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Production and Business Orientation of Thai Duong Investment and Development Joint Stock Company in the Coming Time.


CHAPTER III: SOME MEASURES TO DEVELOP BUSINESS ACTIVITIES OF THAI DUONG INVESTMENT AND DEVELOPMENT JOINT STOCK COMPANY


I. PRODUCTION AND BUSINESS ORIENTATION OF THAI DUONG INVESTMENT AND DEVELOPMENT JOINT STOCK COMPANY IN THE COMING TIME.

1. Production, business and investment activities.

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Since mid-2010, Thai Duong Investment and Development Joint Stock Company has been constructing a new factory on the existing area and is known to be completed in mid-2011. Thus, after the construction is completed, the company's factory area has increased significantly, the company will proceed to distance the positions of the machines which were previously arranged very close together. This will create many conveniences for the production and supervision process in the workshop, moreover, it can divide the product production area more reasonably.

Continue to build more factories to promptly meet customer orders, and warehouses to reserve to meet the company's increasing output in the coming time.

Production and Business Orientation of Thai Duong Investment and Development Joint Stock Company in the Coming Time.

Research and develop the market, understand the consumer needs of customers, especially of corporate customers, this is the customer segment that brings a very large proportion of revenue to Thai Duong. In addition, pay attention to understanding the needs of foreign customers to come up with appropriate measures to increase export revenue.

Continue to build and promote the capacity to forecast demand and market developments in order to proactively prevent sudden changes.

Increase capital for production and business activities. Actively seek and mobilize capital from investors, shareholders of the company, mobilize capital from credit institutions at the lowest cost to contribute to reducing the credit risk that the company is currently facing.


Actively learn and improve your understanding of the law to proactively deal with uncertainties that may arise when participating in international trade.

Clearly recognize the nature of each cost factor, which is a good cost and which is a bad cost to come up with appropriate solutions. Accordingly, good costs are costs that bring added value to the business, meeting the needs of customers. For example, for the packaging industry, packaging quality is very important because it supports the transportation and preservation of products, ... then the cost that the business spends to check the quality of the product, ensuring that most of the products sold meet the standards, then this inspection cost is a good cost. On the contrary, if the business has to spend money to fix errors and mistakes in its products, it is a bad cost. Currently, Thai Duong Company is applying the ISO 9001:2008 quality management system and in the near future is implementing to apply quality management systems such as ISO 14000, HACCP.

Thai Duong Company is making efforts to further cut costs because compared to other businesses in the industry, Thai Duong's cost ratio is still slightly higher. However, Thai Duong has decided to cut its costs according to the principle of focused cutting, the type of cost that accounts for a large proportion will be given priority. For manufacturing businesses like Thai Duong, the cost of goods sold accounts for the largest proportion, mainly the cost of raw materials. To save the above-mentioned cost of raw materials, Thai Duong is looking for suppliers with the lowest cost, establishing long-term relationships. In addition, Thai Duong is also making efforts to save other costs such as saving labor costs by reasonably allocating labor in the workshop, saving production electricity costs by temporarily stopping unnecessary machinery during peak hours without affecting work productivity.

Diversify the company's business into other fields such as producing baby bath water and bottled purified drinking water.


2. Marketing.

Continuously improve the company's position in the industry based on factors such as: company reputation, product quality, product diversity, low cost, competitive prices.

Expanding its distribution system through business cooperation with large enterprises, the supermarket system gradually increases domestic and export market share.

Join domestic professional associations to exchange information on products, markets, technological innovation, human resource training, and brand building and promotion.

Develop the company's own website to introduce products, connect with domestic and foreign customers and suppliers, and increase understanding of the company.

Build more billboards in the surrounding areas.

3. Human resources.

Build a salary and bonus policy that maximizes employee autonomy, creativity and positive contributions.

Organize training to improve workers' skills, arrange suitable workers according to their skill level and appropriate salary level.

Strengthening training organization, sending managers and employees of enterprises to participate in seminars, training sessions, and short-term training courses to contribute to improving professional qualifications to enhance professionalism in management, operation as well as professionalism in the working style of employees, thereby bringing higher work results.

