LUẬN văn THẠC sĩ CHIẾN lược KINH DOANH TRỰC TIẾP tại CÔNG TY cổ PHẦN NHỰA TIỀN PHONG

LUẬN VĂN THẠC SĨ
CHIẾN LƯỢC KINH DOANH TRỰC TIẾP TẠI CÔNG
TY CỔ PHẦN NHỰA TIỀN PHONG

THE BUSINESS STRATEGIC
DIRECTION IN TIEN PHONG
PLASTIC JOINT STOCK COMPANY


2

THANKS
Through nearly 2 years learning in GRIGGS University, Hanoi National
University, we have been taught much knowledge about Business Administration.
And by the theoretical foundation and working reality, we have chosen the topic
“The business strategic direction in Tien Phong Plastic Joint Stock Company to the
year 2013” as the research topic for my graduation composition with the best regard
to give small contribution to the stable development of Company.
We are grateful to teachers in Institution of Business Administration who are
all teaching and instructing me all the real and necessary knowledge in the wholehearted way. Especially, we would like to thank Assoc.Pro, PhD Vu Tri Dung who
directly instructs me to complete this composition.
We are also thankful to all students in Gamba01.n01 class, friends,
colleagues who have supplied the precious documents for composition and at the
same time encourage me so much in completing my graduation composition.

table of contents

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Thanks
table of contents
List of tables
List of figures and graphs
Introduction
1. The necessity of the research topic
2. Research problems
3. Research objective
4. Scope of research
5. Scope of research
6. Composition structure
Chapter 1: ARGUMENT BASE FOR BUILDING BUSINESS
STRATEGY IN BUSINESS
1.1. Primary definitions
1.1.1. Strategy’s definition
1.1.2. Strategic levels
1.1.3 Strategic procedure

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1.2. Model in strategic building

1.2.1. Environmental analysis models
1.2.1.1. PEST Model – General environmental analysis model
1.2.1.2. Five Force model of Michael Porter – Industry analysis

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model
1.2.1..3. Life cycle of industry
1.2.2. Internal business analysis model
1.2.2.1. Value chain model of Michael Porter - Internal business

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analysis model
1.2.2.2. Model of Mc Kinsey – organizational analysis model
1.2.2.3. Valuable source, key capacity and competitive advantages

1.2.2.3.1. Valuable source
1.2.2.3.2. Key capacity
1.2.2.3.3. Competitive advantages
1.2.3. General model – SWOT analysis
1.3. Business strategy
1.3.1. SPACE model to locate business location
1.3.2. General business strategy
1.3.2.1. Product differentiation strategy
1.3.2.2. Low cost strategy in business

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1.3.2.3. Market concentration strategy

1.3.3. Fast and flexible reaction strategy
1.3.4. Strategy to create values and benefits for customers
1.3.5. Periodical strategy of product’s life cycle
1.4. Implement and control strategies

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CHAPTER 2: INTRODUCTION ABOUT THIEU NIEN TIEN
PHONG PLASTIC JOINT STOCK COMPANY AND ANALYSIS OF
COMPANY’S BUSINESS ENVIRONMENT.
2.1. General introduction about Thieu Nien – Tien Phong Plastic Joint

37

Stock Company
2.1.1. Establishment and development procedure
2.1.2. Function and missions
2.1.3. Business lines
2.1.4. Products and markets
2.2. Business environment analysis
2.2.1. Analyzing general environment according to

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PEST model
2.2.2. Competitive environment analysis
2.2.2.1. Five Forces competitive advantages analysis of M Porter
2.2.2.2. Industry’s life cycle
CHAPTER 3: ANALYZING INTERNAL SECTION OF THIEU

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NIEN TIEN PHONG PLASTIC JOINT STOCK COMPANY
3.1. Analyzing internal company according to value chain
3.2. Internal analysis according to 7S model
3.3. Key capacities and competitive advantages of Company
3.4. SWOT Analysis
3.5. Company’s position in market

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CHAPTER 4: THE BUSINESS STRATEGIC ORIENTATION FOR
THIEU NIEN TIEN PHONG PLASTIC JOINT STOCK COMPANY
IN THE PERIOD 2009-2013

4.1. Development orientation of Vietnam plastic industry
4.2. Strategic vision and mission
4.3. Suggestions the business strategy orientation
4.3.1. SPACE model to define Company’s position
4.3.2. Product differentiation strategy

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4.3.3. Fast and flexible business strategy
4.3.4. Strategy to create values and benefits for customers
4.4 Some suggestions to State managing agencies
CONCLUSION
REFERENCES

