CAPSTONE PROJECT REPORT HOA SEN GROUP’S
COMPETITIVE STRATEGY FOR
THE PERIOD 2011-2015
 THOAI QUANG TRAN
 HUY NGOC NGUYEN
 NHAN LE THI AI
 DUNG TRI PHAM
 NGHIA TRONG NGO
 HA MANH NGUYEN CLASS: GaMBA01.C01
Ho Chi Minh City, 2010

Group No.: 5
Student’s name:
THOAI QUANG TRAN
HUY NGOC NGUYEN
NHAN LE THI AI
DUNG TRI PHAM
NGHIA TRONG NGO
HA MANH NGUYEN HO CHI MINH CITY, 2010
Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
i
ACKNOWLEDGEMENTS
After a long time to study in the Master of Business
Administration, learn and research the Hoa Sen Group to write this
topic, our group has received guidance, help and suggestions from
teachers of Griggs University and the Educational Technology and
Career Development Center - Hanoi National University.
First, our team would like to thank Griggs University’s

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Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
ii
REASSURE WORD
Our group commitment that the entire contents of this topic is
because we ourselves have researched, surveyed, collected information
to perform this Capstone Project.

Students who made this Capstone Project.
1. Thoai Quang Tran
2. Huy Ngoc Nguyen
3. Nhan Le Thi Ai
4. Dung Tri Pham
5. Nghia Trong Ngo
6. Ha Manh Nguyen

Griggs University
USA
Nov 2010 Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
iv
ABSTRACT
Hoa Sen Group, Established on Aug. 08
th
2001 with the present turnover of $
47 billions. Hoa Sen Group basically developed on the mother – subsidiary
companies, orienting to the target to become the strong & stable economic group on
the fields of iron – steel, building materials, real-estate, financial investment, marine
port & logistics.
Together economic development, the Vietnamese steel industry has
developed and the Vietnamese steel market becomes fiercely competitive. The
reality has proved that without a right development strategy, a company is most
likely to head into unavoidable traps, resulting in stagnant business or even
bankruptcy. The company is facing the question of how to protect its leading
position in the market, to withstand in the market and cope with constant changes in
the business environment as well as to increase market share.
This research deals with the formulation of competetive strategies for Hoa
Sen Group in Viet Nam. Thus, it is necessary to analyze external factors, operating
factors including political factors, economic factors, social factors, technological
factors, competitors, suppliers, customers, Intra-industry competition to identify


PART I: THEORETICAL FRAMEWORK OF COMPETETIVE
STRATEGY
4
I. STRATEGY CONCEPT AND STRATEGIC MANAGEMENT
4
1. Strategy concept
4
2. Strategic management
4
II. THE BUSINESS VISION
4
1. Identify current tasks, objectives and strategies of the organization
5
2. Business mission
6
3. Research on business environment
6
III. STRATEGY FORMULATION AND SELECTION
6
1. Long-term goals establishment
6
2. Strategy formulation and selection
6
2.1. Stage 1: Data input
6
2.2. Phase 2: General Strategic Planning
17
2.3. Phase 3: Formulation of the specific strategy
20

33
6.3. Considering the age structure of Labor
33
7. The main product of Hoa Sen Group
33
8. The production lines of Hoa Sen Group
35
9. Investement
35
10. Consumer market
37
11. Trademark, patent registration, copyright
37
II. INTERNAL ENVIRONMENT ANALYSIS – STRENGTHS AND
WEAKNESSES
38
1. Hoa Sen Group Introduction
38
1.1. HSG management model
38
1.2. HSG Business result
38
1.3. Consumption over the years
40
1.4. Revenue of products over the years
40
1.5. HSG Business’s Report in 2 years’s Evaluation
41
1.6. Key financial ratios of Hoa Sen Group
42

3.2. Domestic steel market status
63
3.3. Production capacity and equipment
65
3.4. Materials
65
4. Vietnam steel industry environment
66
4.1. Political factors
66
4.2. Economic Factors
67
4.3. Social and Demographic factors
70
4.4. Technological factors
71
5. Analysis of external factors
71
6. EFE matrix of Hoa Sen Group
73
IV. OPERATIONAL ENVIRONMENT ANALYSIS
75
1. Porter’s Five forces model
75
1.1. Potential competitors
75
1.2. Suppliers
77
1.3. Customers
79

