Luận văn thạc sĩ xây dựng chiến lược kinh doanh công ty cổ phần xây dựng công nghiệp toàn PHát giai đoạn 2015 tầm nhìn 2020

Thesis topic
BUILDING BUSINESS STRATEGY FOR TOAN PHAT
CONSTRUCTION INDUSTRY JOINT STOCK COMPANY
(TOPACO) IN 2011-2015 PERIOD AND VISION TO 2020

1


VERIFICATION AND ASSESSMENT OF TOAN PHAT CONSTRUCTION
INDUSTRY JOINT STOCK COMPANY
(TOPACO)
1. Contribution of the research project
The research project of group 10 - class GaMBAM0709 not only introduces
suitable scientific theoretical points but also makes practical contribution to
building business strategy of Topaco.
Scientific implication: In the market economy, business strategy has a
decisive role to the success or failure of an enterprise. Business strategy is important
to all enterprises rather than a typical one. If wanting to exist and develop, first of
all, there must be a good and effective business strategy.
There are many approaches to build business strategy for an enterprise. The
research project has a scientific implication that is summarizing the existing
theories from many different sources to form a process of building business strategy
for an enterprise in the most basic, easy-to-understand and easy-to-use manner.
Practical implication: Rooting from the formation of business strategy that
is vital to an enterprise, the research project contributes to assert the importance of
building business strategy, providing enterprises in general and Topaco in particular
an approach on building business strategy.
In the current market economy with fierce competition, building a successful
business strategy will be a difficult and complicated task. There are many
approaches to build business strategy; however, building an appropriate and
effective business strategy is not simple.

This research project has introduced a new approach to establish a process of
building suitable business strategy to the current situation in Vietnam, not only
applicable to Topaco but also has implication to the formation of business strategy
for many other enterprises. Basic factors involved in the process of building
business strategy include:

2


Identifying the goals of the enterprise; evaluating environmental factors to
the enterprise; finding opportunities and threats to the operation of the enterprises
combining with the assessment on the strengths and weaknesses of the enterprise to
form matrix for selecting strategy and form a full business strategy.
To Topaco, this research project is very valuable to the Company’s Board of
Leader in making business strategy, especially in reinforcing and promoting the
brand image via raising productivity and effectiveness of sales and customers care
services, bringing about high effectiveness for Topaco.
2. Shortcomings of the capstone project and orientation for later
researches
Because the conclusion of the research is drawn from the real situation at
Topaco, so according to Topaco, the application of these measures and conclusions
into other companies will need further researches.
On behalf of Topaco’s Board of Leaders, I would like to express our sincere
thanks to members of group 10 for the research project./.
GENERAL DIRECTOR OF THE COMPANY

Nguyen Ngoc Vinh

3

ACKNOWLEDGEMENT
To help us complete the capstone project of Global Advanced Master of
Business Administration Program (GaMBA), members of group 10- class
GaMBA.M0709 has received a lot of support and contributed ideas of the lecturer
and staff of GaMBA Program ad Board of Leaders of Toan Phat Construction
Industry Joint Stock Company.
We would like to express our sincere thank to the Board of Leaders,
Teaching and Study Managing Department, Class Management Division, etc. of
GaMBA Program. We are very grateful to the Board of Leaders and the staff of
center for Educational Technology and Career Development (ETC) - Vietnam
National University, Hanoi and Griggs University (USA). Thanks to your support,
we can study in the most favorable conditions.
We are grateful to lecturers of GaMBA Program and Griggs UniversityUSA. Thanks to your enthusiasm and conscience in teaching, we have gained useful
knowledge for our current jobs.
Last but not least, we are in debt to our families’ members and classmates in
M0709 class. Thanks to their support and encouragement, we have finished the
course without encountering any obstacles.
Although the group has tried a lot but due to the condition of work-study, the
quality of the capstone project is still limited. We do hope and will try to study and
develop the research project both in theory and in application in the real situation of
Topaco with the expectation to make a small contribution to the sustainable success
and development of Topaco in competing in the coming integration environment.
We have tried to complete the capstone project in the best way with our
knowledge and capacity; however, shortcomings are unavoidable, we do hope to
receive valuable contributions from our teachers and classmates./.
MEMBERS OF GROUP 10

