Building the business strategy for bao minh phu tho during 2021 2025

ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------

TRIỆU GIANG NAM

BUILDING THE BUSINESS STRATEGY FOR BAO
MINH PHU THO DURING 2021-2025
XÂY DỰNG CHIẾN LƯỢC KINH DOANH CHO CÔNG
TY BẢO MINH PHÚ THỌ GIAI ĐOẠN 2021-2025

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2021


ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------

TRIỆU GIANG NAM

BUILDING THE BUSINESS STRATEGY FOR BAO
MINH PHU THO DURING 2021-2025
XÂY DỰNG CHIẾN LƯỢC KINH DOANH CHO CÔNG
TY BẢO MINH PHÚ THỌ GIAI ĐOẠN 2021-2025

Chuyên ngành: Quản trị kinh doanh
Mã số: 8340101.01
LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS.HỒNG ĐÌNH PHI

HÀ NỘI - 2021


DECLARATION
I now undertake that it is my thesis work throughout the research and learning process.
The data and results stated in the thesis (including evidence, diagrams, tables, pictures, and
other documents) are truthful and have not been published in other works.
If it does not comply with the above, I take full responsibility to the Thesis Appraisal Council,
the Faculty of Management, and Business - Hanoi National University for my topic.

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ACKNOWLEDGEMENT
I would like to express my deep gratitude to the teachers and staff at the Faculty of
Administration and Business - Hanoi National University to teach and create favorable
conditions for me to take a master's class in Business Administration.
I would like to thank my supervisors for their whole guidance and suggestions
throughout the thesis making process. Mostly my supervisor Associate Professor, Dr. Hoang
Dinh Phi was patient, motivated, inspired, passionate, with a vast source of knowledge,
continuously supporting me throughout the process of studying and researching the thesis.
Finally, I would like to thank the leader board and colleagues of Bao Minh Phu Tho
Insurance Company for helping and facilitating me in collecting data to do this thesis.

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ABBREVIATION

ADB

: Asian Development Bank

ASEAN

: Association of Southeast Asian Nations

BH

: Insurance

BM

: Bao Minh Joint Stock Corporation

BMPT

: Bao Minh Phu Tho Company

DN

: Enterprise

DVBHHD

: Modern Insurance Service

EFE

: External factor evaluation

EVFTA

: EU-Vietnam Free Trade Agreement

GDP

: Gross domestic product

IFE

: Internal factor evaluation

IMF

: International Monetary Fund

IT

: Information technology

JSC

: Joint Stock Company

KDBH

: Insurance Business

KDDV

: Business services

MGBH

: Insurance Broker

PJICO

: Petrolimex Joint Stock Insurance Company

PTI

: Post and Telecommunication Joint Stock Insurance Corporation

PVI

: PetroVietnam Insurance

SMEs

: Small and medium business

SOEs

: State enterprises

SWOT

: Strengths, Weaknesses, Opportunities, and Threats

TTP

: Trans-Pacific Partnership

WTO

: World Trade Organization

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TABLE OF CONTENT
DECLARATION ........................................................................................................................i
ACKNOWLEDGEMENT ....................................................................................................... ii
ABBREVIATION .................................................................................................................... iii
LIST OF TABLES ....................................................................................................................vi
LIST OF FIGURES ................................................................................................................ vii
INTRODUCTION ....................................................................................................................vi
1. Rationale ........................................................................................................................................ 1
2 Aims of the Research...................................................................................................................... 2
3. Survey and research methods ...................................................................................................... 3
3.1 Data collection methods .......................................................................................................... 3
3.2 Objectives of the survey ............................................................................................................ 4
3.3 Data synthesis method............................................................................................................... 6
4. Object and scope of research........................................................................................................ 8
CHAPTER I: BASIC THEORY OF BUILDING STRATEGY ................................................. 11
1.1 Business strategy ..................................................................................................................... 11

