GRIGGS UNIVERSITY
GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

FORMULATION OF BUSINESS STRATEGY
FOR EMBROIDERED PRODUCTS
OF MINH TRANG LIMITED COMPANY
IN THE PERIOD 2011 – 2015
Group Number:
04
Student’s name:
Nguyen Thi Huyen

Ngo Ngoc Quang

Tran Kha Toan

Nguyen Tien Dung

enterprise.
In addition, our group also sincerely thanks leaders and staffs of Minh Co., Ltd.
have created favorable conditions in providing valuable comments, data and
practical knowledge for our group to carry out this Project.
In particular, the group would like to express our gratitude to family, colleagues
and friends who have created favorable condition for our group to have time for
this course. Sincerely thanks friends from class GaMBA01.X0409, over the past
year have always encouraged and supported us in studying process.

iii

TABLE OF CONTENT Trang

COMMITMENT i
ACKNOWLEDGEMENT ii
TABLE OF CONTENT iii
LIST OF SYMBOLS AND ABBREVIATIONS vi
LIST OF DIAGRAMS, TABLES AND FIGURES vii

INTRODUCTION
1. Name of the project 1
2. Rationale for selecting the project 1
3. Study purpose of the Capstone Project 2
4. Scope of the study 2
5. Methodology of the study 2
6. Meaning of the study 3
7. Structure of the Capstone Project 3

CHAPTER 1: THEORETICAL BASE OF BUSINESS STRATEGY AND
BUILDING BUSINESS STRATEGY

2.3.1. Macro analysis 31
2.3.2. Sectorial environment analysis 34
2.3.2.1. Overview of embroidered handicrafts market 34
2.3.2.2. Sectorial environment analysis applying five forces model 35
2.4. Internal environment analysis 42
2.4.1. Summary of operation situation and result from 2008 to 2010 42
2.4.1.1. Organizational structure 42
2.4.1.2. Human resource 43
2.4.1.3. Operation situation and result 45
2.4.2. Basic activities 51
2.4.3. Supporting activities 52
v CHAPTER 3: PROPOSING STRATEGY AND SOLUTIONS FOR
SELECTED STRATEGY
3.1. Target of Minh Trang Co., Ltd 54
3.1.1. General target 54
3.1.2. Some main targets 55
3.2. Proposing and selecting optimal strategy 56
3.2.1. SWOT matrix and strategy proposal 56
3.2.2. Selecting strategy 58
3.3. Strategy implementing solution 59
3.3.1. Solution on products 59
3.3.2. Solution on market 61
3.3.3. Solution on finance 62
3.3.4. Solution on human resources 62
3.3.5. Solution on management 63
3.4. Plan to implement solutions 64
3.5. Recommendation 66

4.
Diagram 1.4
Michael E.Porter „s Five forces model, 1980s
13
5.
Table 1.1
External factors evaluation matrix (EFE matrix)
15
6.
Diagram 1.5
Value chain model of Michael Porter
16
7.
Table 1.2
SWOT matrix
18
8.
Table 1.3
Strategic Planning Quantitative matrix with
GREAT criteria
19-20
9.
Table 1.4
Summary of suitable selections for each strategy
in basic competitive strategies
21-22
10.
Diagram 1.6
Advantage of low cost enterprise
23

companies with similar products group in three
years from 2008 to 2010
40-41
18.
Diagram 2.2
Five Forces model of Embroidered sector
41
19.
Diagram 2.3
Organizational structure of the company
42
20.
Table 2.5
Human resource structure according to age and
gender
44
21.
Table 2.6
Labor qualification
44-45
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No
Type
Name
Page
22.
Table 2.7
Statistic of capital resource of the company in
three years from 2008 to 2010