4

TABLE OF CONTENT
Page

VERIFICATION AND ASSESSMENT OF TOPACO COMPANY
ACKNOWLEDGEMENT
LIST OF TABLES
LIST OF FIGURES AND GRAPHS
PREFACE
1.
General context, the necessity and implication of the research
project
2.
Objective and scope of the study
3.
Methodology of the study
4.
Structure of the capstone project
Chapter 1. BASIC RATIONALE OF THE REAEARCH PROJECT
1.1 CONCEPT AND CLASSIFICATION OF BUSINESS STRATEGY
.
1.1.1. Concept of business strategy
1.1.2. Role of business strategy
1.1.3. Basic characteristics of business strategy
1.2 PROCESS OF BUILDING BUSINESS STRATEGY
.
1.2.1. Analyze internal and external environment
1.2.1.1 Analyze internal environment
.
1.2.1.2 Analyze external environment

.
1.2.2. Building matrix to select business strategy
1.2.2.1 External Factor Evaluation Matrix
.
1.2.2.2 Internal Factor Evaluation Matrix
.
1.2.2.3 Competitive Profile Matrix
.
1.2.2.4 SWOT Matrix
.
1.2.3. Select business strategy
1.2.3.1 Organization and implementation
.
1.2.3.2 Evaluate the effectiveness of the strategy
.
Chapter 2. ANALYZING REAL SISTUATION OF PRODUCTION
AND BUSINESS OF TOAN PHAT CONSTRUCTION INDUSTRY
5

2
4
7
8
9
9
10
11
11
13
13

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14
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5
1
6
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9
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0
2
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4
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5
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JOINT STOCK COMPANY
2.1 GENERAL INTRODUCTION OF THE COMPANY
.
2.1.1. The process of establishment, organizational structure and

apparatus
2.1.2. Situation and business performance from 2008 to 2010
2.2 ANALYZING SITUATION ANG BUSINESS SITUATION OF
.
TOPACO COMPANY
2.2.1. Analyze external environment
2.2.1.1 Macro environment
.
2.2.1.2 Sectorial and competitive environment
.
2.2.2. Analyze internal environment
2.2.2.1 Resources
.
2.2.2.2 Strengths
.
2.2.2.3 Weaknesses
.
2.2.2.4 Competition in the market
.
2.2.3. Matrix to select business strategy
2.2.3.1 External-Internal factor evaluation matrix
.
2.2.3.2 BCG matrix
.
2.2.3.3 SWOT matrix
.
Chapter 3. RECOMMENDATIONS, SOLUTIONS
3.1 GOAL FOR 2015 AND VISION TO 2020 OF TOPACO
.
3.1.1. Targets by 2015

3.1.1.1 Strategic target
.
3.1.1.2 Specific target
.
3.1.2. Vision to 2020
3.2 SOME SOLUTIONS AND RECOMMENDATIONS FOR
.
TOPACO TO COMPLETE BUSINESS STRATEGY

6

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28
31
31
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2
3
4
42
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4
7
4
9
4
9
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65
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3.3
.

3.2.1.
3.2.2.

Building business strategy
Selecting business strategy
3.2.2.1 Bases for selecting
.
3.2.2.2 Defining business strategy
.
SOME SOLUTIONS FOR IMPLEMENTATION

67
70
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0
7
4
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3.3.1. Some solutions to production management
3.3.2. Solutions to marketing management
3.3.3. Solutions to human resource management
3.3.4. Solutions to finance management
SOME RECOMMENDATIONS TO THE STATE

