GRIGGS UNIVERSITY
GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION
PROGRAM

CAPSTONE PROJECT REPORT RECOMMENDING BUSINESS STRATEGY
FOR FICO CEMENT CORPORATION
IN PERIOD 2011-2020

Class : GaMBA01.C0110
Group number : 07
1. TRUONG ANH TUAN
2. DO THI BICH DAO
3. NGUYEN THIEU LAM
4. HOANG TUYET MAI
5. NGUYEN PHUONG TAN HO CHI MINH CITY – 2011

MGMT 689 – Strategic Management
2

COMMITMENT


Our group would like to show our deep gratitude to the teaching assistants
for supporting us. We are grateful to the Board of Directors of FICO Tay Ninh
Cement Company for providing us with useful data and information to complete
this thesis.
Finally we sincerely thank the board of management of the company where
we are working and all the group members for creating conditions for us to
complete the course .in terms of time and cost.
Please accept our sincere and deep gratitude.

Group 7 GaMBA01.C0110 MGMT 689 – Strategic Management
4 TABLE OF CONTENTS
LIST OF TABLES 6
LIST OF FIGURES 6
FOREWORD 7
CHAPTER 1: LITERATURE REVIEW 8
1.1. The concept of business strategy planning 8
1.2.The strategic planning process 8
1.2.1. Strategy formulation phase 8
1.2.2. Strategy implementation phase 8
1.2.3. Strategy evaluation phase 8
1.3. Classification / strategic levels 9
1.4. Some other related theories 9
1.4.1. PESTLE Analysis 9
1.4.2. Five forces model by Michael Porter 9

3.1. Quantitative Strategic Planning Matrix (QSPM) 45
3.2. Business strategy of FICO Cement Company to 2020 47
3.3. Solutions to better the business strategy of Tafico 48
3.3.1. Human Resources Strategy 48
3.3.2. Marketing strategy 50
3.3.3. Financial solutions 51
3.3.4. Production management strategy 52
3.3.5. Corporate culture development 53
3.3.6. Other Recommendations 55
CONCLUSION 57
REFERENCES 58 MGMT 689 – Strategic Management
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LIST OF TABLES

Table 2.1: EFE Matrix of Tafico 33
Table 2.2: The human resources of Tafico 34
Table 2.3: IFE Matrix of Tafico 35
Table 2.4: Market shares of some cement companies 36
Table 2.5: Chartered capital of some cement companies 37
Table 2.6: Selling price of one cement packet of some companies 37
Table 2.7: Types of cement plants 38
Table 2.8: CP Matrix 40
Table 2.9: SWOT Matrix 40
Table 2.10: IE Matrix 43
Table 3.1: QSP Matrix 45


Consultation with experts in the field of construction materials.

MGMT 689 – Strategic Management
8

CHAPTER 1: LITERATURE REVIEW
1.1. The concept of business strategy planning
In the market economy, business strategies of an enterprise are based on
objective and subjective conditions as well as the enterprise's resources to identify
the ways and measures to ensure the stable, long-term existence and development in
accordance with the company’s objectives.
According to Alfres Chandler, strategic management is the process of
determining long-term goals of the company, selecting appropriate methods to carry
out the activities, allocating necessary resources to achieve the objectives.
1.2.The strategic planning process
1.2.1. Strategy formulation phase
Analyzing the external environment, also known as the macro economy and
the industry's operating environment.
Analyzing the internal environment, the operation of the enterprise.
Using matrices to assess such as IFE, EFE, SWOT, SPACE, BCG, QSPM.
Establishing mission (business tasks).
Setting long-term goals.
Proposing strategies and choosing the best strategies.
1.2.2. Strategy implementation phase
Setting short-term goals.
Adjusting the organizational structure.
Formulating policy.
Constructing budget.
Developing corporate culture.
1.2.3. Strategy evaluation phase

School. It helps managers identify opportunities and threats that businesses face in
an industry. This model has the name Five forces model by Michael Porter. The five
forces that Porter suggests that drive competition are: (1) Threat of new market
entrants; (2) Rivalry among the existing players in the industry; (3) Bargaining
power of buyers; (4) Bargaining power of suppliers; (5)Threat of substitute

MGMT 689 – Strategic Management
10

products. Porter points out that the stronger these forces, the more limited
capabilities of existing companies to raise prices and earn higher profits. Competing models of Michael Porter
a. Threats of new entrants
According to M-Porter, a potential rival firm is not currently available in the
industry but may affect the industry in the future. The number of potential
opponents, the degree of their pressure will depend on the following factors:
The attractiveness of the industry: This factor is reflected by such indicators
as rates of return, the number of customers, and number of enterprises in the
industry.
The barriers to entry: they are the factors making entering the industry more
difficult and costly such as technology, capital, commercial factors (distribution
system, branding, and customer system), and unique resources (raw material,
degrees, patents, human resources, the protection of the government, etc.).