1.1.1 The concept of business strategy ...................................................................................... 11
1.1.2 Characteristics of business strategy:................................................................................. 12
1.1.3 The role of business strategy ............................................................................................ 12
1.2 The role and objectives of the strategy management: ............................................................. 13
1.2.1 The role of business strategy management....................................................................... 13
1.2.2 The system of strategic objectives.................................................................................... 14
1.2.3 Principles when defining goals ........................................................................................ 14
1.3 Classification of business strategy .......................................................................................... 14
1.3.1 General business strategies............................................................................................... 14
1.3.2 Segment (functional) business strategies ......................................................................... 19
1.4 Main tools for building a business strategy ............................................................................. 22
1.4.1 External Factor Matrix (EFE)........................................................................................... 22
1.4.2 Internal Factor Matrix (IFE) ............................................................................................. 22
1.4.3 SWOT Matrix................................................................................................................... 24
1.5 Building and Selecting Business Strategies ............................................................................ 25
1.5.1 Quantitative Strategic Planning Matrix (QSPM) ............................................................. 25
1.5.2 Organization and implementation .................................................................................... 27
1.5.3 Evaluate the setup strategy performance .......................................................................... 27
CHAPTER II: ANALYSING AND SELECTING BUSINESS STRATEGIES FOR BAO
MINH PHU THO COMPANY IN THE PERIOD 2021-2025 ..................................................... 28
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2.1 Overview of the Vietnam Insurance market ............................................................................ 28
2.1.1 Overview of economic development in Phu Tho province .............................................. 28
2.1.2 Development trend of Vietnam Insurance market and Phu Tho province ....................... 30
2.2 An overview of Bao Minh Phu Tho Company........................................................................ 39
2.2.1 Brief Introduction of Bao Minh Phu Tho Company ........................................................ 39
2.2.2 The current business performance of Bao Minh Phu Tho Company ............................... 44
2.3 Analysis of factors affecting business strategy of Bao Minh Phu Tho ................................... 55

2.3.1 Macro environment analysis ............................................................................................ 55
2.3.2 Micro environmental analysis (insurance industry) ......................................................... 60
2.4 Synthesize results of environmental analysis and building SWOT matrix formation ............ 66
2.4.1 Analyzing big competitors and generalizing competitors’ matrix ................................... 66
2.4.2 Generalizing the competitors’ matrix ............................................................................... 70
2.5 Assess the impact of factors external and internal factors that impact on BMPT ................... 71
2.5.1 Assessment of external factors (EFE) of the Company.................................................... 71
2.5.2 Evaluation of internal factors (IFE) of Bao Minh Phu Tho.............................................. 72
CHAPTER III: BUILDING BUSINESS STRATEGIES FOR BAO MINH PHU THO COMPANY
........................................................................................................................................................... 75
3.1 Strategic objectives of Bao Minh Phu Tho in the period 2021 - 2025 .................................... 75
3.1.1 General objective.............................................................................................................. 75
3.1.2 Development Strategy ...................................................................................................... 76
3.1.3 Business philosophy ......................................................................................................... 76
3.2 Building general business strategies........................................................................................ 77
3.2.1 Centralized stability strategy ............................................................................................ 77
3.2.2 Integrated Development Strategy ..................................................................................... 79
3.3 Building functional Business Strategies .................................................................................. 80
3.3.1 Selecting and building a strategy for Bao Minh Phu Tho until 2025 applying the SWOT
matrix model ............................................................................................................................. 80
3.3.2 Basic solutions to building the business strategy of Bao Minh Phu Tho to 2025 ........... 84
CONCLUSION AND RECOMANDATIONS .............................................................................. 95
CONCLUSION ............................................................................................................................ 95
RECOMANDATIONS ................................................................................................................. 96
REFERENCES .............................................................................................................................. 102
APPENDIX 1: SURVEY BOARD ............................................................................................... 104
APPENDIX 2: RESULTS OF DATA PROCESSING ............................................................... 106

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LIST OF TABLES
Table 1 1 External factor matrix ............................................................................................... 22
Table 1 2 Internal Factor Matrix............................................................................................... 24
Table 1 3 SWOT Matrix Table ................................................................................................. 24

Table 2 1 Human resource situation of Bao Minh Phu Tho ..................................................... 45
Table 2 2 Current status of agent system development in Bao Minh Phu Tho ........................ 50
Table 2 3 Some fundamental financial indicators of Bao Minh Phu Tho ................................ 52
Table 2 4 Some indicators of insurance premium revenue of Bao Minh Phu Tho .................. 54
Table 2 5 Some indicators on the cost of insurance claims of Bao Minh Phu Tho.................. 55
Table 2 6 Portfolio of Non-life Insurance Market in Vietnam 2018 ........................................ 57
Table 2 7 Some key business indicators of Phu Tho province's insurance companies in 201964
Table 2 8 Competitive image matrix of Bao Minh Phu Tho .................................................... 70
Table 2 9 Matrix of evaluating external factors of Bao Minh Phu Tho ................................... 72
Table 2 10 Matrix of evaluating internal factors of Bao Minh Phu Tho .................................. 73
Table 2 11 SWOT analysis table of Bao Minh Phu Tho Company ......................................... 81