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LIST OF TABLES
Table 1.1: SWOT analysis

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Table 2.1: General environment analysis summary

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Table 2.2: List of suppliers

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Table 2.3: Percentage % of each customer group

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Table 2.4: Competitors in market

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Table 2.5: Five Forces analysis

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Table 2.6: Company’s revenue in plastic industry

53

Table 2.7: Profits of Thieu Nien Tien Phong Company & Binh Minh
Plastic Company

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Table 3.1: Production indicator
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Table 3.2: The over internal business analysis according to value
chain

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Table 3.3: Target labor structure

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Table 3.4: Internal analysis according to 7S model

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Table 3.5: Comparison table with competitors

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Table 3.6: Criteria on revenue, profits and charter capital

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Table 3.7: Revenue and capacity comparison with competitors in 2008

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Table 3.8: Criteria of Vietnam plastic industry

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Table 3.9: Summary of SWOT analysis

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Table 4.1: Material index of Vietnam Plastic Industry

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Table 4.2: Product index of Vietnam Plastic Industry

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Table 4.3: Substitutes for plastic products

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Table 4.4: Specialized industry in Vietnam plastic industry
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List of figures and graphs
Figure1.1:

PEST

analysis

model.................................................................

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Figure 1.2: Five Force Model of Michael Porter....................

14

Figure

1.3:

Life

cycle

of

industry...................................................................
Figure

16

1.4:

Value

chain....................................................................................

18

Figure 1.5: 7S Model of
McKinsey................................................................21
Figure

1.6:

Sources

of

competitive

advantages....................................................
Figure

1.7:

Model

to

23
locate

Company

location........................................
Figure

2.1:

25

Plastic

industry’s

cycles ..........................................................

life
55

Figure 3.1: Distribution network...................................................
58
Figure

3.2:

Organization

structure..............................................................
Figure

4.1:

Model

to

position.................................................

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Company’s
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INTRODUCTION
1. The necessity of the research topic
In the current fierce competitive context, each business itself has to find the
right direction and a suitable development strategy with the external environment
and the internal factors if it wants to exist. And after all, business strategy is a
composition and the most importance foundation in order to build a business
strategy.
Over 40 years of establishment and development, Thieu Nien – Tien Phong
Plastic Joint Stock Company is now one of the leaders in the Vietnam Plastic
Industry, all the products with brand “Tien Phong Plastic” have been known as the
high quality products and having the good after-sale service by the domestic
consumers.
However, Company is the longtime State company so it has not had the clear
and suitable business strategy when transferring to the Joint Stock Company model,
there is no common unity in Company. Moreover, after Government dissolve
Vietnam Plastic Corporation in 2004, there was no market segment in the North,
Middle and South in plastic industry so Northern Market is the main market and it
is fiercely competitive with plastic enterprises in the South. Besides, when our
country joined in WTO, many investors who have high potential finance,

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technology – technique, management experience have entered Vietnam plastic

market and become great threats for Company. So as to become the leader business
in Vietnam plastic market, it is necessary to have a long term business strategy for
the development of Company. As working in Business Department in Company, I
choose the topic ““The business strategic direction in Tien
Phong Plastic Joint Stock Company to the year 2013” as the
topic for graduation composition with the regard to have small contribution to
upgrade brand name “Tien Phong Plastic” and remain as the strong brand name of
Vietnam plastic industry
2. Research problems
- The external environmental factors react to the business strategy building.
- Factors within business react to the business strategy building
- Business strategy direction to 2013 for Thieu Nien Tien Phong Plastic Joint
Stock Company basing on the combination between theories and real analysis
3. Research objective
- Systematizing some arguments about building business strategy for
Company
- Analyzing the business environment previous time and the next time.
- Analyzing the internal factor and potential development
- Directing the suitable business strategy for Company’s products in the
period from now to year 2013 and the long term development direction in the next
years.
4. Scope of research
Analysing the business environment for Company’s products from 2004 to
2008 in order to orient the business strategy to 2013 in Hue to Northern markets.
5. Research method
The composition uses some primary and second data as following:
- Collecting the second data through sources of newspaper, internet,
distribution channel, internal document

