Luận văn thạc sĩ lựa chọn chiến lược tối ưu cho công ty CP vận tải toàn cầu

Thesis MBA

SELECTING THE OPTIMAL STRATEGY FOR GLOBAL
LOGISTICS COMPANY

1


COMMITTMENT
We commit that this capstone project report is our actual work of research on strategy
of Global Logistics Service Co ,ltd. From experience of the members in the group and
one member who used to work at the Global Logistics Service Co.,ltd. Data and result
mentioned in the capstone project report are true. The taken solutions contain many
features of learning, rise from actual experience and have not ever been public.
MAKERS

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TABLE OF CONTENTS
COMPETITIVE STRATEGY FOR GLOBAL LOGISTICS SERVICES
COMPANY LIMITED STAGE 2010-2014
Page
Cover page
Acknowledgements

i

Committment

ii

Table of contents

iii

List of abbriviated words

iv

List of spreadsheet

v

List of figures
CHAPTER 1. OVERVIEW OF THEORIES IN SELECTING AND

vi
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BUILDING BESINESS STRATEGY
1.1.OVERVIEW OF CORPRORATE STRATEGY

12

1.1.1. Concept

12

1.1.2. Classification of corporate strategy

14

1.1.3. Factors affacting the corporate strategy

16

1.1.3.1.External environment

16

1.1.3.2.Internal environment

19

1.2. STRATEGY FORMATION AND BUILDING

20

1.2.1. Analysis of Strength-Weakness-Opportunity-Threat (matrix

20

SWOT)
1.2.1.1.Basic factors of SWOT matric

21

1.2.1.2. Strategy development procedure base on SWOT

21

analysis method
1.2.2. Role of coporate stratey
CHAPTER 2. OVERVIEW OF CURRENT SITUATION IN GLOBAL
LOGISTICS COMPANY IN THE STAGE OF 2007 – 2009

3

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2.1. INTRODUCTION TO REALITY OF THE GLOBAL LOGISTICS

26

2.1.1. History of formation and development of the Global Logistics

26

2.1.2. The system of organization - management - operation at the

26

company
2.1.3. Technical - material facilties of the company

28

2.1.4. Business scope

28

2.1.5. Customers

30

2.2. ANALYSIS OF EXTERNAL ENVIRONMENT OF GLOBAL

30

LOGISTICS
2.2.1.Marco enviroment

30

2.2.2. Micro enviroment

43

2.2.3. Evaluation matrices

45

2.3. ANALYZE THE INNER ENVIRONMENT OF GLOBAL

53

LOGISTICS COMPANY.
2.3.1. Internal factor

53

2.3.2. Maxtrix evaluating internal factors of Global logistics company

56

2.4 ACTUALITY OF CONSTRUCTION OF STRATRGY OF GLOBAL

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LOGISTICS IN THE STAGE 207-2009.
2.5. RESULTS FROM IMPLEMANT OF THE DEVELOPMENT

58

STRATRGIES.
2.6 GENERAL EVALUATION ON ACTUALITY OF

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CONSTRUCTION OF STRATEGIES OF GLOBAL LOGISTIC
2.6.1. Achievements

61

2.6.2. Drawbacks
CHAPTER 3. SELECTING THE OPTIMAL STRATEGY FOR
GLOBAL LOGISTICS COMPANY IN 2010-2014
3.1.ORIENTATION AND OBLIGATIONS FOR THE COMPANY’S
DEVELOPMENT FOR PHASE OF 2010 - 2014

3.1.1.Orientation of the company for phase of 2010-2014

4

61
63
63
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3.1.2. The development obligations of the company for phase of 2010-2014

64

3.2.ANALYSIS OF EXTERNAL ENVIRONMENT OF GLOBAL
LOGISTICS

64

3.2.1.Matrix analyzing the strength – weakness, opportunity – threat

64

(SWOT) for Global Logistics,
3.2.2.Choosing the development strategy for global logistics