1

INTRODUCTION
1. Name of the project: Business strategy for embroidered products of Minh Trang
Co., Ltd in the period 2011 - 2015
2. Rationale for selecting the topic
Competition is one of market economy rules, is the way to live, exist and develop of
the enterprise. Through competition, products can be launched, more and more
perfect. This is also This is also selected environment for new entrepreneurs who
have stuff, dynamic, dare to think, dare to do, and adapt quickly to new
conditions. To be able to compete in market mechanism, building business strategy
for each enterprise is very important; it plays a crucial role in success of the
enterprise, towards enterprise to sustainable development in the market mechanism.
Business strategy enables managers and employees in all enterprises realize the
goals and direction of the business. Through which all members of the business will
know what to do and encourage them to get short-term achievements, while better
improve long-term interests of the business.
To be a limited company operating in producing and trading traditional handicrafts
products, Minh Trang Co., Ltd is not out of that general trend. In recent years, the
company has been trying to find itself long term development strategy so that its
products can always stand stably in the market. It can be seen that planning a


3

6. Meaning of the Project
- Basing on real situation of the enterprise, this project helps the owners,
managers have general view of current situation of the enterprise.
- Some given contents in the project can be reference for the enterprise to
orient long term business strategy and create foundation for the enterprise to
be active in developing embroidered handicrafts products business
orientation.
7. Structure of the Capstone Project
Besides the introduction and summary, the Capstone Project consists of 3 chapters,
including:
Chapter 1: Theoretical foundation on business strategy and building business
strategy.
Chapter 2: Business operation situation of Minh Trang Co., Ltd.
Chapter 3: Proposing strategy and strategy implementation solutions
4

CHAPTER 1:
THEORETICA FOUNDATION ON BUSINESS STRATEGY AND
BUILDING BUSINESS STRATEGY

1.1. Business strategy concept
1.1.1. Strategy
According to Prof. Alfred Chadler: Strategy is identification of basic and long term
targets of an enterprise, is description of necessary sources distribution and action
process to carry out those targets.
According to Prof. Kenneth L. Andrews: Strategy is model of targets, purposes and
plans to achieve those targets.

future to find out active solutions to deal with and adapt to new business
environment.
- Help the enterprise to explore and take use of its resources, bring into play
ultimately power of the enterprise to develop
- Help to distribute resources reasonably in each period, improve operating
efficiency of the enterprise.
- Help to increase cementation and commitment of staff and leaders in
implementing general goals of the enterprise.
6

- Help the business to increase labor productivity, increase sales and increase
effective management, avoid risks, increase prevention ability and prevent
difficult problems to the enterprise.
1.2. Business strategy building process
Business strategy has always been built on the basis of competitive advantage of the
enterprise in comparison with other competitors in each certain period
corresponding to specific business environment and internal conditions of the
enterprise. Business strategy of an enterprise is often built according to strategic
management process, which are building strategy stage, implementing strategy
stage and evaluating strategy stage. In particular, the period of "building strategy"
is the first stage, plays an important part and necessary condition to ensure
correctness and quality of remaining stages.
Building strategy methodically, adequate and feasible requires the enterprise to
identify its competitive advantages an weaknesses, in which competitive advantage
is defined as central priority for analyzing and building strategies. Competitive
advantage may be strategic vision of business leaders, business leadership, financial
capacity, human resources, technological know-how, relationship with partners,
client networks, input supply sources, the ability to adapt with changing
environment, …
Business strategy building process is described according to the following diagram:

Conclusion: we can see
opportunities and threats
for the enterprise.
Building and
selecting
strategy

- SWOT
model
- GREAT
optimal
selection
1. Low cost strategy
2. Differentiation strategy
- Characteristics
- Figures
- Customer services
3. Focus strategy
- Price
- Differentiation
Make the
organization
suitable to
selected strategy
Implement and
adjust selected
strategy
Verify and
evaluate the
results of

protect the enterprise to avoid mistakes in its vision and strategic plan namely:
o Awareness
o Enthusiasm
o Knowledge
o Ability to act
o Connection to business change or rebuild business process
Strategic targets for the enterprise
Strategic targets concept of the enterprise:
Strategic targets of the enterprise is ideal result that the enterprise has to achieve
within a certain period, in objective and subjective conditions of the enterprise in
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accordance with given direction such as competitive position, business knowledge,
growth rate, etc.
Strategic targets of the enterprise need to be understood as qualitative norms. The
quantification of strategic targets has two benefits: the first one is easy to refer to
annual target, targets of each department, each factory, each team, and each person
with clear responsibility, the second one is easy to check. In the process of
implementation it can be based on quantitative norms to check whether the
enterprise has got it or not, if it detects any problem it can overcome, basing on
quantitative norms to encourage public efforts.
Content of strategic target of the enterprise:
Content of strategic targets of the enterprise includes 10 items:
- Profitability
- Competitive position in the market
- Productivity
- Product structure
- Finance target
- Building and developing the enterprise
- Invention