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- Collecting primary date: Using quantitive and qualitative method to collect
primary data.
+ The investigation method and data collection are made by questionares
which are sent to some agents in distribution channel. There are over 200 agents
spreading from Hue to the Northern provinces, and 45 answer sheets. The main
content of investigation sheet is the evaluation collection of customers about some
aspects of Company like: product quality, price policy, sale policy, product type and
serving behavior and so on
+ Interviewing the members in Management Board of Company like
President of Management Board, members of Management Board, General
Director, Deputy General Director and so on about the development orientation of
Company in the future.
- Using some analysing and statistical method in order

to analyizing

collected primary data.
6. Composition structure
- Chapter 1: Argument base for building business strategy in business
- Chapter 2: Introduction about Thieu Nien Tien Phong Plastic Joint Stock
Company and analysis of Company’s business environment.
- Chapter 3: Analyzing internal section of Thieu Nien Tien Phong Plastic
Joint Stock Company
- Chapter 4: The business strategic orientation for Thieu Nien Tien Phong

Plastic Joint Stock Company in the period 2009-2013

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CHAPTER 1
ARGUMENT BASE FOR BUILDING BUSINESS STRATEGY IN BUSINESS
1.1. Primary definitions
1.1.1. Strategy’s definition
The terminology ”Strategy” was initially used and popular in the military
area, according to the Encyclopaedic Dictionary ”Strategy is science and military
management art which is applied in planning and performance in the general scope
in order to get the final victory”, or according to Larouse Dictionary ”Strategy is
a command art for means to get the victory and is the fighting art in the
advanterous position”.
Nowadays, the terminology ”Strategty” is applied in a very popular way in
business, ”Strategy” in business is given with various definitions as following:
”Strategy is model about targets, purposes and plans to get that target”’
(Kenneth L.Andrew – 1965)

”Strategy incudes primary and long term target assignment of business, at
the same time, chooding the way and action progress and distributing the essential
natural resources in order to serve that target”.
(Afred Chandler)
”Strategy is ways and transportation means which are used to archieve the
targets which have been defined through policies”.
(General Ailleret)
”Strategy is the trends or plans to combine targets, main policies and action
program for organization to become the unified body”.
(Quinn, 1980)
”Strategy is a harmonious combination between the activities and human
resources distribution in order to archieve the organizational target. Organzation’s
strategies are the efforts to take advantages the abilities and human resources to
react suitably with oppotunities and threats of external environment”.
(Bateman and Zeithaml, 1990)

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”Strategy includes targets, policies and plans”.
(Dess and Miller, 1993)
Although there are some difference in th above definitions, all of them
mention about the overall target, policies and action plans which are assigned
precedently of the organization. In 1987, Mintzberg has given out the definition of
strategy like: ”Strategy is plan, genral trend, position and visibility”
- Business plan:

+ According to this definition, strategy is target, policy and program which
are assigned presciently by organization.
- Strategy is plan and strategy:
+ All organization has intention to carry out in order to overcome the
competitive competitors
- Strategy is trend :
+ It is impossible to assigned in advance, be announced but it can be
considered as strategy if organizational behaviors have the common trends.
- Strategy is position :
+ Business’s position in the environment, especially in the comparison with
the competitors is an important factor in the strategy. According to this definition,
strategy is the consistence among internal factors in business and environmental
factors. Business’ position can be defined and developed through action plan and
trend.
- Strategy is visibility
+ According to this definition, strategy is initially ideas, they live in the
imagination and creativity of managers. What is more important is that ideas need
to be shared with other members in organization.
Combining the different various definitions about strategy as above, we can
understand the strategy definition as following :

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« Strategy is the process of building and developing the stable competitive
advantages by defining the organization position in the business world as well as

developing and using strategic human resources efficiently ».
PhD. Vu Thanh Hung – Chief editor, PhD. Nguyen Van Thang ; Strategic
management course book – Education Publisher)
1.1.2. Strategic levels
There are three strategic levels in each business: Company strategy, business
strategy and functional strategy.
- Company strategy:

+ Company strategy is the strategy mentioning about overall company. It
mainly mentions about product items and diversification trends in order to make use
of the company’s strengths at most. Speaking in other ways, the main question for
company strategy is “Which industry should organization compete?”
- Business strategy:
+ Business strategy is considered as the product strategy or competitive
strategy, because business’ competitions in market are really the competitions in
each products. The business strategy for each product have to answer all the
following question: which target needs to be archived? The necessary competitive
advantages to archive that target? Who are the main competitors and so on. The core
in business strategy is defining and developing the competitive advantages in the
market.
- Functional strategy:
+ The functional strategies like marketing, finance, human resources
management and so on need to be combined each other in order to get the
competitive advantages in business strategy. The cores in functional strategy is
defining the value added that each function can bring to customers as well as
strategy in higher level.