75
77
79
81
82

3.4
.
CONCLUSION
REFERENCES

83
84

LIST OF TABLES

Table 1.1: External factor evaluation matrix …………………………………
Table1.2: External factor evaluation matrix ………………………………...
Table1.3: Competitive Profile Matrix ………………………………………
Table 1.4. SWOT Matrix ……………………………………………………
Table 1.5. Table of selecting strategy ……………………………………….
Table 2.1: Performance of Production and Buisness in 2008, 2009, and 2010
Table 2.2: List of main supplier of material for Topaco …………………….
Table 2.3: Table of comparison of competitors ……………………………..
Table 2.4: External Factor Evaluation Matrix of Topaco (EFE) ……………
Table 2.5: Topaco’s matrix of internal factor evaluation (IFE) ……………..
Table 2.6: Several socio-economic targets …………………………………
Table 3.1: SWOT matrix of Topaco………………………………………..
Table 3.2: comparison of feasible strategies ………………………………...

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page
20
21
21
22
23
29
40
50
52
53
61
67
71

Table 3.3: GREAT Model to select strategy ………………………………...
Table 3.4: Total production cost of 1m3 of concrete construction

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76

………….

LIST OF FIGURES AND GRAPHS
Figure 1.1. Business strategy ………..……………………………………….
Figure 1.2. Process of building business strategy ……………………………

Figure 1.3. Macro environment

page
13
15
16

……………………………………………...
Figure 1.4. Five forces model ………………………………………………..
Figure 2.1: Model of Organizational structure ………………………………
Figure 2.2: Chart of Revenue, Profit Target …………………………………
Figure 2.3: Chart of density structure of products and service as per revenue .
Figure 2.4: IFE – EFE matrix ………………………………………………..
Figure 2.5: BCG Matrix ……………………………………………………

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30
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55
56


PREFACE
1. GENERAL CONTEXT, THE NECESSITY AND IMPLICATION OF
THE RESEARCH PROJECT
Following the quick recovery of the world economy after the economic crisis
that is rated as the worst one for many decades. Along with the strong competition
in Southeast Asia and the international economic integration, Vietnam is entering
the period of industrialization and globalization and process of building
infrastructure and developing socio-economy. Therefore, Vietnam’s construction
sector plays a very important role in the country development process, at the same
time; it is also facing great challenges and potentials in the regional and world’s
economic integration in the following stages.
International economic integration creates conditions for Vietnam’s
construction enterprises to have a more dynamic business environment. Vietnam
also becomes a new market to foreign enterprises. When foreign enterprises invest
in Vietnam, there will be a competitive environment; therefore, Vietnam’s
enterprises need to build a concrete and long-term business strategy.

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Toan Phat Construction Industry Joint Stock Company (Topaco) is a newly

established Company which has ceaselessly developed in organizational scale. At
present, Topaco has been participating in constructing many key industrial projects
of the country such as hydroelectric power plants, bridges and roads, civil
construction, etc. Therefore, setting targets and plans as well as operating strategies
for the Company to set the long-term development orientation really plays an
important role in the development orientation, creating competitive advantages to
the Company in the coming time. More importantly, the leader of Topaco is also a
member of group 10 – that is the Chairman of Management Board and General
Director of the Company – Mr. Nguyen Ngoc Vinh.
Therefore, we, group 10 decided to select the topic "Building the business
strategy of Topaco from 2011 to 2015, Vision up to 2020" as a capstone project.
The topic will demonstrate the importance and practical significance of building a
business strategy if the Company really wants to have sustainable development. At
the same time, the subject also provides businesses and business owners with
strategy-building process, analysis and assessment of the real situation of current
business of the Company, analyses of both objective and subjective impacts on the
production and business activities of the company. Since then, we will make
recommendations to choice the best business strategy to the Company in 2011 2015 period and vision toward 2020.
2. OBJECTIVE AND SCOPE OF THE STUDY
2.1. Objective
- Establish theoretical base for programming the business strategy of Toan
Phat Construction Industry Joint Stock Company.
- Analyze and assess macro-environment, micro-environment as well as the
internal environment of the Company in order to realize opportunities and threats
from business environment; advantages and disadvantages affecting the
development of the Company.