95
1.1. SO Strategies
96
1.2. ST Strategies
96
1.3. WO Strategies
97
1.4. WT strategies
97
2. The sensitivity of pricing of Hoa Sen Group
98
3. SPACE matrix of Hoa Sen Group
99
4. Grand strategy matrix of Hoa Sen Group
101
5. IE matrix of Hoa Sen Group
102
6. Preliminary selection of Hoa Sen’s the strategic plan
103
B. STRATEGY SELECTION
103
1. Concentrated Growth Strategies of Hoa Sen Group
104
2. Integrated growth strategies of Hoa Sen Group
105
3. Low cost strategies of Hoa Sen Group
106
C. STRATEGY IMPLEMENTATION
108
1. Hoa Sen Group’s Strategy implementing in 2011

Appendix 03: HSG’s galvanizing steel production technology.
47
Appendix 04: Hoa Sen Group’s present value chain.
57
Appendix 05: Hoa Sen Group’s future value chain.
121

Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
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ABBREVIATIONS LIST

Aluzinc Plus : Pre-Painted Aluzinc steel sheet
Aluzinc : Zinc-aluminium alloy coated steel sheet
AS : Attractiveness Scores
ASEAN : Association of Southeast Asian Nations
AVSC : AuViet Seccurities Corporation
BVQI : Bureau Veritas Quality International
CA : Competitive advantage
CPI : Consumer price index
CPM : Competitive Profile Matrix
D/E : Dept/Equity
DWT : Dead weight tonnage
EBIT : Earning Before Interest and Tax
EFE : External factor evaluation
ERP : Enterprise Resource Planning
ES : Environmental stability

PHT : The Stock Exchange Symbol of PhucTien Joint Stock Company
QSPM : Quantitative Strategic Planning Matrix
R&D : Reseach & development
ROA : Return On Assets
ROE : Return On Equity
SMC : The Stock Exchange Symbol of SMC Trading- Investment Joint
Stock Company
SO : Strengths – Opportunities
SPACE : Strategic Position & Action Evaluation
SSM : The Stock Exchange Symbol of Steel Structure Manufacture Joint
Stock Company
SSSC : Southern Steel Sheet Limited Company
ST : Strengths – Threats
SWOT : Strengths - Weaknesses - Opportunities - Threats
Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
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TAS : Total Attractiveness Scores
TISCO : Thai Nguyen Iron and Steel joint stock Corporation
TKU : The Stock Exchange Symbol of Tung Kuang Industrial Joint
Stock Company
USA : United State American
USD : United State Dollar
VAT : Value Added Tax
VGS : The Stock Exchange Symbol of Vietnam Germany Steel Pipe
Joint Stock Company
VIS : The Stock Exchange Symbol of Vietnam - Itaty Steel Joint Stock
Company
VND : Viet Nam Dong
VRC : VietNam Rubber Corporation

Figure 1.3.3
Porter’s Five Forces
12
Figure 1.3.4
The principal needs analysis on competitors
15
Figure 1.3.5
SWOT Analysis
16
Figure 1.3.6
SWOT / TOWS Matrix
17
Figure 1.3.7
Price Sensitivity /Perceived Differences
18
Figure 1.3.8
Space matrix
21
Figure 1.3 9
IE Matrix
22
Figure 1.3.10
Grand strategy matrix
23
Figure 2.1.1
Image of a typical product of Hoa Sen Group
34


Master of Business Administration Capstone Project
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LIST OF TABLES
Page
Table 1.3.1
Some factors of Buyer Power
13
Table 1.3.2
Some factors of supplier power
14
Table 1.3.3
Some factors of industry's entry and exit barriers
14
Table 1.3.4
Analysis of Enterprise Position
19

Table 2.1.1
List of members of the Company
30
Table 2.1.2
Labor structure at 31.12.2009
32
Table 2.1.3
Structure of human resources under the age of Labor
33
Table 2.1.4