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In the scope of this composition, I will deeply analysis to direct and plan the
business strategy in business.
1.1.3 Strategic procedure
Strategy is a series of complex actions in order to call the human resources of
an organization and archive the consistent purpose. The planning often complies the
consistent procedure including various steps which have close logic relationship.

Strategic planning procedure
Functions & strategic targets of
business (1)

Internal analysis in
business (S,W) (3)

Business
environment
analysis (O,T) (2)

Chosing strategies (4)
Company level strategy (5)
Business strategy &
Functional strategy
Carrying out strategies (6)
Checking & evaluating performance
result (7)
Feedback

information

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1.2. Models in strategic building
There are many tools to analyze the relationship between business and
market, there are also many analyzing tools which can help businesses defining
their strengths and weakness as well as opportunities and threats coming from the
business environment, from this point, company can find the directions and define
the right strategy for business. These analyzing tools are all called strategic analysis.
They are very useful in defining the competitive advantages and positions of
business in market, at the same time defining the direction and target need to be
archived.
1.2.1. Environmental analysis models
1.2.1.1. PEST Model – General environmental analysis model
The general environmental analysis model PEST is to define the primary
factors in environment which can have effects on business activities and evaluating
the effects of environmental factors. From this point, business can take advantage of
choice and limit risks in order to give out the suitable strategic direction for
business.
Politi
cal

Technolo
gical

Environ
ment

Economi
c

Socia
l

Figure 1.1: PEST analysis model

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- Political factor:
Government’s policies like tax, administrative procedure, preferential
treatment, investment encouragement, legal system.
- Economic factor:
Economic factor is the criteria for national economy like economic growth;
GDP; GNP; inflation rate, investment speed, infrastructure
- Social factor:
Is the cultural factors, customs, habits or social values
- Technological factor
Is the technological level of economy and development of infrastructure
Pest’s targets is to :

- Define the primary factors of environment affect directly to organization.
- Evaluate various effects of environmental factor to organization, including
in the history as well as in the future.
1.2.1.2. Five Force model of Michael Porter – Industry analysis model
Professor Michael Porter gave the Five Force model in order to analysis the
direct competitive factors in business’s industry, they are direct competitors,
potential competitors, substitutes; suppliers and buyer.
Potential
competitors
Threat of potential competitors

Suppliers

Seller power

Current
competitors

Buyer power

Customers

Substitute’s threats

Substitutes

Figure 1.2: Five Force Model of Michael Porter

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- Potential competitors:
Potential competitors are the threat to business in industry and they are able
to scramble for market from the current businesses. The greater and greater business
density, the higher competition, and market will become fiercer.
However the penetration in new market requires that the potential
competitors have to overcome the integration wall. The easy or difficult levels
depend on each industry, and there are some barriers like: production performance
under scale; product differences; requirements about investment capital and ability
to establish the distribution channel.
- Negotiation power of suppliers:
Suppliers can react to the potential benefits of industry of businesses in
various ways. They can impact on price, quality, input materials. The small or big
reaction levels depend on the following factors:
+ Regulations made by some suppliers
+ The greater concentration with customers
+ Scare of substitutes
+ Customers lack of relevant importance considering with suppliers
+ The product differentiate level of suppliers is high
+ The expense for customer is high
- Negotiation power of customer:
Customers play important role in the existence and development of business.
Customer power depends on some relevant factors like suppliers with the vice verse
reaction.
- Thetas to substitutes:
Customer’s demand can be satisfied in various ways. The appearance of

substitutes can change the total market value of one industry. The analysis and
estimation for substitutes can help business to define the strategy to cope with
efficiently when the industry is narrowed and not grown.
- The competitive density of competitors in industry:

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Each industry has different competitive densities but they are all high in
common. These competitions are in the form of price competition, product
difference, flexible supply capacities and other services. The fierce competition is
the efficiencies of mutual reaction of the following factors:
+ Equivalent competitors
+ Slow growth
+ High fixed expense
+ Lack of goods differences
+ High leaving expenses
This competition forces also react to businesses during the operation
procedure, so business has to always analysis all the above actions, and have the
adjustment about strategic direction suitably. The business who does not know
clearly and can evaluate the competitive force in order to give the wrong strategies
1.2.1.3. Life cycle of industry
Industry also has life cycle like product when mentioned industry is the
product group which can be easily replaced to satisfy one demand. The following
figure illustrate the four development phases of industry according to the revenue
development

