LUẬN VĂN
XÂY DỰNG CHIẾN LƯỢC KINH DOANH CHO CÔNG TY CỔ
PHẦN PHÍCH NƯỚC RẠNG ĐỘNG
BUILDING BUSINESS STRATEGIES FOR RANG DONG LIGHT SOURCE
AND VACUUM FLASK JOIN STOCK COMPANY IN THE PERIOD OF
2010 – 2015

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INTRODUCTION
In the competitive world today, the existence and development of enterprises
depend greatly on the ability of continuous innovation and adaptation with the
changes of environment. In order to do that, companies need to clearly identify their
abilities, purposes, achievements, challenges... Those firstly depend on their setup
and implementation of enterprises’ business strategies. Proper business strategies
will ensure the existence, rapid development, long-term sustainability according to
the long-term goals.
There has been a lot of research on business strategy and method of business
strategy. Many researchers used quantitative and qualitative approaches in their
works. Each approach has its own advantages and disadvantages. Optimal solution
is to apply these two approaches in building business strategies for enterprises to
maximize advantages and minimize disadvantages.
Within the research of this great exercise, two selected matrices are:
Strengths-Weaknesses-Opportunities-Threats Matrix (SWOT Matrix) and Internal –
External Matrix (IE Matrix), which is representative for qualitative and quantitative
methods of analysis. Research methods will be applied to a specific case: Building
business strategies for Rang Dong Light Source and Vacuum Flask Join Stock
Company in the period of 2010 – 2015.
Rang Dong Light Source and Vacuum Flask Join Stock Company (Rang
Dong Company) was established in February 1961, which was originally as Rang

Research methods
Thesis using the method of the research combination of logic and history,
general analysis methods, the scientific statistics method.
Thesis based on the theory contruct of business strategies in the market
mechanism, combined analysis of synthesis of empirical research.
Research result to dates
Until now, there are many researches on business strategies and method of
building business strategies, SWOT Matrix and IE Matrix specifically. However,
those researches only used either qualitative or quantitative approach. Contribution
of this exercise is the ability, approach and conditions to apply both tools.

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In Rang Dong Company, there are not research on business strategies and
method of building business strategies. The activity of business strategies, which is
implemented by Accounting - Finance Department, is not the scientific and
professional.
Therefore the exercise of “Application SWOT Matrix and IE Matrix
analysis model on building business strategies for Rang Dong Light Source and
Vacuum Flask Join Stock Company in the period 2010 – 2015” is necessary and
valuable in practical constraints.
Structure of the exercise
Besides the introduction, conclusion, table of contents and reference
materials, the exercise is divided into three main sections:
Chapter I: SWOT Matrix and IE Matrix Model – An effective instrument in
building business strategies.
Chapter II: Application of SWOT matrix and IE matrix models in analyzing
business strategies.
Chapter III: Application of SWOT matrix and IE matrix models in

development, and market penetration, reduce or waive take-over or joint venture.
Strategy is a collection of goals and policies as well as essential plans to
achieve those goals. Business strategy of an enterprise is an action plan to
implement goals of the enterprise.
Business strategy is intriguing strategy, roads, measures to ensure stable and
long-term existence, development in accordance with development goals that
enterprises have set based on the objective and subjective conditions, the resources
of business.
So there are lots of opinions about business strategy, but it could be the most
common point of business strategy as follows: Business strategy is the collection
of long-term goals and the ways to achieve long-term goal that is based on
objective and subjective conditions, and the resources of the business. Business
strategy is determined for a certain period; it is the orientation and can be adjusted
to changes of the environment.
Based on the scope, business strategies are divided into two types: general
strategy (or overall strategy) and partial strategy.