MGMT 689 – Strategic Management
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b. Rivalry among the existing players in the industry

Provider’s information: in the current era, information is always an important
factor promoting the development of trade. Information about providers has a large
impact on the selection of input suppliers.
e. Threat of substitute products
Substituting products and services are those that can satisfy the customers’
demand in the way equivalent to the current products and services in the industry.
1.4.3. External Factor Evaluation (EFE) Matrix

Key external
factors
Weight
Rating
Weighted score
List external
factors
-
Total

The construction of EFE matrix helps us summarize and quantify the effects
of external factors on the enterprise. They affect the production and business
activities of the enterprise; including opportunities and challenges to the enterprise.


-
Total

The building of IFE matrix helps us summarize and evaluate the strengths
and weaknesses of each business unit; it affects the production and business
activities of the enterprise.
To build up the matrix, we list all internal factors that affect the production
and business activities of the company, as defined in the internal business assessing
section. We assess the importance of each factor by weighted scores, total weighted
scores of all factors equal 1. The rating shows the relative importance of these
factors for success of the company in the market.

MGMT 689 – Strategic Management
14

The importance of each factor is evaluated by sorting from 1 to 4. Among
them: 4 means the company is having the best response; 3 is above average, 2 is
average and 1 is the lowest. These levels are based on the strategic effectiveness of
the company.
Next is to determine the importance of each factor by multiplying the degree
of importance (weight) with the corresponding rating. Then, we sum the total of
each factor to determine the total weighted score for the company, 4 is the highest,
1 is the lowest, and the average score is 2.5 points.
Total
MGMT 689 – Strategic Management
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Building CP matrix helps companies identify its competitors, advantages,
disadvantages, from which help the company plans appropriate business strategy.
This matrix includes all internal and external factors, which are important to
the success of the enterprise. In CP matrix, the competitors are also considered and
given overall weighted scores. Then, we compare total weighted scores of these
competitors the model competing companies. Thereby, we will have more
information to develop the business strategy for the company.
1.4.6. SWOT Matrix


weaknesses to take advantage of opportunities
– Strengths - Threats strategies (S-T): Promote internal strengths to avoid
external threats
– Weaknesses - Threats strategies (W-T): Overcome internal weaknesses to
avoid external threats

MGMT 689 – Strategic Management
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1.4.7. Internal-External (IE) Matrix

IE matrix analysis is to put the departments of a company into nine boxes as
follows: Total weighted score IFE matrix
Total weighted score IFE matrix Strong
(3,00-4,00)
Average
(2,00-2,99)
Weak
(1,00-1,99)
High

(3,00-4,00)
I
II

penetration and product development.
– Harvest or divert (box VI, VIII, IX): Retrenchment, Divestiture,
Liquidation ineffective departments in the company.
1.4.8. Quantitative Strategic Planning Matrix (QSPM) Important
factors
Strategic Alternatives

Rating
Strategy 1
Strategy 2
Strategy 3
Attractiveness
Scores
Total
Attractiveness
Scores
Total
Attractiveness
Scores
Total
Internal
factors:
Administration,
finance,
accounting,
marketing,
production, MGMT 689 – Strategic Management
18

QSPM is used to evaluate and rank the strategic alternatives, from which we
select the best strategy for the enterprise.
This matrix uses all information, data from the above-mentioned matrix: IFE,
EFE, CP matrix, SWOT matrix, etc.
To develop a QSPM, we need to go through six steps:
- Step 1: List internal strengths and weaknesses (at least 10 factors), external
opportunities and threats (at least 10 factors) in the left column. The information
should be obtained from EFE matrix and IFE matrix.
- Step 2: Assign weights to each external and internal factor. These weights are
identical to those in the EFE matrix and the IFE matrix.
- Step 3: Identify alternative strategies the enterprise should consider implementing.
Group these strategies into mutually exclusive sets.
- Step 4: Determine the Attractiveness Scores (AS), defined as numerical values
that indicate the relative attractiveness of each strategy in a given set of alternatives.
Attractiveness Scores are determined by considering the degree of influence the
choice of strategies of each key external or internal factor. Attractiveness Scores
assigned to each strategy demonstrate the relative attractiveness of each strategy
compared with other strategies. The Attractiveness Scores (AS) are classified as
follows: 1 - not attractive, 2 - less attractive, 3 - attractive, 4 - very attractive. If the
factor does not affect the selection, we do not mark and leave this row blank.
- Step 5: Calculate the Total Attractiveness Scores (TAS). Total Attractiveness
Scores are the result of multiplying the weights by the Attractiveness Scores in each
row. If we only consider the influence of internal and external factors, TAS shows
MGMT 689 – Strategic Management