Emerge

Grow

Satire

Decline

Revenue

Time

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Figure 1.3: Life cycle of industry
- Phase 1: Emergent phase
Is the period that industry has been formed and the main characteristics of
this period is:
+ Not stable technology
+ Not have the stable development strategy
+ Many businesses are established
+ New buyers
+ Are able to make short-term plan
- Phase 2: Growth period
In this period, market has accepted and got acquainted with products, the

main characteristics of this period are:
+ Rapid number of buyers
+ Products have the differences about techniques and usage
+ Mass production
+ Many competitors
- Phase 3: Staring period
This is the period that market archives the highest consumption about
product and some characteristics of this period:
+ Slow growth and many competitions about market share
+ Repeat customers and have much more experiences
+ Competitions in prices and services
+ Difficult in having more products and new application
+ International competition
+ Profits of distributor’s decrees but their powers are increasing
- Phase 4: Declining phase
Is the decline phase in industry in order to give place to other industries to
satisfy better customer’s demands, and characteristics of this phase are:
+ Decline in revenue

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+ Low profits
+ Decrease the product item
+ Decrease advertisement
+ Competitor number declines

Each period in the life cycle of industry has different characteristics, so the
life cycle analysis of industry helps business have overall visibility about industry,
and industry can choose the different strategies depending on each development
phase depending on taking advantages of business.
1.2.2. Internal business analysis model
1.2.2.1. Value chain model of Michael Porter - Internal business analysis model
The value chain model helps to analysis systematically all the business
activities. From that, we can define the strengths and weakness of business. This
model is supposed the main economic activities like creating values, business
activities are divided into the different sections which contributes to make values.
There are two main activities : direct activities and supporting activities

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Supporting
activities

22

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Value chain model

Company
infrastruture

lu
Va

Human resources
management

ed
dd
ea

Technological
development

Services

Marketing and
sale

External
logistic

Production

Va
lue
a

d
de
d

Internal
logistics

Supply

Main
activities

Figure 1.4: Value chain
- Direct activities:
Direct activities are the activities to the material changes of products to the
procedure of selling, product transfer to customers and after-sale services. Direct
main activities:
+ The input supply is through:
- The credit of receiving system, material and reserve management
- The efficiency of material supply
+ Operation installation will analysis about:
- Working capacity, the efficiencies in using machines and instruments of
business comparing with the main competitor
- Automation suitable with production procedure

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- Managing production system in order to improve the quality and reduce
expenses
- The efficiencies of factory allocation and product transfer
+ Output supply is evaluated by:
- Time, efficiencies of goods and services supply
- Efficiencies of final product storing and supply
+ Marketing and selling focus on:
- Market research activities in order to define the customer demand and
suitable market segment.
- Promotion, advertisement
- Designing, evaluation the efficiencies of distribution channel
- Organizing, training and encouraging the selling force
+ Customer services:
- After sale services
- Services in instructing customers
- Abilities to supply spare parts
- Supporting activities:
Supporting activities do not directly make product value. They are to help
direct activities to carry out with high efficiencies. Operations include:
+ Human resources management: all the recruitment, training and promotion
activities:
- The system of reward, penalty and encourage staff
- Creating the working environment in order to decrease the absence rate and
leave business
+ Technology development
- Research and implementation activities
- Relationship between research department and other departments
- Qualities of laboratory and other devices

- Knowledge and experiences of technical and science staff

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- Creative working environment in business
+ Goods purchase:
- Discovering and finding the various material sources in order to reduce the
dependence on supply sources about time, expense and quality.
- Procedure in trading materials and instruments
- Building standards in order to choose between buying, self producing or
leasing
- Creating good and long term relationship with important supply.
+ Infrastructure
- Ability to define the market opportunities or new products as well as
potential threats.
- Systemize strategic plan in business
- Combination among units in business
- Ability to find the capital sources which have low expenses in equipment
investments as well as operation capital.
- Management information system helps the procedure to give decision
- Relate with the non-governmental organiazation and other relevant
organizations
Value chain analysis is used to evaluate each operation of business, from this,
strengths and weakness can be defined and the main process in creating customer
value as well as business is also defined, an the procedure can prevent this

procedure. Through value chin analysis, leaders can have the general view in the
operation procedure.
Value chain can also help business in defining the primary successful factors
– the decisive operations to the success of enterprise and the factors that any
business who wants to be successful can not ignore.
1.2.2.2. 7S Model of Mc Kinsey – organizational analysis model
7S model helps managers to analysis in details about business organization
and have great influence on the competition of business in the market.

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