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- Build strategic business objectives for the Company from date to 2015,
vision up to 2020 and propose the plan to implement the strategic objectives in
order to help the Company develop sustainably in competitive environment and
integration.
- To us, members who conduct the project, this is the application of theory
learnt from MBA program to solve job-related problems in the reality.
2.2. Subject and scope of the study
- Subject of the study: Toan Phat Construction Industry Joint Stock
Company (Topaco). However, in order to analyze and clarify the content studied,
the research subject is expanded to other competitive companies in the construction
sector.
- Scope of the study: includes problems related to the business strategy of
Topaco in execution and installation.
- Research duration through statistical data from 2008 to 2010 and factors
affecting the business of the Company up to 2015 to analyze and assess the business
of the Company.
3. METHODOLOGY OF THE STUDY
To achieve the objective and meaning as mentioned above, research method
selected by us is applying synthetically a lot of qualitative and quantitative research
methods, including:
- Method of dialectical analytical: We have analyzed the data and documents
on the development history of Toan Phat Construction Industry Joint-stock
Company (Topaco) as well as resource management of the Company for the past
years, especially three recent years (2008, 2009 and 2010) to analyze the strengths
and weaknesses of the Company and focus on researching opportunities as well as
challenges in order to make the best business development strategies for the
Company in 2011-2015 period. We also considered the research subject in a logical
and dialectic relation with other problems to make the essay more highly applicable.

11

- The statistical and method combines theory and practice to build matrices
in order to select the appropriate business strategy for Topaco. The advantage of
this method is simple to implement, but this method also has disadvantages, that is,
the accuracy is often not at high level compared to the actual survey because it
comes from the subjective opinions of those who implement the project. However,
this method is enough to build a good business strategy.
4. STRUCTURE OF CAPSTONE PROJECT
Apart from the introduction, conclusion, the capstone project consists of
three chapters and the summary of each chapter is presented as follows:
Chapter 1: Basic rationale of the research project
This chapter presents most basically the definition of business strategy and
process to program a business strategy, at the same time, present matrices to help
select the business strategy.
Chapter 2: Analyzing the real situation of business of Toan Phat
Construction Industry Joint Stock Company (Topaco)
Introduce the establishment and development of the Company, key business
products and make brief assessment about the business of the Company in recent
time. Analyze external environment as well as internal environment, strengths and
weaknesses, and establish matrices like IFE, EFE and BCG. The conclusion of the
chapter makes assessment of the implementation of business plan, shortcomings
and necessity to build a business strategy in 2011 – 2015 period.
Chapter 3: Solutions and recommendations
Determine the objective, vision, mission, core value to propose and select
business strategy in 2011-2015 period, solutions to deploy the strategy and some
recommendations to solve shortcomings and enhance business production
effectiveness of Toan Phat Construction Industry Joint Stock Company (Topaco) in
the up-coming time.

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Chapter 1
BASIC RATIONALE OF THE REAEARCH PROJECT
1.1. CONCEPT AND CLASSIFICATION OF BUSINESS STRATEGY
1.1.1. Concept of business strategy
The concept of business strategy was introduced a long time ago. This is the
science of planning and controlling activities. Accordingly, the basic theoretical
point of strategy is that a party can crush their rival that is even stronger and more
crowded if they can lead the situation and put their rival into a favorable battlefield
for the deployment of their capacities. When the exchange of goods became more
and more developed in the society, strategy started to be used more in business with
the general model as follows:
Opportuni
ties

Strengths
Finding

Applying,
sustaining

Strategy

Internal

Overcoming

External

Preventing

Weaknesses

Threats

Figure 1.1. Business strategy
Scholars viewed business strategy under different angles. According to
Michael Porter (1996), a well-known scholar of strategic management at Harvard
University, the business strategy is considered the art of competition in the
marketplace and development because: "Strategy is the art of building firm
competitive advantages to defend.” In view of management category, business
strategy is a plan; G. Arlleret thought that "Strategy is the determination of the ways
and means to achieve the set objectives via policies ".