20 BOARD OF SUPERVISORS
GENERAL DIRECTOR

HUMAN
RESOURCES
DEPARTMENT
OF FINANCE
AND
ACCOUNTING
DEPARTM
ENT OF
LAW FICO
CEMENT
PLANT(1)
TRANSPOR
TATION-
HANDLING
COMPANY
FICO (3)
TAY NINH
CEMENT
PLANT (2)
SALE-
SERVICES
COMPANY
FICO (4)
MANAGEME
NT BOARD
2
ND

FICO Tay Ninh Cement Joint Stock Company is established in December
23, 2004 in the certificate of business registration No. 4503000030 of Tay Ninh
Department of Planning and Investment. The shareholders include: No. 1 Building
Materials Corporation (FICO), Viet Nam General Rubber Corporation, An Giang
Construction Company, Development Investment Construction Corporation (DIC
Corp), Hoa An Joint Stock Company. The main business fields of TAFICO are
manufacturing and trading of cement and other building materials. Established
chartered capital: VND 525 billion. Current chartered capital: VND 680 billion.
Immediately after its establishment, TAFICO replaced FICO to continue the
construction of cement plant project in Tan Chau District, Tay Ninh Province with a
capacity of 1.5 million tons cement / year with the total investment of billion.
In order to supply the products in the market before Tay Ninh Cement plant
project was completed, TAFICO acquired Southern Cement Company in Hiep
Phuoc industrial zone and renamed FICO Cement Plant with the capacity of 500
thousand tons cement/ year. TAFICO brand officially appeared in the market in
October 2006 with two main products including PCB40 packet and PCB 40 station.
Currently TAFICO focuses on introducing brand and image to customers,
developing wholesale markets, retail markets in Ho Chi Minh City and Southwest
provinces.
In October 2009, Tay Ninh Cement Plant officially began operation. This
event marked a turning point for TAFICO being one of the three leading cement
producers in South Vietnam with the capacity to supply up to 2 million tons
cement/year to the market. For consistency in implementing business strategies,
TAFICO set up Sales-Service Fico Company. This company is responsible for
performing all the stages in the process of selling products including proposing
business strategy, building and implementing sales policies, maintaining and
developing the distribution system. With the motto of maintaining credibility,
sharing interest with distributors, TAFICO has gained significant market shares in

MGMT 689 – Strategic Management


2.2. An analysis of current production and business activities of the Fico Tay
Ninh Cement joint-stock company (Tafico):
2.2.1 Tafico’s current strategies
In phase 1, the Tay Ninh cement plant project aims at exploiting and using
efficiently the resources of rare limestone of the region. It helps to boost the
strategies transferring economic development structures Tay Ninh province in the
direction of industrialization and modernization.
Along with the investment in the Tay Ninh cement plant’s construction
project, Tafico conducted the international bidding and purchasing of Phuong Nam
Cement Company in Hiep Phuoc Industrial Zone, Nha Be with a capacity of 500
thousand tons of cement/year and renamed Fico cement Factory. Tafico is
continuing to invest in upgrading the plant, improving the environment and
increasing its capacity to 1 million tons / year to enhance the likelihood of bringing
goods to market before the project is officially put into operation. This is a daring
step to develop the brand, to bring the brand closer to consumers in the South.
In addition, when the Tay Ninh cement plant project completes and is
formally put into operation, the Tafico still continues to expand production and the
distribution locations with the purchasing of Binh Duong DIC cement joint-stock
company with a capacity of 300 thousand tons of cement/year and changes the
name into Binh Duong Fico cement Factory. It is a strategic location which can
provides goods to the southeastern provinces.
In Phase 2, on 29.4.2008 approved by the Prime Minister on supplementing
the assembly line 2 project of Tay Ninh FiCO cement with a capacity of 4000 tons
of clinker/day in the development plan of the Vietnam cement industry according to
the document 2699/VPCP-KTN. Also, the company receives the approval of the
investment plan of assembly line 2 “XM FiCO” according to 327/BXD-KHTC on
05/3/2010 by the Ministry of Construction. This is a large-scale project as well as
the total investment; therefore, it plays an important role and influence in the key


business activities and it has sold 1.4 million tons of cement (75% of design
capacity). It is estimated that in 2011 2.1 million tons of cement will be sold.

MGMT 689 – Strategic Management
25

2.2.2. Results of general business

Table 2.1: Results of general business
Unit: VND
No
Items
2010
2009
I
Total revenue

1,619,858,090,186

1,001,005,128,083
1.1
Sales

1,609,877,846,268
989,044,979,453
1.2
Financial activities income

9,755,442,522
10,640,730,973

119,212,231,979
2.5
General & administration
expenses

48,173,970,818
3,271,936,956
III
Total pre-tax accounting profit

24,501,381,686

3,831,625,608
3.1
Current business income tax
charge

1,225,069,084
-
3.2
Total profit after corporate
income tax

23,276,312,602

3,831,625,608

2.2.3 An Analysis of the impact of the macro environment on the business of
the Tafico (PESTLE model)
- Politics and law: the political environment in Vietnam is considered a