Diagram 1.2: External environment factors Source: Assoc.Prof.Dr Nguyen, Lien Diep and MBA. Pham, Van Nam. 1998.
“Business strategy and policy”. Statistics publishing house
1.2.2.1. Macro analysis
To analyze macro environment, which is also known as the entire environment of
national economy, people use PEST theory including evaluation of political factors
(P), economic factors (E), social factors (S) and technological factors (T) to find out
the opportunities and threats for the enterprise operating in that business
environment.

Environment of the whole economy
Economic
factors
Political,
legal factors
Technological
factors
Social,
cultural
factors

Môi trường nội bộ ngành
Customers
Suppliers
Substitute

Economics
GDP changes
Economic growing rate
Interest, inflation
Unemployment
Economy cycle
Society
Population, demography
National income distribution
Living style
People‟s knowledge, culture
Customs and habits
Technology
New technology discovery
Technology transfer
Government expenditures on
R&D
Technological products market
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Diagram 1.4: Michael E.Porter’s Five forces model, 1980s

customers
Threats from new rivals
Threats from substitute goods
Source: Assoc.Prof.Dr Vu Thanh Hung – Lecture “Strategic management”
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 Power of customers
In relationship between enterprises and customers, if customers are “weak”, the
enternprises will have opportunity to increase prices to increase profits.
Conversely, the customers will be “stronger” than the enterprises. Specifically, if
costomers buy in bulk, if customers have more options to choose, when customers
are regular customers, when customers can supply materials for themselves with
lower-cost rather than purchasing outside …. the customers will have the power.
 Power of suppliers
Suppliers capable can demand for increase price or reduce quality of supplied
products that means "stronger" than the enterprise. Specifically, the supplier will
be stronger in following cases: when the supplier have "no" many substitutes in
the market of industrial goods forcing the enterprise to choose them; when
business of the enterprise is not important for providers any more; when the
suppliers have advantages of supplied products specification making the enterprise
difficult to findout substitute products.
 Threat from substitute products
According to Michael Porter, substitute products are the products of competitors in
different business sectors which have similar functionality to meet the same
consumption demand of customer. For example, in the coffee sector enterprises
indirectly compete with tea processing enterprises and other refresh soft drink
producers. If substitute products are produced on new technology lines with lower
price and better quality, this is a real threat to business. However, if the customers
have litter effort to substitute products and do not like to change the suppliers, this
threat will be reduced instead. Total:
1.0
Source: Fred R. David. 2006. “Concepts of Strategic Management.
Statistics Publishing House – Page 180
Total highest important point that a business can achieve is 4.0 and the lowest one is
1.0. Total average important point is 2.5. Total of important points is 4 showing that
the enterprise is responding very well to the existing opportunities and threats in the
environment. In other words, the strategies of enterprise effectively utilize the
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existing opportunities and minimize the threats of possible negative effects of
external threats. The total point is 1 indicating that the business strategy enterprise
set out does not take advantage of opportunities or avoid external opportunities.
1.2.3. Internal environment analysis
1.2.3.1. Enterprise value chain analysis
Analyze internal business environment to discover the strengths and weaknesses of
the enterprise to build suitable targets system and appropriate strategies to maximize
its strengths and can turn them into particular abilities, on the other hand, limit its
weaknesses. We analyze the internal business environment of the enterprise in term
of "value chain" analysis techniques of Michael Porter in diagram 1.5.
Diagram 1.5: Value chain model of Michael Porter
Supporting
activities