65

company in stage 2010 –2014
3.3 SOME SOLUTIONS FOR CARRYING OUT THE DEVELOPMENT

STRATEGY FOR GLOBAL LOGISTICS COMPANY IN PERIOD
2010 – 2014
3.3.1 Solution group on operating procedure

69

3.3.2. Market solution group.

71

3.3.3 Customer solution groups

71

3.3.4 Human resource solution groups for development.

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CONCLUSION
REFERENCES

5


REFERENCES LIST OF ABBREVIATIONS
3PL

Third-party logistics

ADSL

Asymetric Digital Subcriber Line

ASN

Adavance Shipping Notice

BMI

Business Monitor International Ltd

CBM

Cubic Meter

CFS

Container Freight Station

CL

Contract Logistics

EDI

Electronic Data Interchange

f

Forecast

FDI

Foreign Direct Investment

FF

Freight Forwading

FMCG

Fast Moving Consumer Goods

FOB

Free On Board

GDP

Gross Domestics Product

GFF

Global Freight Forwarding

ICD

Inland Clearance Depot

ILMS

Inbound Logistics Management System

JBIC

Japan Bank for International Corporation

JIT

Just In Time

NVOCC Non – Vessel Operarting Common Carrier
R&D

Research and Development

SDR

Special Drawing Right

SWOT

Strength-Weakness-Opportunity-Threat

TEU

Twenty – Equivalent Unit

TMS

Transporation Management System

USD

United States Dollar

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VICT

Vietnam International Container Terminal: In Logistics Development Joint
Venture Company Number 1.

VIFFAS Vietnam Freight Forwarders Association
VNĐ

Vietnam Dong

WMS

Warehouse Management System

WTO

World Trade Organisation

XML

The Extensive Markup Language

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LIST OF TABLES AND FIGURES
Table 1.1: Strategic viewpoints of Porter
Table 1.2: Common points of active and inactive strategies
Figure 1.3: SWOT-based strategy development procedure
Table 1.4: Logistics services
Table 1.5: Governing law on transport
Table 1.6: Capital investment structure for sectors of national economy.
Table 1.7: Reality of exploiting terminals
Table 1.8: Information system of some seaports of Vietnam
Table 1.9 : Assessment of service infrastructures intended for logistics activities
Table 2: Vietnamese, local and global logistics market base on value and growth rate
Figure 2.1 : Outsourcing percentage base on industry and form of company
Table 2.2 : Matrix of external factors
Table 2.3: Operation procedure
Table 2.4 : Operation results of the company
Table 2.5: Matrix of internal factors.
Table 2.6: SWOT matrix of global logistics
Table 2.7: Quantitive assessment of endogenous growth strategies.

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INTRODUCTION
1. Materials
Management of the company strategy is a continuous and active process. Thus,
revaluation of human resource and core capacity of the company will assist it to keep

and its comparative advantages when the environment changes.
Being a member of the Global Group and having just been established for three years,
with its effort, the company has reached some remarkable points as follows: its
revenue reaches USD 2 million, the headquarter in Hanoi in initial time, presently, the
company has develop a system from Lao Cai, Lang Son, Hai Phong, Thanh Hoa,
Quang Binh and Ho Chi Minh City.
To achieve some results above, the company has had solid steps in the initial strategy
suitable with development and renovation of the market. However, the author
remarked that management of the company strategy brings the tactical, short-term and
interrupted features.
Thus, construction, execution and control of long-term strategy have become
necessary for the company, because:
•

Maintain growth speed and find out new model of development in stage of 2010 –
2014.

•

Expanding domestic and oversee market with quick speed

•

Being suitable with change of the open policies of Vietnam for logistics service.

•

Supporting the company in process of investment decision-making to keep its
competitive position in long term.

Therefore, the material is that it is necessary to establish a long-term strategy for the
company to maintain its current advantage and catch chances from the Vietnam
logistics market.