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Based on building-level strategies, business strategies are divided into:
strategy of enterprise, strategy of base unit (SBU) and functional strategy.
Based on the content and the field of governance, business strategies are
divided in accordance with management fields in enterprises.
Based on the nature and scope of work, business strategies are divided into
four types: combination strategy, specialization strategy, expansion strategy and
specific business strategy (narrow, link ...).
1.1.1.2. Business strategy requirements
Business strategy of an enterprise should ensure the following requirements:
Firstly, business strategy has to ensure the generalization. Business strategy

plan and the basic conditions to achieve objectives. In the present competition
context, the decisions of the enterprises are always limited by resources constraints.
Thus business strategy has to determine the scope of business in which the
enterprise must well define objectives of the business to avoid the spread of
resources. A well-defined business plan is a set of policies, measures and resources
- technology - labor conditions for the achievement of business objectives.
Requirements for the explanation of business plan are adequate, concise and clear.
1.1.1.3. The role of business strategy
It is difficult to find a direct relationship between business strategy and the
increase of profits. However, it cannot be denied indirect contribution to the benefit
of the business strategy through the exploitation of opportunities and competitive
advantages.
Firstly, business strategies help business leaders and individuals in the
enterprise understand the goals and direction of their enterprise. Through which
people know their position, role, responsibilities and their ability to contribute to
common goals. So through the enterprise achievement of common goals, each
member also achieves his goals. Besides, in business practices, the environment
changes also require enterprises to adjust it and to adapt to those changes. Business
strategy to help enterprises keep to their objectives.
Secondly, when building business strategies managers must make
predictions about the business environment in the future. Therefore business

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strategies help business manager’s better capture and take advantage of
opportunities, reduce the risk that may occur in the future.
Thirdly, thanks to business strategy that the decisions of the enterprise are
completely active. Enterprises without clear business strategies often react passively
when the business environment changes. Sometimes this reaction also is effective






General objective.
Specific objectives (annual).
Strategy.
Schedule.
Review Plan.

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Do

Implementation of project

Check

Check and communicate
 Monthly
 Quarterly
 Annually
Review or standardize
 Based on the evaluation.

Act

Different point of view states that the building business strategy consists of

divisions

Assess and improve
business strategy

According to this point, the construction business strategy is 10 steps work,
dividing into three main steps: analysis of objective and subjective conditions of
enterprise; design of business strategy, assessment and improvement of business
strategy.
Also following 10-steps procedure, the following model start from the
review mission objectives and current strategies of the enterprise:

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Diagram 1.2: COMPREHENSIVE STRATEGIES MANAGEMENT MODEL
Environment
research to
identify main
opportunities
and challenges
mainly
Review
mission
objectives
and
current
strategies

Set long

proceed

Build
strategy

Measure
and
evaluate
the level of
implement
ation

Implement
strategy

Assess
strategy

There are many opinions about building business strategy of the enterprise;
departing points of each model are different. However, in general, the process of the
business strategy must include 7 basic steps as follows:

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Diagram 1.3: PROCEDURE CONSTRUCTION BUSINESS STRATEGIES
Analysis of business
environment

Analysis of internal

enterprises. Influencing factors include stages of economic cycles, interest rate
policies, fiscal and monetary policies, national income trends, inflation, tax policies,
and so on.
Political and legal environment has more and more influence on activities of
enterprises. The Government promulgates policies, regulations which require
businesses to comply with such as the tax laws, the laws on environmental
protection, the laws of international trade, law on advertisement... and ensures the
stability of politic and law.
Social environment includes complex factors, which change slowly and are
difficult to recognize. When analyzing the impact of social factors, people often pay
attention to the following factors: consumption trends, living standards, age, gender
- gender equality, career... and a number of population factors as speed growing
rate, change trends, population density...
Natural environment: for industry in general, people pay particular attention
to the impact of the manufacturing process of the enterprises to the environment.
Increasing treatment cost of wastewater, solid waste, gas is an important factor to
consider when deciding to invest.
Scientific and technological environment: Never has the science and
technology developed as fast as present. Modern technologies continuously create
and that makes enterprises force the risk of technological lag behind.
Micro environment
Micro-environment includes many factors that decide the nature and extent
of competition in the industry as current competitors, potential competitors,
consumer, suppliers and substitute products.
In competition, the first and most important problem that enterprises need to
consider is current competitors of the enterprise: (i) current competition strategies