II. SOME MEASURES TO IMPROVE BUSINESS RESULTS OF THAI DUONG INVESTMENT AND DEVELOPMENT JOINT STOCK COMPANY.

1. Capital solutions.

The business goals and policies of an enterprise in each specific period are different, but the most common financial goal is to maximize the owner's benefits, that is, to maximize the rate of return on equity within the risk level.


risk allowed. Therefore, establishing an optimal financial structure will ensure that the company's financial risk level is small and the company will escape the risk of bankruptcy. First, the company needs to determine the ability to mobilize equity capital.

including:

Flexible use, saving temporarily idle capital of funds

Reserved but not used.

Retained earnings: This is the capital formed from the company's profits after each profitable business period. This capital is very important because only when the company makes a profit can it supplement this capital source, but when it makes a loss, not only can it not be supplemented but it also reduces this capital source. To increase retained earnings, the company needs to increase all sources of revenue and minimize unnecessary expenses.

However, the equity capital is still too modest compared to the amount of capital that the company needs. Therefore, the company still needs to mobilize from other sources such as:

Accumulated benefits: Other payables that have not yet reached the payment deadline such as employee salary debts, tax debts, payables to internal units, etc. This is a form of "free" financing because the company uses it without having to pay interest until the payment date. However, the scope of application of debts is limited because the company can only delay paying taxes for a certain period of time, and if the payment of salaries to workers is delayed, it will reduce their working spirit. Accumulated debts are an automatic source of financing, depending on the business scale of the company at each point in time. They spontaneously change with the company's business activities: when the company reduces production, these amounts will decrease accordingly, on the contrary, they will automatically increase when production expands. Thus, to take advantage of and effectively use this source of financing, expanding production, investing in the right direction, saving, and promoting product consumption in the market is the most optimal solution.

Capital from credit financial institutions: Banks play a very important role in timely capital supplementation for businesses. In fact, in the past three years, the company has been very successful in mobilizing short-term debt but still


Many times, the company has borrowed medium and long-term capital for use. Currently, the company's short-term loans have accounted for a very large proportion while the company is in need of long-term funding sources to invest in fixed assets. Therefore, the company should reduce short-term debt, replacing it with long-term debt. Although long-term loans incur greater costs, which may affect the company's business results, in terms of long-term goals, it is necessary. The advantage of long-term loans is that these borrowing transactions are relatively flexible, the lender can set up a repayment schedule that suits the borrower's income cash flow, and the company itself has time to implement a plan to gradually repay the short-term loan.

However, when raising capital from banks or credit institutions, there are some issues that companies need to consider, which are:

● The company must fully meet the requirements of banks and credit institutions to borrow medium and long-term capital.

● The company must ensure good use of other capital sources so that when short-term debt is reduced, the amount of working capital will not affect the company's operations and business results.

● This long-term capital must be used for the right purpose, which is to invest in necessary fixed assets and the investment project must be feasible.

● The cost of mobilizing and using long-term capital is not too large compared to short-term capital, affecting the business results of the enterprise.

If the company applies and implements the above measures well, it is certain that short-term debt will be reduced by a relatively large amount, the company will have the conditions to borrow medium and long-term capital and at the same time be able to effectively use short-term and long-term capital to bring practical benefits, products have good consumption ability, the production process takes place continuously, thereby ensuring regular capital circulation, creating conditions for capital preservation and development.

However, in the current situation when bank interest rates are high, domestic banks are tightening credit, increasing the required reserve ratio, mobilizing capital from banks is extremely difficult regardless of short-term, medium-term or long-term loans. And in fact, banks are not the only channel for capital mobilization.


of the enterprise. In such urgent situations, small and medium-sized enterprises like Thai Duong can look for other external sources of capital at lower costs. One of the measures often applied by enterprises is to join forces with another enterprise that has the same needs as them to expand investment and production and business. Thus, the capital problem has been solved, the next problem of the enterprise is just to do so in order to operate and carry out production and business to achieve the highest results, for the benefit of both parties.

