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Analysis and evaluation of the current business strategy of Hanoi Beer Alcohol Beverage Corporation (habeco) - 1

MASTER OF BUSINESS ADMINISTRATION

(Bilingual)

Hanoi Intake 4


Master of Business Administration Program (Bilingual )

Class M14‐MBA‐EV4,HN


Subject code : MGT 510


Subject name : STRATEGIC MANAGEMENT


Assignment No. ( Essay No.) : GRADUATION PROJECT


Student Name : DO HUY HOANG


Student ID No. : E0900337


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Analysis and evaluation of the current business strategy of Hanoi Beer Alcohol Beverage Corporation (habeco) - 1


Student name DO HUY HOANG

Class M14 – EV4 – MBA

Course STRATEGIC MANAGEMENT

Course code MGT 510

Lecturer Dr. MICHAEL M.DENT Dr. NGUYEN VAN MINH

Instructor Dr. BUI DUC TUAN Essay number GRADUATION PROJECT

Deadline 07/23/2011

Number of words 11,438


STUDENT'S COMMITMENT

I confirm that I know and understand the examination regulations of HELP University and I guarantee that I have done this assignment honestly and in accordance with the regulations.


Date of submission: ……………...............................Signature:……..…………….................


NOTE

Teachers have the right not to grade papers without signatures.

Students will receive a score of 0 if they violate the above commitment.

MASTER OF BUSINESS ADMINISTRATION

Master of Business Administration Program


GRADUATION PROJECT

ANALYSIS AND EVALUATION OF CURRENT BUSINESS STRATEGY OF HANOI BEER, ALCOHOL AND BEVERAGE JOINT STOCK CORPORATION (HABECO)


Lecturer: Dr. Michael M. Dent

Dr. Nguyen Van Minh Instructor: Dr. Bui Duc Tuan

Student: Do Huy Hoang Student code: E0900337

Grade: M14-EV4-MBA


Hanoi, July 2011

INDEX


Table of Contents Acknowledgements

Research Summary


CHAPTER I: INTRODUCTION


Page

1. Reason for choosing the topic: 01

2. Research status: 01

3. Research subjects: 02

4. Research purpose: 02

5. Research scope: 02

6. Research tasks: 02

7. Project Structure: 03

CHAPTER II: THEORETICAL OVERVIEW

I. Some concepts of Strategic Management: 04

1. Stages of development of strategic management theory: 04

1.1. Initial stage: 04

1.2. Middle stage: 04

1.3. Current stage: 04

2. Some concepts of Strategic Management: 04

II. Tasks of Strategic Management: 06

III. Tools used in Strategic Management research: 06

1. Main tools: 06

2. Other support tools: 07

CHAPTER III: RESEARCH METHODOLOGY

I. Research Approach and Method: 08

1. Approach: 08

2. Research method: 08

II. Data collection method: 09

1. Secondary data: 09

2. Primary data: 09

CHAPTER IV: ANALYSIS OF HABECO'S CURRENT STRATEGY

I. General introduction about HABECO: 10

II. HABECO's Current Strategic Positioning: 10

1. Strategic choices: 10

2. Vision – Mission: 11

2.1. Vision: 11

2.2.Mission: 11

3. Core values: 11

III. Business environment analysis: 11

1. Macroenvironmental analysis 11

1.1. Government, legal and political environment 11

1.2. Economic environment 11

1.3.Socio-cultural environment: 12

1.4.Demographic environment: 12

1.5.Technology environment 12

2. Competitive position analysis: 13

2.1.Current competitors: 13

2.2. Potential competitors: 14

2.3. Supplier pressure 14

2.4.Customer pressure: 15

2.5. Threat of substitute products 15

IV. Analysis of HABECO's resources: 17

1. Value chain analysis 17

2. SWOT analysis of HABECO: 18

3. HABECO's action program: 19

4. Analysis of HABECO's Strategy Map: 20

4.1.Internal: 20

4.2. Financial aspect: 20

4.3. Regarding customers: 20

4.4.About the ability to learn and develop: 21

V. HABECO's current strategy through Delta Project model and Strategy Map: 21

CHAPTER V: EVALUATION OF HABECO'S CURRENT STRATEGY

I. The connection between HABECO's mission and strategy implementation process:………24

II. The effectiveness of the current strategy with HABECO's internal and external environment: 24

1. In terms of output, distribution channels and market share: 24

2. About revenue and profit: 25

3. About brand promotion and marketing: 26

III. Difficulties arising when linking HABECO's strategy implementation with the competitive environment: 26

1. About resources: 26

2. About cost: 27

3. About product 27

CHAPTER VI: PROPOSAL TO COMPLETE THE BUSINESS STRATEGY FOR HABECO COMPANY BY 2015

I. Proposed viewpoints to complete the strategy: 27

II. Proposing solutions to perfect HABECO's strategy until 2015: 27

1. About competitive position: 27

2. About resources: 28

3. About marketing and brand promotion: 28

4. Financial: 28

5. About product 29

6. Innovation and improvement: 29

7. About performance: 29

8. About the organizational model: 29

III. Proposing solutions to perfect HABECO's strategy until 2015: 29

1. Delta Project Model: 30

2. Strategic map: 31

3. Strategic implementation plan: 32

CONCLUDE

Conclusion: 33

Appendix:… 34-35-36-37

References: 38-39

ACKNOWLEDGEMENTS


I would like to sincerely thank the International Faculty - Hanoi National University for collaborating with HELP University - Malaysia to organize this MBA course so that I can study and expand my knowledge.