13


At least, there are three levels of business strategy that identified. In which,
the corporate level aims at the purpose and overall scale of the organization;
business unit level is the overall commitments and actions to gain competitive
advantages by exploiting their core competencies on the market of specific product;
functional strategies are strategies that enable business-level and corporate level
strategies to be effectively implemented by the components related to resources,
processes, people and necessary skills.
The concept of business strategy in the textbook of MBA course of Griggs
University is "a series of commitments and actions that a company uses to win a
competitive advantage by exploiting the core competencies on a certain market.”
1.1.2. Role of business strategy

Business strategy helps a company identify its purpose and direction to set
the base and the guideline for all business activities. It also helps the company
capture and take advantage of business opportunities, and has proactive measures to
overcome the risks and threats in the competitive market. Building business strategy
contributes to improving the efficient use of resources, strengthening competitive
position and ensuring the sustainable development of the company. Business
strategy creates a solid basis for working out business policies and decisions that are
in line with market fluctuations.
1.1.3. Basic characteristics of business strategy
Business strategy clearly defines the basic objectives and directions of the
company's business in each period. The orientation of strategy ensures the constant
and solid growth in the changeable business environment. On the other hand, the
business strategy ensures the maximum mobilization and optimal combination of
the exploitation and use of company resources at the present and in the future to
promote the advantages and seize the opportunity to gain advantages in the
competitive world. With the specific characteristic of being reflected throughout a
continuous process, business strategy always contains a emulative thinking and
winning success on the business world and is often developed in a period ranging

14


from 3, 5 or 10 years or further.
1.2. PROCESS OF BUILDING BUSINESS STRATEGY
Process of building business strategy is described according to following
steps:
Mission or the goal of the enterprise
Analyzing external
environment (O, T)

Analyzing internal
environment (S, W)
Selecting strategy

Implementing the strategy

Checking and assessing the result

Feedback

Figure1.2. Process of building business strategy
1.2.1. Analyze internal and external environment
Environment is factors, forces and institutions existing and influencing the
organization’s operation and results of operation. The role of environmental
analysis is basically creating the basis for the planning or confirming the function
and mission of the organization. Business environment of an organization include
the external environment and internal environment.
1.2.1.1. Analyze internal environment
- Analyzing sustainable competitive advantages: through the analysis of
financial resources including facilities, human resources, production capacity,
research and development, technological assets such as trademark, patents; value
chain analysis; major activities of the enterprise; analysis of relation management;
analysis of sustainability and strategic assets.
- Analyzing strategy: includes the analysis of a company’s strategy to review

15


current business units and geographic scope of the enterprise’s operation, the
analysis of product-customer strategy to define the focus of the enterprises in terms

of product -consumer segment; viewpoint of competitive strategy to understand the
competitive mode being applied by the enterprise; the analysis of functional
strategies consider whether the enterprise can implement those strategies on its own
or need to link the implementation of those functions; ultimately the suitability
assessment of the above-mentioned strategies.
- Analyzing financial performance: The fundamental purpose of this section
is to evaluate the financial performance of an enterprise in creating profit.
Analyzing parameters directing to four main categories, namely profitability,
liquidity, financial leverage and operating parameters.
1.2.1.2. Analyze external environment
Political environment

Global
environment

Economic
environment

Internal environment
of the enterprise

Technological
environment

Social and cultural
environment

Demographic
environment

Figure 1.3. Macro environment
* General environment:
General environment includes the broad aspects of the society that affect the
industry and companies in the industry. General environmental has macro