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LIST OF FIGURES
Figure 2 1 Total life insurance premium revenue in Vietnam 2016-2019 ............................... 33
Figure 2 2 The proportion of premium revenue by operation of insurance in 2019 ................ 34
Figure 2 3 Market share of Vietnam non-life insurance ........................................................... 34
Figure 2 4 The proportion of premium revenue by operation of insurance in 2019 ................ 36
Figure 2 5 Market share by premium revenue in 2019............................................................. 36
Figure 2 9 Organizational structure model of Bao Minh Phu Tho ........................................... 41
Figure 2 10 Revenue from primary insurance premium is generated by the operation group of
BMPT 2016-2019 ..................................................................................................................... 44

Figure 2 11 Total premium revenue 2018 - 2019 ..................................................................... 56
Figure 2 12 The proportion by operation of Vietnam Non-Life Insurance market 2018 ......... 56
Figure 2 13 Market share of the non-life insurance market in Phu Tho province 2016 - 2019 63

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INTRODUCTION
1. Rationale
Before 1993, the Insurance market of Vietnam had only one state-owned insurance
enterprise (DN), Bao Viet. There were 61 insurance companies on the market, including Bao
Minh Joint Stock Corporation (Bao Minh). On November 28th, 1994, Bao Minh was the first
insurance company established by Decree No. 100/1993 / ND-CP dated December 18th,
1993. At the beginning of forming Insurance market of Vietnam with the functions and scope
of business: non-life insurance; Non-life reinsurance; Financial investment, and other
activities as prescribed by law.
After 25 years of development, and have been growing up. Bao Minh has become Bao
Minh Joint Stock Corporation including 62 subsidiaries, including Bao Minh Phu Tho
Company with 550 Transaction Offices, spread out across the country. Gradually
demonstrating on the role of a shield against risks, help organizations and individuals to
quickly stability production, doing business, and life, as a long-term choice and creating jobs
for thousands of workers.
In the first months of 2020, the COVID-19 as a disaster, it shakeups all aspects of
socio-economic life. In Vietnam Report gave comments on the Insurance industry - the
growth situation and changes to adapt in the context of "new normal." Accordingly, the
insurance market last year continued to maintain high and stable growth, contributing to the
common goal of building a healthy national financial system, ensuring financial security and
stability macro-economic regulation.
As Like as many other economic sectors, according to a survey of the Vietnam Report
assessing the impact of COVID-19 on insurance enterprises, it showed that the epidemic

caused insurance companies' leaders to review and re-evaluate the model. Their distribution
through three aspects: Customers, sales force, and support (such as investing in data and
digital tools), helps insurers prepare for unpredictable risks.
More than half of insurance companies report that decisions related to risk
management, human resource management, service management, and customer support,
customer outreach, and digital transformation change step by step with the disease's outbreak.
Insurance companies wish to do business successfully and create brand names in the
market have all identified and built their business strategies from the beginning. Strategy
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building is the process of defining goals, business philosophies, formulating strategies, and
plans to allow businesses to change, Improving, and affirm their position in the marketplace.
Bao Minh Phu Tho Company is also not an exception. To ensure a sustainable
development, building the business strategy must be paid more attention recently issue today.
From all of above problems, the author decides to choose the master's thesis topic.
" Building the business strategy for Bao Minh Phu Tho Company during 2021-2025.‖
With the desire to base the current situation to give directions, strategic solutions to
solve difficulties promote the construction, completion, and implementation of its business
strategy more effectively.
2 Aims of the Research
Building the business and develop strategy of Bao Minh Phu Tho Company to 2025 to
ensure doing business efficiently and have a sustainable development. Identify objectives,
assessment of the factors that affecting current status of Bao Minh Phu Tho Company's in
business strategies in recent years.
Propose solutions for building the business strategy for Bao Minh Phu Tho Company
to 2025. Systematize the fundamental theoretical issues of position, role, functions, and
strategy and business strategy development tasks to apply in practice to build Bao Minh Phu
Tho's business strategy.
Clarifying the status of the business strategy building of Bao Minh Phu Tho Company

over the past time. Constructing concepts and views on completing Bao Minh Phu Tho
Company's business strategy and setting out criteria to evaluate Bao Minh Phu Tho's current
status of business strategies from economic perspectives, society. The thesis proposes a
system of views, orientations, and solutions for building Bao Minh Phu Tho Company's
business strategy to 2025.