I would like to thank all the teachers at home and abroad who taught me research methods and scientific knowledge throughout the MBA training program.

Thank you to my wife, my family, and my leaders and colleagues at work for encouraging, helping and creating conditions for me to complete the course.

I would like to thank the staff of the International Faculty and the staff of class M14-EV4-MBA for creating conditions and supporting me during my studies.

I would like to sincerely thank Dr. Michael M. Dent and Dr. Nguyen Van Minh for imparting knowledge about business administration in general and strategic management in particular to me.

In particular, I would like to express my deep gratitude to Dr. Bui Duc Tuan for his dedicated guidance and help in completing my graduation project.

I would like to thank Mr. Vuong Toan (Deputy General Director), Mr. Le Van Duoc (Member of the Board of Directors), Mr. Tran Van Chung (Head of the Board of Supervisors) and the Business Department, Finance and Accounting Department, and Labor Organization Department of Hanoi Beer - Alcohol - Beverage Corporation (HABECO) for their help and information so that I could complete my Graduation Project.

Although I have tried very hard and spent a lot of time to learn, collect and research the theoretical and practical basis of HABECO to complete the best Graduation Project, due to limited ability, level and time, there will inevitably be shortcomings and defects. I respectfully hope to receive guidance, comments and contributions from my teachers and fellow students so that I can better complete my Graduation Project.

Thank you very much!

RESEARCH SUMMARY


The global financial crisis originated in the United States, when the world's leading economy began to be shaken by the bursting of the real estate mortgage bubble in the second half of 2007. This was considered a liquidity crisis of a series of American banks and spread to most of the production, business and consumption sectors. While countries and businesses were trying to find ways to overcome it, the public debt crisis in Greece and Spain was like the last straw, making the world's financial situation extremely fragile, inflation rising, and the world economy covered in a gloomy gray. Assessed by analysts as a financial tsunami causing damage to many economies around the world, the global financial storm has been causing many difficulties for domestic and foreign businesses.

Vietnam is also not outside the impacts of the world economy, especially since Vietnam joined the WTO in 2007, so Vietnam is also affected by the global financial and economic crisis, inflation is rising to a level that is difficult to control...

Therefore, to stand firm with the economy that is struggling to cope as well as proactively deal with instability, inflation... requires Vietnamese enterprises, including Hanoi Beer - Alcohol - Beverage Joint Stock Corporation - an enterprise in the top five leading enterprises of the Beer - Alcohol - Beverage production and trading industry, to continuously learn, adapt to changes in the environment, know how to seize opportunities to change subjective, hasty decisions that can make businesses pay a high price, and promote restructuring to ensure competitive position in the medium and long term. To do this, businesses must have good business strategies and effective, flexible strategic management methods.

Therefore, in this Project, I focus on analyzing and evaluating the current Business Strategy of Hanoi Beer - Alcohol - Beverage Corporation (HABECO) by using two main tools, the Delta Project model and the Strategy Map and some other tools with the hope that through the analysis and evaluation results, I can propose some recommendations and solutions to overcome the current limitations and weaknesses of HABECO and help HABECO have a more flexible and effective business strategy. Thereby, helping HABECO increase its ability to seize opportunities, competitiveness as well as better respond to difficult changes in the business environment, ensuring stable and sustainable development.

CHAPTER I: INTRODUCTION


1. Reason for choosing the topic:

HABECO is one of the State-owned corporations that has had a spectacular transformation since converting its model into a joint stock corporation in 2008, with an average growth rate in recent years of 20%, average revenue increasing by 30% per year, average budget contribution to the State increasing by 20%, and average profit increasing by 12% per year.

Therefore, I would like to apply the knowledge I have learned to analyze and evaluate the effectiveness of the current business strategy of Hanoi Beer Alcohol Beverage Joint Stock Company (HABECO), a company whose Hanoi Beer products have become a characteristic of Hanoi; from there, I would like to make some recommendations for the Company's business strategy in the next phase.

2. Research situation:

In the trend of globalization, the situation of high inflation and increasing scarcity of resources, makes the business environment more and more complicated. Enterprises need to have flexible and effective business strategies to be able to seize opportunities, adapt to the business environment as well as ensure stable and sustainable development.