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2. Target and research task
Orienting goal of the thesis is to construct and take a strategy to the company in the
next stage of 2010 - 2014.
To implement this task, the important step of the thesis is construction and selection of
a standard model of strategy administration for analysis. Based on the model, the
thesis will evaluate advantages and disadvantages in construction process of the
company strategy in the stage of 2007 – 2009. Finally, the thesis must take proposal of
development strategy in long-term for the global Logistics in the next stage of 2010 –
2014 on the standard model and results from the actuality of the enterprise.
3. Object and range of research
Object of research of the thesis is to construct a strategy for the Global logistics
•

Concentrating only into the strategy in stead of the whole strategy-management
process including construction, implement and control of the strategy.

•

Only concentrating into the Global logistics in stead of concentrating into the
whole Global group

•

On time, it is to evaluate the strategy actuality in the stage of 2007-2009 and
propose development strategy in time of 2010 – 2014

4. Method of research
The thesis uses the following methods to propose a development strategy of the
company.
•

The system method: the thesis uses this method to evaluate all factors which are
able to influence the strategy of the company. By this method, evaluating the
factors to influence the strategy of the company includes internal and external
markets of the company.

•

The analysis method of secondary data: is used to research reasoning basis to lay
the foundation for establishment of the development strategy of the company.

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Moreover, this method is used to research actuality of the strategy set-up of the
company to determine disadvantages and advantages.
•

Quantitative method: is used to select and make decision on the development
strategies in the stage of 2010 – 2014. By marking (quantify) the strategy, this
method supports selection of the best strategy in the most suitable conditions.

•

Professional method: this method is used to forecast development trends of the
Vietnam logistics market in next years. Besides, the thesis uses methods of
strategic analysis including SWOT matrix, QSPM quantitative matrix.

5. Scientific and real meanings of the subject
* Scientific meaning:

the thesis has filtered and selected a model of strategic

development, which is proposed to use by most companies and researchers. Besides, it
supplements the source of the scientific documentation and topics of logistics
management, administration of supply chain and management of strategies.
* Meaning of reality: achievement of the thesis is the model of development strategy
of the company in the stage of 2010 – 2014. It means that the thesis also provides
“guideline” for the company on the way of stable development. Additionally, the thesis
takes some deficient competences in which the company needs to invest to keep the
high speed of growth.
6. Limitations and salient features of the thesis
* Limitations: the thesis only takes the proposed model and solution for the
development strategy of the company. It does mean that execution according to the
proposed strategy of the company will certainly bring about success for the company.
Hence, the proposed strategy should have time to execute, receive feedback and
adjust. In addition, the matrixes of quantitative evaluation show subjective will of the
generator because the method is based on the generator’s experience and opinions of

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the experts.

* Key points: Because the thesis generator has been in the logistics sector for ten years
and he is a manager of the company, he understands all issues in the company. For this
reason, the thesis holds the high reality.
7. Structure of the thesis
The thesis is divided into three main parts, structured into three chapters as follows:
CHAPTER 1: OVERVIEW OF THERIES IN SELECTING AND BUILDING
BESINESS STRATEGY
CHAPTER 2. OVERVIEW OF CURRENT SITUATION IN GLOBAL LOGISTICS
COMPANY IN THE STAGE OF 2007 – 2009
CHAPTER 3. SELECTING THE OPTIMAL STRATEGY FOR GLOBAL
LOGISTICS COMPANY IN 2010-2014

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CHAPTER 1
OVERVIEW OF THERIES IN SELECTING AND BUILDING BESINESS
STRATEGY
1.1. OVERVIEW OF CORPORATE STRATEGY
1.1.1. Concept:
Michael.E.Porter, a professor of Harvard Business School on competitive strategy,
says: “There’s hardly an agreement in what strategy is, but how a company builds a
strategy.” This proves that the concept “strategy” has different connotations. However,
some of definitions of corporate strategy made by scholars from which features of
corporate strategy result may be taken into account.
According to Feurer and Chaharbaghi, strategy derives from the Greek word
“strategia”, which means art of war. Accordingly, a strategy is an important plan
targeted at vanquishing the enemy. In achieving this objective, the strategy also
recommends how to use existing resources most effectively. Over time, this concept is
developed and applied to business activities