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focused in internal analysis are: human resources, manufacturing and research, field
marketing, finance, economic linkage and cooperation...
Production and research abilities, which include two independent aspects but
have close relationship, are production and research and development (R & D). To
assess production capacity, it is necessary to consider: production ability of main
products, productive equipment and technology, organization and operation of the
manufacturing process, the quality management system, products structure, life
cycle and the competitiveness of each product ... To assess the capacity of research
it is necessary to pay attention to the ability to develop new products.
Labor is the factor which plays an important role and is a valuable asset of
the enterprise. Evaluating the human resources of the enterprise which are divided
into the administrators and direct workers bases on different evaluation criteria. In
particular, assessment of administrators needs to pay attention to skill management,
skills management, working style, ethics. For direct workers, the most important
aspects are working skills, qualification and discipline.
Assessment of financial capacity must base on three main criteria: payment
ability, rate of capital turnover and profitable ability. Payment ability shows the
capacity of payment of critical debts; the rate of capital turnover expresses business
capacity and business management; profitable ability shows the effectiveness of
business investment activities.
Rating marketing capacity should pay attention to: the marketing activities
and marketing activities evaluation, brand motivation activities, building and
managing distribution channels, trade promotion activities... Distribution channels
organization and maintenance should be specially focused.
Economic linkage and cooperation show the sensitive ability to capture
market needs choose business partners to minimize the weaknesses and to utilize
strengths.


direction and objectives. They should base on the results of the analysis and their
differences must be clear.

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There are many applicable forms and methods in the formation of the
strategies in this period. The use of selection models which consider data collection,
data connection and information analysis, the final product is a strategy to pursue.
Models such as SWOT, SPACE, BCG, IE, competitive positioning Matrix CP, and
GE ... should be used for more accurate quantitative assessment.
1.1.2.5. Business strategy selection
Once business plans have been developed it is necessary to conduct analysis
and assessment of these plans to select an optimal plan. Each plan has its
advantages and disadvantages.
There are many approaches to evaluate strategic plans. It is necessary to
identify standards in assessing plans. Different criteria for evaluating plans could
lead to different selection.
The standards must consider different aspects, and help managers select a
business plan which meets the following conditions: environmental conditions and
circumstances, cycle life of products and market potentials, overall and long-term
interests of the enterprise, utilization of enterprise’s production potentials and
power; enterprise’s financial, facility and labor ability, in accordance with the
internal policies, business philosophy, management style of the enterprise…
1.2. SWOT MATRIX AND IE MATRIX MODEL
1.2.1. SWOT Matrix
1.2.1.1 SWOT Matrix Description
Strengths - Weaknesses, Opportunity - Threats Matrix (SWOT Matrix) is a
tool to develop strategies which combines internal strengths and weaknesses of the
enterprise with opportunities and risks from the environment. SWOT analysis is key

(List)

WT: Strategies
(List)

SWOT Matrix includes 9 cells of which 4 cells are used to the list strengths weaknesses - opportunities - threats factors, and the other 4 cells to list formed
strategies, top-left cell leaves blank.
1.2.1.2. SWOT Matrix Contents
To analyze SWOT for an enterprise, it is necessary to analyze the
environment, collect information and answer the following questions:
Strengths: What are the advantages of the enterprise? Which activities does
the enterprise implement the best? Which resources does the enterprise have the
best advantage? It needs to consider issues on aspects of enterprise itself and others,
and to practically and objectively evaluate them.
Weaknesses: What are main weaknesses? Which weaknesses can be
improved? What does the enterprise need to avoid? Why can competitors do better?
It needs to play attention to market information, which weaknesses that competitors
can see but the enterprise cannot.
Opportunities: What are the best opportunities? Which trend is the market
concerned of? The most useful search method is to review the strengths of the
enterprise itself and ask the question whether these advantages can bring in new
opportunities. To the contrary, it is necessary to review the weaknesses and ask
questions whether there is any opportunity when eliminating these weaknesses.
Threats: Which obstacle does the enterprise cope with? What are
competitors doing? Do specific requirements of product, service change? What are
the risks of technology change to the enterprise?