However, in Vietnam, current business research only focuses on strategy formulation and pays little attention to strategy implementation. On the other hand, most Vietnamese businesses do not have a business strategy or only talk but do not do. This may be because Vietnamese businesses do not properly assess the role of business strategy in production and business efficiency, or it may be because in Vietnam, business has always been opportunistic and snatch-and-grab but still successful.

Therefore, it is an objective and urgent requirement for Vietnamese enterprises to properly assess the role of business strategy in the effectiveness of production and business activities of each enterprise in the trend of economic integration and market economy. Because the nature of business strategy is to help enterprises differentiate themselves, create competitive advantages in business... And to be able to find the difference for each enterprise, the Delta Project model and Strategy Map will be effective tools to help enterprises analyze, evaluate to build, adjust and perfect the business strategy of each enterprise.


1

Therefore, in my project, I will mainly use the Delta Project model tool and Strategy Map to analyze and evaluate the current business strategy of Hanoi Beer Alcohol Beverage Joint Stock Company (HABECO).

3. Research subjects:

This project studies the business strategy of Hanoi Beer Alcohol Beverage Joint Stock Company (HABECO). One of the top five enterprises in the Beer Alcohol Beverage production and trading industry of Vietnam.

4. Research purpose:

- Are the Delta Project model and Strategy Map the best tools to evaluate business strategy? Are they suitable for application to businesses in Vietnam?

- Use Delta Project model and Strategy Map to analyze and evaluate HABECO's current business strategy.

- Evaluate HABECO's strengths and weaknesses through the Delta Project model and Strategy Map.

- Propose more effective flexible business strategies according to Delta Project model and Strategy Map.

5. Research scope:

Analyze and evaluate HABECO's current business strategy. Propose ideas and solutions to improve HABECO's business strategy in the period 2011-2015.

6. Research tasks:

Task 1: Theoretical research

Study the stages of development and concepts of strategic management theory; Identify the tasks of strategic management; Study tools such as: Delta Project model, Strategy Map and other tools.

Task 2: Determine the research method

Determine the approach, research methods; data collection and processing methods.

Task 3: Analyze HABECO's current business strategy

Based on theory and using the main tools such as Delta Project model, Strategy Map and other tools such as: SWOT, PEST, 5 forces model

competition…analyze and provide an overview of HABECO's current strategy.

Task 4: Evaluate HABECO's current business strategy

From the analysis results, evaluate HABECO's current business strategy through two main tools: Delta Project model and Strategy Map.

Task 5: Propose to complete HABECO's business strategy in the period

period 2011-2015.

From the above analysis and evaluation results, I will propose some ideas and solutions with the aim of helping HABECO have a more effective and flexible business strategy according to the Delta Project model and Strategy Map; as well as a plan to implement this strategy.

7. Project Structure:

In addition to the table of contents, acknowledgements, research summary, conclusions, appendices and references. The project includes 06 chapters:

Chapter I: Introduction Chapter II: Theoretical overview

Chapter III: Research methods

Chapter IV: Analysis of HABECO's current strategy Chapter V: Evaluation of HABECO's current strategy

Chapter VI: Proposal to improve HABECO's business strategy

by 2015

CHAPTER II: THEORETICAL OVERVIEW


I. Some concepts of Strategic Management:

1. Development stages of Strategic Management theory:

1.1. Initial stage: internal development stage

Scholars all agree that strategic management began to appear in the 1960s. In this period, it mainly studied internal processes, the role of managers and approaches to business situations. There were some very influential works in this period such as: "Strategy and structure" by Chandler in 1962; "Corporate strategy" by Ansoff in 1965; "Business policy: lessons and situations" by Andrews; especially the SWOT tool and BCG matrix are tools that are still widely used today.

1.2. Middle stage: stage towards industry organization

The theories of this stage tend to follow economics, especially industrial organization economics. The typical representative of this stage is Michael E. Porter with the model of 5 competitive forces and value chain. These can be considered the most effective tools to describe the industry as well as help businesses position and differentiate themselves in the industry.

1.3. Current stage: the stage of orienting towards business resources

With the inheritance of the theories of previous stages, such as Ansoff, Penrose... Barney developed the theory based on the factors of resources such as: irreplaceable, difficult to imitate, rare. Next is Hamel & Prahalad with "Core Competence", "Strategic Intent"... this is the premise of the Strategic Management model as well as the Delta Project model and Strategy Map.

2. Some concepts of Strategic Management:

“Strategy” is a term derived from the Greek word “Strategos” used in the military. Modern military theorist Clawzevit also said: Military strategy is the art of commanding in a dominant position. A publication of the Larous dictionary considers: strategy is the art of commanding means to win.

In 1962, Chandler defined strategy as “ the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals ”. (Chandler, A.1962. Strategy and Structure. Cambrige, Massacchusettes. MIT Press)

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