According to Chandler (1962), a strategy is to define basic objectives of a company
and to pick up the action method, including allocation of necessary resources so as to
achieve these objectives.
Andrew (1971) thinks that strategy is a procedure in which sound decisions are made
based on the appropriateness of corporate resources over opportunities available
outside the company.

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According to an article “What is strategy?” posted in Harvard Business Review
Michael E. Porter (1996) expresses his viewpoint concerning strategy practice using
comparison with classical viewpoint of strategy as below:
Table 1.1: Porter’s viewpoint of strategy
Strategy model used over decades

Sustainable competitive advantage

• An ideal competitive position within a

• Dominant competitive position
• Activities supports strategy

sector

• Making a comparison about all activities of • Selections and exchanges must be
the company and finding out the best

obvious compared to the

activity

competitor

• Increasing outsourcing and corporation so
as to achieve the effectiveness.

• Long-term advantage based on the
entire operation of company in

• Advantages based on successful factors,
key resources, and core competency.

lieu of dependence on a
component.

• Flexible and well responded to markets.

• Required operating effectiveness.

Source: Michael.E.Porter, What is Strategy? Harvard Business Review, Nov-Dec
1996.
According to the comparison above, Porter thinks that strategy is a creation of
compatibility between activities of the company. If this compatibility is unavailable,
there is no distinct strategy and it is hard to keep the competitive advantage alive.
Using the definitions above, it can be deduced that the strategy of the company is a
general entity of decisions and activities relating to the selection of means and
allocation of resources so as to achieve the objective. In a competitive environment, the

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key objective of the company is to acquire a strategic position better than that of the
competitor.
To achieve this, the company must create a harmony for the entire operation so as to
build and maintain a long-term competitiveness.
1.1.2. Classification of corporate strategy
Because there are different definitions of strategy, there are also different methods of
classification based on different criteria:
Firstly, classification is based on organization and structure of the company. There are
three types:
•

Business strategy (so called functional strategy). This strategy is designed to
identify specific capacities and competitive advantage of the company over its
competitors in the same sector, of the same group of products/market.

•

This strategy is built to select, assess, develop/withdraw from a group of different
business units. Corporate strategy is greater than business strategy in terms of
magnitude.

•

Aggregate strategy. This strategy is built using activities of the company and their
exchanges with exterior environments for the purpose of controlling market or
changing results of environments through a network of organizations in which the
company participate [Fombrun and et al,1983, p.49]

Secondly, classification is based on process. There are two types:
•

Proposed strategy is a set of document containing information about things that
the company wants to do to achieve the proposed objective [Lam,1998,p.29].
Normally, proposed strategies comprise plans and policies.

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•

Realized strategy is a strategy expected to be realized during operation of the
company. Proposed strategies not to be realized are called unrealized strategy
[Lam,1998,p.30]

During transition between proposed strategy and realized strategy, there are a few new
emergent strategies due to change in environmental conditions called emergent
strategies.
Thirdly, classification is based on selection of strategy. There are two types:
•

Active strategy. Strategies may help the company win in the competition thanks
to the leadership in the market.