16


characteristics and consists of demographic, economic, political / legal, sociocultural, technological and global factors, etc. Changes in the general environment
can have direct impact on any certain forces in the industry, altering the relative
power to other forces and to it and ultimately changing the attractiveness of an
industry. Therefore, the analysis of external environment helps organizations be
aware of challenges and opportunities confronting them to attain the right
orientation.
Economic factors: Economic environment indicates the nature and
orientation of the economy in which the enterprise is operating.
Political-legal factors: Are factors showing the stability of political
institutions, constitutions and government’s policies that directly affect the
production and business environment of the industry or the enterprises.
The socio-cultural factors: Are factors related to social attitudes and cultural
values because they form the foundation of the society. That is the change in
viewpoint on life, living standard, consumer habit, career expectations, population
growth rate, population shifts, the diversity of the workforce, traditions, beliefs,
customs, etc. The changes of these factors will create opportunities, challenges or
threats to the industry or the enterprise.
Demographic factors: Demographic segment in the macro environment
related to population, age structure, geographic distribution, ethnic communities and
income distribution. These factors need to be analyzed on the global scale because
their potential impacts are beyond the national borders and there are many
enterprises competing in the global scale.

Technological factors: Technology is a critical factor to the competitive
advantage of an enterprise, it is the driving force in globalization. Technology allows
products and services to be produced at a lower cost and higher quality standards.
New technology changes the distribution of products in the business system.
Global factors: Global segment includes related global markets, current
markets which are changing, the important International political events, and basic

17


institutional and cultural characteristics on the global market. Due to globalization,
business market creates both opportunities and challenges, so enterprises should be
well aware of different characteristics in cultures, societies and institutions of the
global market.
* Sectorial environment:
Michael Porter has modeled businesses and supposed that all businesses have
to bear in the impact of five competitive forces. Strategists who are searching for
the outstanding advantages compared to their competitors can use this model to
better understand the environment of their business. This model is considered a
useful tool to find out the source of profits. More importantly, the model also
provides competitive strategies to maintain or increase profits or enterprises can use
the model to analyze whether they should join or operate in a certain market or not.
The intensity of competition in the market of any industry is affected the five
competitive forces as follows:
Threat of new
entrants
Threats of having new
competitors

Bargaining

power of
suppliers

Ability to generate
pressure of suppliers

Competitive rivalry
within an industry

Ability to generate
pressure of
customers

The competition of
existing enterprises
in the industry

Threats of substitute products
and services
Threat of substitute
products

Figure 1.4. Five forces model

18

Bargaining
power of
buyers

Threats of new entrants: Potential rivals of an enterprise are enterprises that
prepare to enter the industry and may have influence on the structure of the industry
in the future.
Bargaining power of suppliers: The power of suppliers is the ability to
determine the conditions for their transactions with the enterprise. The determinants
of suppliers’ power is expressed via the concentration of suppliers, the
standardization level of input, the expense for changing suppliers, the threat of
strengthening the consolidation among suppliers and productions units and power of
purchasing units.
Bargaining power of buyers: is the influence of the buyers on a certain
industry. Customers have great bargaining power when they are highly
concentrated; in other words, there are a small number of customers accounting for
a large market share. Customers who buy a large quantity of products in the context
that distribution channels or products have been standardized or likely to be merger
or even an acquisition of the producing firms.
Threat of substitute products: Substitute products are referred to products of
another manufacturing industry. The threats of substitute products occur when the
demand for a product is affected by changes in the price of an alternative product.
Price elasticity of demand of a product is affected by changes in the price of the
substitute product.
Intensity of competition in the industry: Not only current rivals in the
industry can create threats to enterprises in an industry, but the capacities of new
entrants of the industry can also affect the competition.
In a nutshell, the main goal of the macro-environment analysis is to identify
the changes and the projected trends from the factors of the external environment to
identify opportunities and threats to help an enterprise orient its strategy in the
future.
1.2.2. Building matrix to select business strategy
1.2.2.1. External Factor Evaluation Matrix

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External factor evaluation matrix aims at evaluating external factors having
influence on the Company’s operation, including opportunities and threats of Toan
Phat Construction Industry Joint Stock Company.
Method of building the matrix: Establishing a list of all external
environmental factors that affect the Company's activities, assessing the influence
or the importance of each factor marking weights, total marks of weights of all the
factors equal to 1 or 100%.
Assess the Company's response to these factors by sorting the factors from
(1) to (4), in which (4) is the strongest response by the Company and (1) is the
weakest. Next, mark the importance of each factor by multiplying the weight with
the corresponding points of classification, then add up the points again to find out
the total mark of the importance of the Company. The highest, average and lowest
marks of importance are (4), 2.5 and (1), respectively.
If the total mark of importance is (4), it shows that the Company is best
capturing opportunities and best controlling threats from external environment. If
total mark is (1), it shows the company cannot grasp opportunities and control
threats from the external environment.
Table 1.1: External factor evaluation matrix
External factors (listing)
......