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3. Survey and research methods
Introduction to the research scheme
Theoretical
basis and
tools to
support
BMPT's
business
strategy
research

Surveying
the current
status of
BMPT's
Delta Project
model and
strategy map.

Commenting,
evaluating current

strategy and
proposing
BMPT's strategy
through Delta
Project model,
Strategy map and
SWOT analysis
model

Solutions to
building
BMPT's
business
strategy to
2025

Research diagram of the business strategy of BMPT
Based on the knowledge of Strategic Management subject, primarily through the Delta Project
model, Strategy map, SWOT analysis model, and other supporting services, I conduct a
survey and analyze the current economic strategy status. business of Bao Minh Phu Tho
proposing a development strategy to 2025.
3.1 Data collection methods
Data sources for evaluation research are collected from two sources:
(i) secondary data collected from reports, research results, and official published data of
agencies and organizations.
(ii) primary data was collected through direct surveys using questionnaires.
Collect secondary data
Secondary data were determined through annual statistical and analytical methods of BMPT.
These data are collected from the functional departments of BMPT, such as the Finance
Department, the Prevention plan; The Organization Department includesBMPT's audited

annual financial statements (source: Accounting Department).
Insurance industry growth forecast (source: Planning Department).Human resource plan
BMPT (source of supply: Department of Organization and Personnel).Collecting and
calculating from published data of central statistical agencies, research institutes, universities,
journals, specialized newspapers and published scientific reports, domestic and international
studies, documents issued by Bao Minh, agencies of Phu Tho province with data and
3


assessment of the insurance industry's performance and issues related to Bao service
development dangerous.
Collect primary data
Due to the limited time, the author only focuses on collecting primary data through that
method of interviewing and surveying customers:The interview will specialize in four criteria:
Finance; Customer; Internal; Training, and development. Interview time at the end of the
meeting, interview time: 15-20 minutes.Collected directly from customers through surveys
and surveys by questionnaires, periodic business performance reports of the unit.
Sample investigation
The survey was conducted in Phu Tho province, including 200 samples:Business customers:
50 samples. Individual customers as employees, students, business people: 150 samples.The
selected samples are large enough, ensuring the representativeness for customers, for each
region, and both representative and broad for the whole province of Phu Tho. Because the
number of individual customers coming to banking transactions is greater than that of
corporate customers, the sample of individual customers will account for more (150 samples)
than the sample of business customers (50 samples ).
3.2 Objectives of the survey
The survey aims to evaluate the development of modern insurance services of BMPT in the
insurance market of Phu Tho province, and at the same time assess the satisfaction level and
the factors that influence and dominate current insurance services. BMPT. Since then,
research and find solutions to develop modern insurance services of BMPT.

Methods of implementation
Sample selection: Apply random sampling, select regions according to the following table:
Subject

Number of samples

Ratio (%)

Total

Enterprise

Individual

Total

200

50

150

100

TP. Viet Tri

80

20

60

40

TX. Phu-Tho

70

20

50

35

Lam Thao district

50

10

40

25

The number of samples surveyed at research sitesViet Tri City, Phu Tho Town, Lam Thao
District is the 3 locations selected for investigation because they are 3 locations with BMPT
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transaction space, densely populated areas living in the city. The town has large universities,

industrial parks, and factories contiguous and guaranteed to represent other Phu Tho
provinces.
+ Individual customers: Individuals are selected for the survey by stratified random sampling
according to the following criteria:
(i)

Gender;

(ii)

Age;

(iii)

Educational attainment. The quantity and structure ratio are as follows:(Investigation

of 150 individual samples)

