more new
markets.
The strategy "The Search" (Prospectors): to pursue innovation by searching and

exploring new products and new opportunities in the market.
Contrary to the defenders (who is going to find stability), the searcher to pursue
innovation. Strong points of the prospectors have found out and exploited new
products and opportunities in the market, so the list of items of products are broad
and often changes. Searchers often are the first ones into new markets.
Strategy of analysis "(Analyzers): to seek the ways for reducing risky minimum
by following the innovations of competitors, but only after the innovation has been
proved the successes.
The analysis has been made by simulation and imitating. Other paints companies
have been copied the ideological success of the prospectors. The thought of the
analyzers is "the next life but is the overwhelming".
The first leading paints products are characterized by a hard right on the design,
production, selling ... Thus, when competitors launch new products to market, they
research the situation, interview the consumers to see products that have any
advantages or disadvantages and what innovation must do. Then to start producing
better products , overcome the disadvantages of the competitors.
Thus, the analyzers have to be able to parody the new products of the key
prospectors , but at the same time it must maintain performance for the products and
markets of their stability. As a result, the analyzers often have marginal profit less
than the prospectors, but they have better productivity. The prospectors need to
have a larger marginal profit to offset the level of adventure that they incurred
expenses and other costs of their production.
Thus, if the prospector is successful by moving efficiently, then the success of
analyzer by doing both very careful way (hence, its new name is "the analyzer ").
The analyzer is successful by the "fast follower” or "the second mover.”

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The reactors: to have the typical of the type of decision is not stable and consistent.

This strategy often is occured when one of the three above the strategies are not
pursued properly. Overall, the response is incorrect response of situations, poor
results and not willing to pursue any strategies properbly.
1.2.1.3.Competitive strategies
According to Michael Porter's theories of competitive strategy can be seen that in
the decorative paints industry there is no company which can achieve at the average
by "is trying to do everything to everyone". Therefore, the management board need
to choose its business strategies are simultaneous of competitive advantages of its
business industry and competitive advantages of enterprise. For example, decorative
paints company has to choose from the following competitive advantages:
Strategy of leading prices: This strategy advocates compete by offering lower
prices for paints products than competitors
Unique strategy: This strategy focuses on providing a special service for a certain
narrow segments which the company has the advantages in the market.
Strategy of leading quality: This strategy aims to conquer the customers with
higher or highest quality of paints products than competitors.
Strategy of the leading to the difference: This strategy advocates the competitions
through the providing for our customers by differentiation of features and benifits
of the paints products comparing with competitors
1.2.2. The contents of strategies for functional level in the decorative paints
industry
Strategies of functional level (also called strategies for functions in company) These
strategies need to be determined what need to be done to supports for the genenal
business strategy .They are the specefic business strategies for the functions in the
company which have been related to general administration operations and the
general strategies of enterprise. Requirements of the strategy for funtional level are
subject to and consistent with overall business strategy. Goal is to create a frame or

20

diagram for direction , how to achieve setting objectives for each function in
company. After brief strategy for functions are execution plans.
In decorative paint industry it is focused to research strategies: Strategy of
manufacturing and prodution operation , marketing, strategy of research and
development (R & D), strategy of finance, strategy of human resources.
1.2.2.1 Strategy of manufacturing and production operation
Paints company need to have specific strategies in the management for production
with 08 contents : Forecasting production demand; product design and technology
selection; capacity planning ; Locate businesses; layout of production; resources
planning ; the level of production; production control system.
1.2.2.2 Marketing strategy
To make marketing strategies , Decorative paints company should proceed the
following steps: Identify target marketing  Market analysis Market
segmentation Target market Define and variables Strategy marketing – mix
policy implementation control and plan adjustment.
Strategy of Marketing Mix is the core content of the marketing strategy, including
the 4Ps : Product, Price, Place, Promotion.
1.2.2.3. Strategy of Research and Development
Content of research and development in the decorative paints company to explore
the products, services and processes and then apply that knowledge to create
products, services and new process , is calculated to improve to meet the needs of
customers or the market better.
R & D is always the objective and important function of the advanced company,
multinational companies in the world. "A decorative paints company want to be the
leader in the market there is no other choice that the company must always get a
ahead of competitors to develop products and technologies to meet customer needs
with affordable and costoptimized "
1.2.2.4. Strategic Finance
Questions that paints company need to be interested are priority:

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Firstly, cash flow = surplus funds of company. The cash flow depends on the
cycle life of products and paints business industry.
Secondly, so good credit = current low debt which banks and investors see a
promising the good business. A good credit allows company to expand the use of
the loan.
Third, Flexible Finance = ability to meet financial needs are not anticipating.
1.2.2.6. Strategy of human resources
Human resources are the core for the sustainable development and successes of
comapany.Therefore, Paints company should develop appropriate strategies of
human recources management , focused on six contents