•

Passive strategy. Strategies follow leading companies in the market.
Table 1.2: Things in common of active and passive strategies
Active strategy

Passive strategy

o Horizontal merger

o Withdrawal from business lines

o Market development

o Payment for technology

o Market diversification

o Employing manpower

o Development of new business line o Joint venture
o Development of new product

o Expansion of production line

o Product diversification

o Changing/remodeling products

o Production automation

o Increasing quality of product and service

o Staff training

o Outsourssing

Source : Pun and et al, Determinants of manufacturing strategy formulations: a
longitudinal study in Hong Kong, Technovation, Vol 24 No.2

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There are many methods of classifications upon approaches of researchers and
practicers. These methods are just relative and mutually supplemental. In fact,
boundaries between strategies classified are unobvious.
1.1.3. Factors affecting corporate strategy
Factors affect the management of corporate strategy, including strategy design, strategy
development, strategy control and adjustment. Accordingly, such factors are broken
into two groups: factors and factors outside and inside the company.
1.1.3.1. External environment
This is the group of factors providing opportunities and threats encountered by the
company in competitive conditions. Factors outside the company are broken into two
large groups, including macro-environment and micro-environment.
Macro-environment: including factors originating from the outside of the company and
affecting almost all operations of the company. Factors of a common environment are
(1) economic factor, (2) social factor, (3) legal and political factor, (4) technological
factor, and (5) ecological and economic factors.
(1) Economic factors deal with nature and orientation of development of an economy
in which the company operates. In fact, companies are often interested in such
economic factors through economic variables such as: GNP growth tendency,
inflation rate, basic interest rate, readiness of credit system, disposable income
and consumption tendency of people.
(2) Social factors deal with believes, values, attitudes, viewpoints, and life styles of
people in a society where the company operates.

(3) Legal and political factors: During creation of strategy, companies often make an
assessment about orientation and stability of the legal and political system in
which companies operate. These factors comprise regulations to which companies

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must comply, including fair trade, anti-monopoly, tax program, minimum salary,
regulations on environment and prices, and some regulations aimed at labor,
consumer, people and environment protection.
(4) Technological factors: Quick change of technology may exert a great influence
over industries in which companies operate. Technologies may give possibilities
of creation of new products or improvement of existing products. Particularly,
breakthrough technologies may result in company creating a new market or
shortening life cycles of production equipments.
(5) Economic-ecological

factors

represent

interaction

between

ecological

environment and business. Ecological environment is defined a summary of
relationships between human beings and animals; air, soil, and water are life
supports. Now, companies must consider tham as external factors affecting their

business activities. Ecological issues are global warming, biodiversity
disappearance, air, water, and soil pollutions.
Micro-environment: Micro-environment proposed by Michael E. Porter, a professor of
Harvard Business School, becomes popular for strategy planners of companies.
According to Michael E. Porter, there are five factors creating competition in the same
sector, including: (1) appearance of a new competitor, (2) strength of provider, (3)
strength of consumers, (4) appearance of alternative product, and (5) sector
competitors.
(1) Appearance of new competitors: competitors penetrating markets usually create
new competitive possibilities when they acquire existing shares. Normally, when
entering into a sector, new competitors encounter certain barriers, namely scale
advantage, production distinction, capital demand, cost advantage, possibility of
access to distribution system, and specific regulations of the Government.
(2) Strength of provider: provider may influence a specific sector through increased
price or decreased quality of provided service/commodity. Strength of provider

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may be achieved by means of monopoly in a sector, uniqueness of a product, or
high transition cost of provider.
(3) Strength of customer: customers often demand on decreased price, increased
quality of service, using other competitors for alternative if necessary. Strength of
customer may be achieved by means of great quantity of goods, not much
distinction in products.
(4) Appearance of alternative product: alternative products may constrain the
potential of a sector or profit of a sector.
(5) Sector competitors: competition in a sector may occur when competitors use their
strengths to attract customers. Techniques often used are competition in price,
product introduction, and advertisement and marketing programs. Competition

level of a sector depends on factors such as the number of competitors, growth
speed of such sector, high fixed cost, or fragile products, “standardization” level
of products, and barriers of such sector.
In fact, when analyzing sector environment and competitive environment, strategists
often give answers to four following questions: (1) What is the scope of the sector in
which the company operates? (2) What is sector structure? (3) Who are competitors?
(4) What are standards to identify competitors?
External environment is broken into two large groups, namely micro-environment and
macro-environment. In each environment, there are several factors making a direct
impact on corporate strategy. In fact, these factors always change and mutually closely
interact. In general, these factors may provide opportunities as well as risks possibly
encountered by companies. As a consequence, assessment of external environment is a
part of strategy formation and assists companies in making full use of opportunities
and reducing risks resulting from such environment.
1.1.3.2. Internal environment