Content

Sex

Age

Male Female < 22

Education level

22-30 30-55

> 55

PT

TC Graduate

After

Samples

75

75

15

25

78

32

17

67

51

graduate
15

Ratio (%)

50

50

10

17

52

21

11

45

34

10

The number of individual samples surveyed according to the criteria+ Corporate customers:
Enterprises are selected for investigation according to (i) Type of activity: Private enterprise
(private enterprise, joint-stock company (JSC), state-owned enterprise (SOE); (ii) The
quantity and structure ratio are as follows:
(Survey of 50 enterprise samples)
Content

Type of enterprise

Operation time

Private

JSC

SOE

<3 year

3-5 year

5-10 year

>10 year

Sample

27

18

5

13

15

9

13

number
Ratio
(%)

54

36

10

26

30

18

26

Number of enterprises surveyed according to the criteria
- Contents of the questionnaire:
The questionnaire contains primary information such as (i) General information with the
contents of Gender, age, education (for individuals) and business sector, type of business,
time of operation (for business); (ii) A survey with questions to identify Insurance services in
Phu Tho province, assess the reliability and preference, satisfaction with current services of
customers, evaluate of customers on the quality of BMPT's products and services. This
5

information is represented by specific questions for the person to understand and answer
correctly and completely.
3.3 Data synthesis method
We will analyze and select the necessary factors to synthesize into valid data with a scientific
basis from the collected data. Include:
Statistical classification method to systematize and synthesize documents according to criteria
suitable for research purposes.
Processing and calculating data, research indicators were conducted on computers using Excel
software and related application software.
Graphical method: Using modeling information from numbers to graphs. Using graphs from
data tables provides users with information to access and analyze information on the topic
more easily.
Descriptive statistics method
A method of studying socio-economic phenomena describes the volatility and the
development trend of socio-economic phenomena through collected data. This method is used
to calculate and evaluate the research results from the questionnaires.
SWOT analysis method
SWOT is an abbreviation set of the first letters of the English words: Strengths, Weaknesses,
Opportunities and Threats - a famous model in the classification of area.SWOT analysis is the
analysis of strengths, weaknesses, opportunities, challenges for an organization or an
individual. It is a tool in strategy building, comparing and evaluating options, ... for
organizations or individuals
Using SWOT analysis model to assess SME development's current situation, analyze
strengths, weaknesses, opportunities, and challenges, thereby proposing solutions to
Improving and develop services at BMPT.
Theory of SWOT model:
(Strengths - S)

(Weaknesses - W)

(Opportunities - O)

(Threats - T)

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Strengths: BMPT's advantageous factors can enhance insurance services.Weaknesses:
BMPT's weaknesses in management capacity, capital, technology, network, human resources
... affect the Insurance service that BMPT can overcome.
Opportunities: Advantages brought by the external environment for BMPT.
Challenges: Constraints for BMPT's service development.
Comparative method
Adopt the mean, the frequency, the maximum, and the minimum. Comparative statistical
methods include comparing absolute numbers and comparing relative numbers to evaluate
phenomena' developmental dynamics, things over time and space. After calculating the data,
we compare the customers' assessment of current insurance services among the insurance
companies in the area, thereby assessing the current state of quality modern insurance services
of BMPT.
Methods of experts, monographs
Use relevant documents, consult experts in the evaluation analysis process to find out
scientific and accurate conclusions.
Support tools
The author will rely on many models for analysis, such as:
PEST model is used to analyze the macro environment;
Michael Porter's five-force competitive model to analyze the insurance industry's
environment;
Analyze the internal and external environment of BMPT using SWOT analysis model to

exploit strengths, seize opportunities to overcome challenges, and overcome weaknesses to
Improving competitiveness, from which to propose the options to building the strategy.
Research indicator system
Proposing a system of specific indicators to analyze and evaluate the strategy and the status of the
strategy implementation, thereby specifying the strategic issues that need to be built for BMPT:
The system of criteria to evaluate the results and scale of production and business activities,
market share of service provision over the years