1. human resource

planning; 2. recruitment human resources; 3. layout human use; 4. personnel
training and delelopment; 5. evaluate human resources 6. human offer policy
1.3. Grounds and procedures for building business strategy in the decorative
paints company
1.3.1. Grounds to build business strategy in the decorative paints company
Strategic selection must be based on the basic grounds:
The first, the advantages of the compan through analysis of the facts:
The strengths or relative position of the company compared to competitors.
Pursuant to the profit / high capital investment in the future of the paints industry.
Analysis of the value chain of customers, company and competitors.
The second, goals: Strategies have been selected for achieving goals like?
The thirth, resources: financial, human resources, facilities engineering,
technology...

The fouth, qualifications and capabilities of the company: depend on the quality
and level of capability, the ability and competencies of company that choose the
appropriate strategy.
The fifth, the legal basis and the reaction of stakeholders: suppliers, alliance
partners and customers.
The sixth, investment opportunities.

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In the process of building strategies, the magement administrator must use models
of environmental analysis associated with each company to help them make
appropriate decisions.
1.3.2. Analytical methods of environmental to build strategies of decorative paints
company
1.3.2.1. SWOT analysis
A scan of the internal and external environment is an important part of the strategic
planning process in the Paint firms. Environmental factors internal to the firm
usually can be chiến lượcassified as strengths (S) or weaknesses (W), and those
external to the firm can be chiến lượcassified as opportunities (O) or threats (T).
Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm's
resources and capabilities to the competitive environment in which it operates. As
such, it is instrumental in strategy formulation and selection. The following diagram
shows how a SWOT analysis fits into an environmental scan:
a) SWOT Analysis Framework
Environmental Scan
/
\
Internal Analysis

External Analysis
/ \
/
\
Strengths Weaknesses Opportunities Threats
|
SWOT Matrix
Strengths: A Paint firm's strengths are its resources and capabilities that can be
used as a basis for developing a competitive advantage. Examples of such strengths
inchiến lượcude: patents; strong brand names; good reputation among customers;
cost advantages from proprietary knowhow; exchiến lượcusive access to high grade
natural resources; favorable access to distribution networks…
Weaknesses: The absence of certain strengths may be viewed as a weakness. For
example, each of the following may be considered weaknesses: lack of patent

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protection; a weak brand name; poor reputation among customers; high cost
structure; lack of access to the best natural resources; lack of access to key
distribution channels…
In some cases, a weakness may be the flip side of a strength. Take the case in which
a Paint firm has a large amount of manufacturing capacity. While this capacity may
be considered a strength that competitors do not share, it also may be a considered a
weakness if the large investment in manufacturing capacity prevents the firm from
reacting quickly to changes in the strategic environment.
Opportunities: The external environmental analysis may reveal certain new
opportunities for profit and growth. Some examples of such opportunities inchiến
lượcude: an unfulfilled customer need; arrival of new technologies; loosening of
regulations; removal of international trade barriers…

Threats: Changes in the external environmental also may present threats to the
firm. Some examples of such threats inchiến lượcude: shifts in consumer tastes
away from the firm's products; emergence of substitute products; new regulations;
increased trade barriers…
b) The SWOT Matrix
A firm should not necessarily pursue the more lucrative opportunities. Rather, it
may have a better chance at developing a competitive advantage by identifying a fit
between the firm's strengths and upcoming opportunities. In some cases, the firm
can overcome a weakness in order to prepare itself to pursue a compelling
opportunity.
To develop strategies that take into account the SWOT profile, a matrix of these
factors can be constructed. The SWOT matrix (also known as a TOWS Matrix) is
shown below:

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Figure 1.1. SWOT / TOWS Matrix
• SO strategies pursue opportunities that are a good fit to the company's
strengths.
• WO strategies overcome weaknesses to pursue opportunities.
• ST strategies identify ways that the firm can use its strengths to reduce its
vulnerability to external threats.
• WT strategies establish a defensive plan to prevent the firm's weaknesses from
making it highly susceptible to external threats.
1.3.2.2. BCG Matrix analysis

Figure 1.2. BCG Matrix
Base on this approach model, it has been seen that there are the products which
have been showing the potential ones in ICI. Among of them there are some

products “ less opportunity or non opportunity” to be existed. If company continues
to maintain the production then it may threaten the existence of the enterprise . The
questions are to be raised what and how company should do with these products ?
Since then, based on market share (high, low) of each type of product and growth

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