Another very effective capital mobilization method for small and medium-sized enterprises such as Thai Duong Company is to use financial leasing services. Financial leasing is a form of credit financing through leasing of assets, machinery, equipment, means of transport, etc., which is the need that businesses desire to renew machinery, equipment, and modernize production and business technology. The characteristic of this method is that the lessor is the owner of the asset and will transfer the asset to the lessee, meaning that the asset user has the right to use and enjoy the economic benefits from those assets for a certain period of time. The lessee is obliged to pay a corresponding amount to the asset owner. This also shows that granting credit in the form of financial leasing does not require pre-existing asset guarantees, allowing businesses to access a new form of credit, while relieving pressure on assets. In addition, CTTC companies can buy assets from businesses and lease them back, so that businesses have both assets to reuse and working capital for production and business. Obviously, this type is very suitable for businesses like Thai Duong because the leasing procedure is simpler, more flexible and quicker than borrowing because it reduces the time for mortgage and guarantee procedures. In addition, the form of financial leasing will help businesses avoid the risk of obsolescence and obsolescence of assets, especially for equipment with rapid development speed. Moreover, this form can help businesses have both capital and modern machinery and equipment to focus on production and business more effectively.

2. Labor solutions.

The workforce is a decisive factor in the production and business results of an enterprise. Nowadays, although there are many machines and equipment


automatic but those machines no matter how modern they are without human control will become ineffective. In the production and business process, labor affects every stage, every process of operation from the stage of purchasing raw materials, manufacturing products to the process of consuming products. Therefore, the company needs to promote the strength of the labor force, awaken their great potential, create motivation for them to develop their full capacity. Then, the work assigned to them will be most effective. The optimal standard of labor requires high technical expertise and systematic training. Therefore, to improve production and business activities, the company needs to have a plan to train and develop the labor force:

Firstly , the company needs to improve the standards for selecting workers, ensuring the quality of the additional workers. On the other hand, due to the requirements of technological innovation, the company needs to encourage workers to continuously learn and improve their knowledge to meet technical requirements.

Second , employees can only develop their abilities and qualifications well when they are encouraged and properly evaluated, so in addition to training and development policies, companies need to pay attention to distributing wages and incomes that are appropriate to the abilities and efforts of employees. Doing so will create motivation for employees to improve their qualifications and abilities to carry out work with high quality and efficiency, contributing to increasing the company's production and business results.

In general, the company has recognized the important role of human resource development through improving the qualifications of workers, as shown in the following: The company has a training program for direct production workers on knowledge related to technology and engineering, and training management knowledge for managers and production team leaders. The training form is not yet diverse, only stopping at the traditional form of sending staff to attend courses at universities. Therefore, the company needs to expand the training content, combining the improvement of technical expertise with the improvement of management capacity. The number of employees with university degrees in the company is still small. The company can recruit to have people with


High level or select young, capable people for university and postgraduate training, especially in Business Administration to improve management capacity.

In addition, the company needs to train a specialized Marketing department. In addition, the company needs to seek the help of technology suppliers to improve the qualifications of employees and master new technologies.

The effect of training the workforce is very large. The company's attention to human resource training will certainly have a positive impact on the production and business process, thereby contributing significantly to improving the financial capacity of the company.

Direct production workers, after being trained and improving their skills, will do their work more accurately, reduce the rate of waste products, improve product quality, and shorten the time to complete the work. Therefore, it contributes to improving productivity and reducing production costs for the entire company.

Improving the qualifications of the company's management staff means improving the effectiveness of management work. Competent managers will know how to arrange the right people for the right jobs, contributing to the effective use of raw materials, machinery, equipment, and labor of the company, thereby positively affecting the improvement of the company's business results. Highly qualified business administrators have the ability to combine opportunities with their own resources to generate the highest profits.

3. Cost saving solutions.

On reducing cost of goods sold.

Reducing raw material costs: For plastic packaging products, raw material costs account for a large proportion of product costs. Therefore, reducing raw material costs plays an important role in reducing product costs. However, reducing raw material costs does not mean cutting raw materials below the allowable technical standards. Because doing so will directly affect product quality. The company can only reduce raw material costs by setting stricter consumption standards, organizing more effective raw material purchasing, regularly maintaining and repairing machinery and equipment to minimize the number of defective products due to machinery, broken or not ensuring the toughness of packaging, improving the meaning of

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