61
Table 2.3.2
Viet Nam GDP growth rate in recent years
68
Table 2.3.3
GDP rate in Viet Nam
68
Table 2.3.4
Foreign direct investment in Viet Nam
70
Table 2.3.5
The amounts of import and export in Viet Nam
70
Table 2.3.6
The impact of Hoa Sen’s external factors
72
Table 2.3.7
EFE matrix of Hoa Sen Group
73
Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
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Table 2.4.1 :
Information on some prominent Steel investment
projects that have been approved
76
Table 2.4.2 :
Raw material supply of Hoa Sen Group
78
Table 2.4.3 :

104
Table 3.2.5
QSPM – Integrated growth strategies of Hoa Sen
105
Table 3.2.6
QSPM – Low cost strategies of Hoa Sen
106
Table 3.3.1
Indicators measure the strategic objectives and action
plans
119

Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
xvi LIST OF CHARTS
Page
Chart 2.1.1
HGS organization chart

Chart 3.1.1 :
Forecast about cold rolled sheet to year 2025
93
Chart 3.2.1
Expand distribution system up to year 2015 Strategy
112 Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
1
INTRODUCTION
Vietnam‟s WTO accession has been a great landmark in the economy. A lot
of opportunities have been opened for several potential entrepreneurs who can
prove their wisdom in investment and research to take advantage of them. However,
there are always co-existing threats and risks to bring trouble to enterprises without
well considered counter-measures. With an increasingly fierce competition in the
market, every company should equip itself with effective competitive strategies to
assure a sustainable and strong development. A company with proper business
strategies deploying its own resources to make use of opportunities from outside
environment or avoid risks and overcome its weaknesses will totally be able to
compete and sustain in the market.
Competitive strategy is a special plan that every organization must set out.
For an enterprise, planning competitive strategy is the first function in the
management system to achieve its targets. This process must take into consideration
several objective factors of the business environment as well as subjective ones of
the organization, analyze information to provide a basis for business operations in

3. Nhan Le Thi Ai
4. Dung Tri Pham
5. Nghia Trong Ngo
6. Ha Manh Nguyen
1. Objectives and the scope of the essay
1.1. Objectives
The thesis “Hoa Sen Group’s competitive strategy for the period 2011-
2015” aims at these following targets:
- Indentify important opportunities and threats to the steel industry as well as
the Company‟s advantages and disadvantages.
Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
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- Outline a competitive strategy for Hoa Sen Group in the period 2011-2015,
on which basis overcome its disadvantages and promote its advantages to
make full use of business opportunities to maintain the sustainable and stable
development.
1.2. The scope of research
Hoa Sen Group acts in some fields such as cement production and trading,
real estate, production of galvanized steel sheet, pre-painted galvanized steel sheet,
zinc-aluminium alloy coated steel sheet, pre-painted Aluzinc steel sheet, black steel
pipes, purlins, etc… However, Hoa Sen Group has determined galvanized steel as
its key product from the beginning. In order to develop Hoa Sen Group, a decent
concentration on galvanized steel plays an essential role. Moreover, every business
area of Hoa Sen Group has its own independent elements. Within the limited
timeframe, the research only focuses on the galvanized steel industry.
2. Theoretical framework and method of research
- Theoretical framework: dialectical reasoning.
- The method of research: using a combination of different methods like
quantitative and qualitative methods, analysis, statistics, modeling, forecast

financial and strategic objectives. Financial objectives involve measures such as
sales targets and earnings growth. Strategic objectives are related to the firm's
business position, and may include measures such as market share and reputation.

Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
5 Source: Fred R. David
Figure 1.2.1: Model of Strategic Management .
1. Identify current tasks, objectives and strategies of the organization

Set annual
goals. Scan of the external
environment to
identify opportunities
and threats.
Scan of the internal
environment to
identify the
strengths and
weaknesses

Feedback
Feedback
Strategy
formation
Strategy
implement
Strategy
evaluation
Master of Business Administration Capstone Project
GaMBA01.C01 - Group5
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2. Business mission
Business mission creates the priority, strategies, plans and assignment. This
is a starting point for establish the management especially in management structure.
It allows the firm to have outline of direction and set up the targets.
3. Research on business environment