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Including factors within the control of company. Assessment of internal environment
often presents both strengths and weaknesses of a certain company. Factors constitute
an internal environment, including:
•

Production/demonstration/action: including activities making input fuel and
materials output commodities and services. Normally, this function includes
factors such as process, capacity, inventories, direct labors, and quality. This is
the core function of an enterprise, so strategists put priority on other activities.

•

Marketing and sales/business development: including activities from researching
and defining demands of customers to satisfying defined demands of customers
through products, prices, distribution, and promotion.

•

Finance: including activities relating to decisions about investment, capital
structure, dividend payments. Financial activities not only relates to the existence
and

development

of

an

enterprise

but

influences

external

credit

organizations/investors of such enterprise.
•

Human resources: including activities such us recruitment, interview, tests,
selection, orientation, training, development, evaluation, encouragement intended
for employees. Activities in human resources play a key role in strategy
implementation.

•

Information system: information links business functions together and provide a
foundation for all managerial decisions. Information system is regarded as a
foundation for all organizations. Its aim is to improve activities of a company
through improved quality of managerial decisions.

•

Management: Including activities from planning, organization, implementation to
control of the company. Now, management play a big role in formation of
strategy and competitive position of the company.

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In addition to that, corporate culture has a growing effect on corporate strategy.
Accordingly, the stronger corporate culture is, the more cultural factors influence
creation of strategic actions. These factors may direct strategy from time to time.
There are numerous factors affecting corporate strategy. In a quickly changing context
at the present, continuous reassessment of strategies when these factors are available
have a significant meaning to strategic success of the company.
1.2. STRATEGY FORMATION AND CREATION PROCESS
Dependent on viewpoints of corporate strategy, there are different strategy creation
processes. At the moment, there are several popular strategy approaches such as

SWOT matrix analysis, analysis of value chain… The SWOT matrix analysis is more
generalized than other approaches because analysis of value chain only specializes in
external factors and competitive strategy creation. However, analysis of value chain is
more modern than SWOT matrix when competition becomes more and more vigorous
in markets.
1.2.1. Analysis of strength-weakness-opportunity-threat matrix (SWOT matrix)
This is a traditional approach, which is still useful and popular to strategy managers.
This approach is based on the project of Andrew and Christiansen made in 1960s at
Havard Business School. Through one-way approach method, these two authors
proposed a series of steps in order, including information collection and assessment,
strategy development, assessment, selection, and execution of strategy. The simple idea
of this approach is to find a way to combine the capacity of an organization with
opportunities from the outside in competitive context. The analysis allows companies
have a comprehensive view over the existing situation of strategy. Such combination

21


will result in companies making full use of its strengths and opportunities and reducing
weaknesses and risks.
1.2.1.1. Basic factors of SWOT matrix
Including four key factors: strength, weakness, opportunity, and threat.
•

Opportunity: Including conditions in operating environment having good
influences over the company. Main tendencies always create opportunities for the
company. Besides, assessment of markets that the company has not pursued yet,
changes in competition and law, changes in technology and relationships with
providers and customers also create opportunities for the company.

•

Threat: Including conditions in operating environment having bad influences over
the company. Market penetration of competitors, decrease in market growth,
increase in negotiation power of providers and customers, changes in technology,
and new regulations may be threats to the company.

•

Strength: Including resources or capacities managed or available for the company
to make advantages over those of competitors in meeting demands of customers.