Levels of importance
(weight)

Total

1,0

Classification

Important point

1.2.2.2. Internal Factor Evaluation Matrix
Internal factor evaluation matrix is the matrix for evaluating internal factors
influencing the Company’s operation, including strengths and weaknesses of the
Company.
Method of building the matrix: Setting up a table to list all the internal
factors influencing the Company’s operation, evaluating the influence or the
importance of each factor by marking weights.
Assess the Company's response to these factors by sorting the factors from

20


(1) to (4), in which (4) is the strongest response by the Company and (1) is the
weakest.
Next, mark the importance of each factor by multiplying the weight with the
corresponding points of classification, then add up the points again to find out the
total mark of the importance of the Company.
The highest, average and lowest marks of importance are (4), 2.5 and (1),
respectively.
Table1.2: External factor evaluation matrix
Internal factors (listed
......

Level of importance

(weight)

Classification

Important point

Total
1.2.2.3. Competitive Profile Matrix
Of external factors, competition is the most important one. Competitive
profile matrix helps us recognize major competitors as well as their strengths and
weakness to help the Company has a more appropriate strategy. Competitive profile
matrix is represented in the following table:
Table1.3: Competitive Profile Matrix
No.

Factors
contributing to

1

...

2

...

3

...
Total

Level
of

Competitor 1
Classi
ficati
on

Impor
tant
point

Competitor 2
Classi
ficati
on

Impor
tant
point

Competitor 3
Classi
ficati
on

Impor
tant
point

...
Classi
ficati
on

Important
point

1,00

1.2.2.4. SWOT Matrix
As we may know, SWOT matrix is a tool gathering all components of the
Company’s internal factors and external factors and combining them into business
strategies as follows:
Table 1.4. SWOT Matrix
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Internal environment

Strengths – S
Listing strengths:

Weaknesses – W
Listing weaknesses

1.
2.
3.

4...

1.
2.
3.
4....

External environment
Opportunities - O:
Listing opportunities

Strategies
SO
Using all strengths by making use
of opportunities

1.
2.
3.
Threats -T
Listing threats:
1.
2.
3...

Strategies
WO
Overcoming weaknesses by
making use of all opportunities

Strategies
ST
Using strengths to avoid threats

Strategies
WT
Minimizing
weaknesses
avoiding threats

and

S-O strategy: Pursuing the most suitable opportunities with the Company’s
strengths, orienting business in the market (Attacking).
W-O

strategy:

Overcoming

weaknesses

to

pursuing

opportunities

(Competing).
S-T strategy: Clearly defining the methods that the Company can utilize its

advantages to reduce losses caused by external threats (Being careful).
W-T strategy: Forming a defense plan to prevent the Company’s weaknesses
from the threats of external environment (Defending).
On the basis of summarizing the strategies identified by combining
strengths-opportunities, strengths-threats, weaknesses-opportunities, weaknessesthreats, using GREAT model to outline the basic features of selecting key business
strategy that the Company can pursuit:

Table 1.5. Table of selecting strategy

22


Converting
mark

Assessing
mark

Converting
mark

Assessing
mark

Converting
mark

Strategy n

Assessing

mark

2

...