7


- Market share of local name service providers: this indicator shows the market share of local
services over the years (%).
System of agents, branches of the unit in the area over the years.Economic growth rate, the
socio-cultural situation of the locality.Per capita income.
Competitors in the area; this indicator is to analyze and evaluate direct and indirect
competitors in the area
System of indicators to evaluate the efficiency of human resource useNumber of officers and
employees over the years.
Labor productivity.
The efficiency of labor use according to revenue/profit.
Effective use of labor according to salary and income fund.
Labor efficiency by salary/output and revenue fund.
Investment in science, technology, recruitment, staff training ...Financial indicators, assets,
business results for the years 2016-2019Indicators of assets, capital sources, revenues, costs,
revenue and expenditure differences: Financial and asset indicators: this indicator shows data
on assets, capital sources in the units over the years; the Unit of calculation is million dongs.
Business performance results: this indicator shows the unit's unit results over the years
(annual income and expenditure difference).
The formula and calculation unit are as follows:

Business results (million VND) '= Total revenue - Total cost2.5. Limitations and difficulties
in implementing research methods
Analysis and evaluation of the business development strategy of BMPT are mainly based on
secondary documents. Also, because of the short time of the study, it was not possible to
investigate, collect documents and information from all research subjects; Therefore, it is
difficult to analyze the current development quality of BMPT comprehensively.
4. Object and scope of research
4.1 Object of research:
-Systematize the strategy management issues

8


-Conduct macro, micro and local environment analysis to recognize the opportunities and
challenges as well as strength and weakness, directly affecting Bao Minh Phu Tho’s

development and competitiveness
- Setup the strategic objectives for Bao Minh Phu Tho Company from now to 2021 with
vision to 2025 and propose the solutions to fulfill such objectives.
4.2. Scope of the research:
- About the research content: The thesis focuses on research: analyzing the factors affecting
the current status of Bao Minh Phu Tho Company's business strategy.
- About the research object: the process of building business strategy of Bao Minh Phu Tho
Company.
- Regarding the research period: Data is used for the analysis of the situation 2016-2019.
4.3 Research methodology
The research is based on the dialectical materialistic methodology to research the
production and business process of the Company. Besides, the methods: statistics, analysis,
modeling, forecasting are also used to analyze and evaluate and make strategic development
directions in the Company.

Clarify the requirements of the topic, the author focuses on solving problems to
answer three big questions:
How Bao Minh Phu Tho's business strategies built? What are the bases for building
business strategies of Bao Minh Phu Tho?
Bao Minh Phu Tho's business strategies are optimal and appropriate in the context of
the current period to 2025?
What solutions does BMPT need to build its business strategies?
5. Thesis structure
In addition to the opening chapter, conclusion, references, structural thesis into three
chapters:
Chapter I: Basic theory of building strategy
Chapter II: Analysing and selecting business strategies for Bao Minh Phu Tho Company in
the period 2021-2025
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Chapter III: Building business strategies for Bao Minh Phu Tho Company

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CHAPTER I: BASIC THEORY OF BUILDING STRATEGY
1.1 Business strategy
1.1.1 The concept of business strategy
The term strategy is derived from military art. There are also many concepts in the
military about strategy. "Strategy is an art of fighting only in a dominant position," said
Clausewitz. "Strategy is the art of commanding means to victory" in an old publication of
Larousse's dictionary. In the military field, the term strategy has been seen as an art of
commanding to win a war. Napoleon said, "The art of war is a simple art, but all must be
obeyed." That shows that in the military is extremely necessary, an indispensable condition

for victory.
Nowadays, the term strategy is used quite popularly in socio-economic life, both on
the macro and micro scale. There are quite a few different approaches to this concept.
"Business strategy is the art of creating a competitive advantage," said Michael Porter, a
Harvard University professor. Thus, business strategy is one way to compete among
businesses; it is a measure for businesses to achieve their set goals by building competitive
advantages or building construction—strengths, opportunities, risks, challenges, and
appropriate solutions to win business.
According to the advisory group of consulting firm Boston Consulting Group (BCG)
stated: ―Business strategy is the allocation of available resources to change the balance of
enterprises' available resources and change competitive position on my side.‖ That is the
enterprise from analyzing its resources, analyzing the business divisions, and then allocating
the most optimal resources, from which goals, measures to achieve the goals with efficiency
highest strength to compete.
Alain Charles Martinet, the author of the book "Strategy," who received the grand
prize of Harvard Expansion in 1983, thought: "Strategy is the art that businesses use to fight
competitors and win." So the strategy is to outline steady and long-term trajectories of
progress around that trajectory that could be about to reach the business's correct decisions
and actions.
Thus, through the above concept of strategy, we can consider: "Strategy is the
business direction to achieve the business's set goals." Business strategy is seen as a principle,
a principle in business. Therefore, if businesses want to be successful in business, the
prerequisite must have a business strategy or an organization to implement a good strategy.
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1.1.2 Characteristics of business strategy:
Although there are many different conceptions and approaches to the strategic category, its
essential characteristics are relatively unified. The basic features are:
+ Business strategy is oriented for a long time; it sets out business goals and directions for