•

Weakness: Are limits or shortages of resources or capacities of the company in
relationships with its competitors, which make disadvantages for the company in
meeting demands of customers.

1.2.1.2. Strategy creation process based on SWOT analysis
Accordingly, a strategy creation process is subject to four steps as below:

•

Step 1 : Construct target/vision of the company. In this step, the company needs
to determine clearly what the existing business fields are and what the potential
chances in the future are.

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•

Step 2: Analysis of environment. In this step, the company should gather
information on external and internal environment, information valuation and
analysis for determination of changes/ risks and strengths/ weaknesses. Moreover,
this step determines possible combinations between factors of external
environment and factors of internal environment.

•

Step 3: Valuating the best combination between the chances and resources

•

Step 4 : Selection of strategy
Figure 1.3: the process of strategy construction in accordance with SWOT
Step 1

Step 2

Construct and develop vision/tasks of the
company

Valuate chances/risks
- Macro environment
- Micro environment

Consider all
combinations

Valuate
strengths/weaknesses
- Resources
- Special capacities

Step 3

Valuate to determine the best suitability between
chances and resources

Step 4

Select chance

Source: Summarized
In fact, many companies have been using the strategy establishing process based on the
resources. For the reason, companies will analyze and valuate strategic advantages
from systematic considerations for assets, skills, capacities and intangible assets in the
organization. The premise of the approach states that the company operates in other
ways because companies own individual capacities from combination between tangible

23


assets, intangible assets and organization capacity, which they do not have. To be
considered as resource making core capacity for the company, it requires:
o

Play an important role in satisfying demand of customers better than other
replacement resources

o

must be rare, meaning that there is much little companies owning those resources

o

be main driving-force for making profit

o

be in long term

Thus, the construction process of strategy is mostly subject to method of approach of
the company. If the company expects to valuate its complete actuality, it may use a
process of strategy construction in accordance with the SWOT method. In case that the
company wants to construct a competitive strategy on its advantages, it may use a
process of strategy construction based on the value chain analysis. To determine actual
resource to create core capacities, which bring long-term competitive advantages, the
company may select approach in way of resource method. However, a general strategy
may be constructed for the whole graduation paper as follows:
•

Determine and construct vision and task of the company. They require the
company to determine the current range of operation and business chances in the
future. On the other hand, the company must answer the question of “which
business line are we operating in?” and “Where is position of our business line on
the whole network?

•

Valuate chances and risks from external environment of the company. Target of
this valuation is to support the company to use chances and avoid/reduce risks
from the external environment. The result of this valuation will allow the
company to establish a matrix of external factors and a matrix of competitive
images.

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•

Valuate strengths and weaknesses through the internal analysis of the company.
The target of this valuation is to assist the company uphold its strengths and
overcome risks of the company. The result of this valuation will allow the
company to construct a matrix of internal factors

•

Based on this valuation, the company will choose strategy.

1.3. ROLE OF STRATEGY CONSTRUCTION FOR THE COMPANY
According to some researches, when the company has applied strategy management, it
has gained more profit and success than companies has not applied. Besides, strategymaking always raises its possibility to avoid issues on organization because it raise
feelings on risks from environment, increase understanding on competitors, increase
working capacity of staffs, reduce change resistance and raise awareness of staffs in
capacity-bonus relationship in each part of the strategic plan and as a result, raise
working spirit.
In range of the thesis and with analysis on strategies and strategy construction
mentioned above, it may realize that strategy construction will make some fixed

benefits for the company:
•

Be the foundation of the execution and control for the process of the strategy
management.
Strategy construction is the first step in the whole process of strategy
management. Careful preparation for strategy construction will ensure that the
process of strategy management is carried out well.

•

Fixing the future of the company. Through determination of vision and task of the
company, strategy construction will support strategists to aware which business
line the company is operating? How? And how the company expects to develop in
the future?

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