Converting
mark

1
Gain (G)
Risk

Strategies
Strategy 3

Strategy 2

Assessing
mark

Weight
Criteria

Strategy 1

3

4=2x3

5

6=2x5

7

8=2x7

i

j=2xi

(R)
Expense
(E)
Feasibility (A)
Time (T)
Total

1

xx

xx

Xx

xx

Step 1: Considering, selecting and working out factors related to the

development plan of the Company for analysis in the first column, which is listing
the criteria for analysis (First column).
Step 2: To assess the impact of these factors to the overall strategy, we use
the impact indicators implying the importance and influence of factors to strategies.
This coefficient is calculated by marking from 0 to 1 and the total mark of weights
is always equal to 1 (Second column).
Step 3: In this step, implementing the assessment and marking for in each
analyzed factor of each strategy. Assessing marks are calculated by marking from
10 to 50, the lowest is 10 and the highest is 50 (corresponding to levels: low,
average, pretty average – concentrated, quite good and good). These assessing
marks show the completion level of the analyzed target (Third column)
Step 4: Converting coefficients which are the products of the two columns
(the second and the third columns) of each strategy, then accumulating those results
to find out the final result which is the sum of above products. Selecting about 03
strategies with highest total marks for implementing.
1.2.3. Select business strategy
Cost-leadership strategy: is all activities to supply products or services
having characteristics accepted by customers with the lowest cost in the industry. It

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means that the Company has known to make full use of its capabilities to supply
products or services with lower cost than its competitors. Since then, the Company
can gain significant advantages compared to its competitors. It is a tool to attract
customers to occupy greater market share. This strategy brings the Company
advantages of low prices compared to its competitors, but it still has the same profit
level, even higher and the Company will have a firmer position in the fierce
competition with rivals in the industry, including new entrants and not being
affected much by the bargaining power of suppliers, bargaining power of buyers as

well as substitute products. To achieve this, the Company may have advantages in
terms of high technology, preferential in approaching input materials, good
production capacity, appropriate policies, etc.
Product differentiation strategy: That is the Company seeks for
opportunities to become the only enterprise in supplying the unique products or
services in the eyes of the buyers under a certain aspect. This strategy chooses one
or several attributes of the products that buyers assess important and then position
the Company itself as unique in meeting that demand.
Concentrated growth strategy: Is built on the basis of selecting narrow
competitive scale in the industry. By optimizing the strategies aiming targeted
segments, enterprises having concentrated growth strategy concentrate on seeking
and attaining competitive advantages right in the target segment, although generally
they do not hold any advantage.
1.2.3.1. Organization and implementation
When business strategy is build, organizing and implementing the strategy is
reviewing the goals of the strategy and the base to build strategy, annual goals,
system of policies and plans; work out programs, suitable budget and procedures;
allocate resources (human resource, finance and infrastructure); select and complete
a suitable organizational structure with the strategy; establish steering board and
management mechanism;, commit to implement the strategy; gradually implement
the strategy and finally, check, control and adjust the process of implementing the

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strategy.
1.2.3.2. Evaluate the effectiveness of the strategy
+ Checking the suitability of business strategy before officially deploying it.
As mentioned above, business strategy is a decisive factor the success or failure of
the Company.

+ Assessing the work performance of the Company in each period of
implementing business strategy to find out weaknesses and shortcoming of the
strategy to timely revise and supplement.
+ Process of checking and evaluating the effectiveness of the strategy
includes determining the content of the checking and assessing, working out
standards and criteria for the checking and assessing, quantifying the results of
strategy implementation, comparing and evaluating the results and identifying the
reasons for the differences to find out measures for improving.
Chapter 2
ANALYZING REAL SISTUATION OF PRODUCTION AND BUSINESS OF
TOAN PHAT CONSTRUCTION INDUSTRY JOINT STOCK COMPANY
Among issues mentioned in Chapter 1, we provide theoretical concepts and
basic terminology as the basis of building business strategies for the company.
These are the concepts of business strategies of scholars for a comprehensive view
of business strategy ; giving roles, characteristics of business to understand why the
company should build business strategy ; providing the process of building business
strategy, including these steps : identify the company’s mission and objective, make
analysis of internal and external environment, offering measures to build matrix to
select business strategy, the ways to implement business strategy, and lastly
implementation evaluation.
Our group has applied these above theories and methods to make analysis of
operational environment and build business strategy for Toan Phat Construction
Industry Joint-Stock Company (Topaco).

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