each specific product industry and clearly defines the necessary tasks, solutions, and steps to
achieve the set goals.
+ Business strategy is very flexible and diversity. Because the business strategy is built base
on forecasting the future market, the market is always volatile. For the right strategy to help
businesses achieve their set goals, the strategy must be flexible in the term of market changes.
+ Business strategy is built for a long time (5 or 10 years), so the business strategy is the
roadmap, for a long-term strategy, it will often be concretized by those shorter-term
strategies—also known as a plan.
+ Business strategy is a continuous process from construction to implementation, inspection,
and supervision.
+ Business strategy always brings the idea of moving forward to win the competitors.
Business strategies are formulated and implemented based on discovering and taking
advantage of business opportunities and corporate comparative advantages to achieve high
business efficiency.
+ All strategic decisions in building, implementing, evaluating, and adjusting the strategy are
focused on the group of senior administrators to ensure the accuracy of long-term decisions
and information confidentiality in competitors. Thus, from the above concepts and features,
we can simply understand: ―Business strategy is a process of defining overall business
development goals and using a combination of factors, technical factors, economic and
business organization to win the competitors and achieve set goals.‖
1.1.3 The role of business strategy
- Business strategy helps businesses identify their purpose and direction in each period, is a
guideline for all business activities. It helps business be more proactive instead of passive in
the future.
- The business strategy is given out to make every member of the business understand what to
do and commit to it. That can create support and promote employees' available capacities in
the business, clarifying each individual's responsibilities.
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- Business strategy helps businesses exploit their competitive advantages in the marketplace
to create a competitive advantage, thereby helping business members positively change from
the environment outside.
- Business strategy to help businesses effectively use tangible and intangible assets. For
example, in a business strategy set out for a business, there must be corporate uniforms, logos,
cultural activities, arts, sports ... that will create the strength of the Company and that it is the
intangible properties of the business.
- Business strategy is the basis for choosing a business plan, investment plan, technology
innovation, and market expansion ... Thus, if enterprises want to survive in the market, they
must have an appropriate business strategy to adapt frequent changes in the market. if they
want to win in the fierce competitors.
It once again affirms: Business strategy is the driving wheel for businesses to successfully
sail, the wind blowing the kites to fly high forever. Business strategy in the right direction is
an indispensable factor for enterprises' existence in the market mechanism.
1.2 The role and objectives of the strategy management:
1.2.1 The role of business strategy management
In today violation business environment, which often creates unexpected opportunities
and risks. The strategic management process helps us identify future opportunities and risks;
clearly define the direction, overcome the marketplace's challenges, and reach the future with
our efforts. Recognizing the desired results and future goals helps the manager and employees
understand what needs to be done to achieve success. It will encourage both groups to achieve
short-term achievements to better Improving the business's long-term welfare.
The strategic management process helps businesses connect the proposed plan and the
external environment. The greater the fluctuation, the more proactive the enterprise must try.
Businesses must build their strategic management system adaptive and change with market
fluctuations to survive and develop. Therefore, strategic management moves towards the
future, not accepting the market, but changing the business environment.
Thanks to applying the strategic management process that has brought the company
more success, businesses will associate their decisions with relevant environmental conditions
by predicting the market's movement trend. The achievements are the figures of sales, profits,

and stock growth level in the market ... Due to the increasing volatility and complexity in the
environment, businesses need to try to win the position, take the initiative, and increase the
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ability to prevent organizationally, minimize risks. In short, strategic management is a product
of modern management science based on a practical basis, summarizing many companies'
experiences. However, each business's success depends on the capacity of implementation,
implementation, and control of the internal system and is seen as the art of business
administration.
1.2.2 The system of strategic objectives
+ Strategic goal: To indicate a specific goal that the enterprise wants to achieve, which is
inferred directly from the mission function but more precisely and clearly, quantified into
numbers: growth, profitability, sales, market share… There are usually two types of goals:
short term and long term.
+ Long-term goal: is the complete desired result that the enterprise wants to achieve in a
period longer than a year, with specific contents: profitability, productivity, competitive
position, job development, community relations, Technology position, social responsibility.
+ Short-term goal: is the specific results expected by the enterprise in a cycle, quantified into
a number.
1.2.3 Principles when defining goals
Be clear in each stage of business development; There are interconnections and mutual
support; one goal does not obstruct another; Priority targets must be identified, showing the
hierarchy of objectives and tasks set for the business in each stage.
1.3 Classification of business strategy
Business strategies can be divided into two categories: general strategy and division strategy.
General strategies are execution strategies at the enterprise level, aiming to build an
enterprise's competitive advantage based on satisfying its top leader. Segment strategy is a
strategy implemented at the enterprise's functional departments to achieve the general
strategy's objectives.

1.3.1 General business strategies
1.3.1.1 Centralized growth strategy
a. Market penetration strategy
Is seeking growth in the current market with products currently in production can be
done in the following directions: Product Purchasing Power Increase: denotes the relationship
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between the frequency of purchases and the volume of purchases purchased per turn. To
increase purchasing power can convince customers to use the product more often or use each
time with more quantity. Entice competitors' customers: by marketing strategy with policies
on products, prices, places of consumption and promotions, after-sales services ...
Acquisitions, mergers of competitors: If other opportunities to increase market share are not
attractive, the firm may consider buying out or seeking to merge with one of its direct
competitors. Increase the overall market size by making those who have not previously been
consuming the products they operate (the relative non-consumer market) to seek those
products with marketing measures., stimulus measures ...
b. Market development strategy
Finding new markets to consume the products that the company is producing is very
important in order to expand the ability to consume goods and products: Finding markets in
new markets, including finding new distributors, expanding sales force or opening new sales
networks, or peer integration with a firm that needs another target market. Finding new target
markets: searching for entirely new target groups of customers within the existing market.
Also, developing new consumption channels or using new advertising means. Find new uses
for the product: the product has many uses that the firm can exploit. Each new use of the
product could create a whole new market, in which case the market strategy induces the
product's new life cycle.
c. Product development strategy
Product development strategies include developing new types of products for
consumption in existing markets or to existing customers. This strategy can be aimed at

individual products or entire business items. Separate product development:
+ Improving product features by improving, adding or rearranging features, the content of old
products.
+ Improving quality to increases product reliability, speed, durability, taste or other features
+ Improving designs, designs, sizes: Improving aesthetic appearance by changing colors,
packaging design, product texture.
Development of commodity structure:
The main option is to add new items or Improving existing products that are currently in
production in three ways:
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+ Stretching upwards: To add products to serve the upper part of the market, offering more
sophisticated products.
+ Two-way stretch: when the business occupies the middle position of the market, it is
possible to stretch in two directions by offering new products that serve both the upper and
lower parts of the market.
+ Filling the commodity structure: increasing the number of product categories in the current
structure.
+ Modernizing the structure of items: when the length of the item structure is still acceptable,
it is necessary to have adjustments to renovate the design or introduce new technology
applications.
+ Stretching upwards: To add products to serve the upper part of the market, offering more
sophisticated products.
1.3.1.2 Integration growth strategy
The integrated growth strategy is consistent with the goals and long-term strategies that
businesses are implementing, allowing them to consolidate and fully promote enterprises'
production and business capabilities. To implement Its strategy, businesses can associate,
enter into joint ventures with input factor suppliers, or undertake their products and services to
create an active position for production and business activities. The joint venture or

association will create strength and create a new business direction for products and services.
The integrated growth strategy includes:
a. Reverse vertical integration
Reverse vertical integration is that businesses seek growth by taking power or enhancing
control over inputs (materials, equipment, capital, human resources) to be fully active in
quantity, quality and time for production and business.
b. Forward integration link.
It is the strategy of holding power or increasing control over its products' output through the
distribution system. When consumers pressure businesses, consumption is slow. To solve this
problem, businesses must link up to ensure the particular consumption of their product
When implementing this strategic plan, businesses can set up stores to introduce and sell
products; or associate with consumer establishments.
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