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It is a dimensional analysis with a group of strategic plans for enterprises to
assess and select;
Strategic plans are diversified, flexible. It is possible to choose a major
strategic plan in combination with other strategic plans to form a complete strategic
plan...
Disadvantages
However, SWOT Matrix also has some disadvantages as followed: it is
qualitative and difficult to combine with internal and external factors. It requires
good judgments and difficulty to decide the final plan...
1.2.2. IE Matrix
1.2.2.1. IE Matrix Description
Internal - External Matrix (IE Matrix) also called the investment analysis
matrix, because it analyses and marks enterprise’s departments in a chart. Circle
dimension shows percentage of sales of each department, and circle represents
percentage of the profits of each department.
Figure 1.1: IE MATRIX TABLE

Total
point
of
EFE
matrix

Total point of the IFE matrix
Strong
3-4
High 3-4



IE Matrix is based on two main aspects: the total points of IFE Matrix
(Internal Factor of Environment) on the X axis and the total points of EFE Matrix
(External Factor of Environment) on the axis Y. Theatrically, it is necessary to setup
IFE matrix and EFE matrix for each department of the enterprise through which the
image of each department can be seen in the IE matrix. However, in practice, people
often set up IFE matrix and EFE matrix at enterprise level to compare among
different enterprises.
EFE Matrix evaluates the response of an enterprise to the elements of
external environment. IFE Matrix assesses the internal strength of the enterprise.
All the boxes in the same column have the same total important points of an
IFE Matrix, including 3 levels of weak, medium and strong points, 1.00-1.99, 2.002.99 and 3.00-4.00 correspondingly.
Region I, II, IV: construction and development strategies should be applied.
Region III, V, VII: hold and maintain strategies should be applied
Region VI, VIII, IX: harvest and remove strategies should be applied.
1.2.2.2. IE Matrix Contents
IE Matrix is built from the results of IFE and EFE matrix, so building IE
matrix should start from the construction of IFE and EFE matrix.
EFE Matrix
External factors matrix allows managers to evaluate enterprises’ reaction
ability to the impact factors belonging to the business environment. Construction of
EFE Matrix includes six steps:
Step 1, Business environment analysis of enterprises, including all elements
of macro and micro environment which affect to the results of business strategy
implementation.
Step 2, Listing external factors which decide the success of enterprises as
identified in step 1. Minimum factors are 5, typically 10.

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4

Market Needs

5

Domestic
and
Competition

Ratio

Points
1-4

Convert
Points

business

International

…
Total

1

1-4


Research
capacity

4

Human resources quality

5

Financial Capacity

6

Marketing capability

and
and

Ratio

Points
1-4

Convert
Points

structure,
production
development


Contrary to SWOT matrix, IE Matrix is quatitative. From the analysis
results, it is possible to identify strategic plan because this matrix is divided into
three main regions…
Disadvantages
However, application of IE matrix is quite complex because two Matrices –
EFE Matrix and IFE Matrix - must be created and then General IE Matrix is
created. Besides, the number of strategic plans is few, and is not able to combine to
form the general plan...
Because of the advantages and disadvantages of each model, the application
of each model in building business strategies of enterprises will be limited and
difficult. On the other hand, the basis for building both these matrices is the result of
analyzing the business environment and internal environment of enterprise.
Therefore, while applying both SWOT Matrix and IE Matrix is necessary and
scientific.
1.3. APPLICATION OF SWOT MATRIX AND IE MATRIX IN BUILDING
BUSINESS STRATEGIES
Applying SWOT Matrix and IE Matrix in building business strategy of the
enterprise will be conducted in two phases:
Phase 1, using SWOT Matrix and IE Matrix and SWOT analysis of each IE
group elements under macroeconomic environment, the environment of micro
enterprises and capacity analysis of the business in its own governance. This results
in phase 2.
Phase 2, based on analysis results of phase 1, SWOT matrix and IE matrix
are created and analyzed at enterprise level. Results SWOT and IE analysis for each

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group of factors and fields is the basis for evaluating of strengths - weaknesses,
opportunities - threats in SWOT matrix and factors marking in IE matrix.

Creating EFE Matrix to evaluate response capabilities of enterprises in the
face of the change of each factor;
Creating SWOT Matrix (SW) to analyze the strengths and weaknesses of
enterprises in each field;
Creating IFE Matrix to assess the strength of enterprises in each field.
Based on the analysis results of these matrices, they are synthesized into the
SWOT Matrix, IFE and EFE Matrix for enterprises to form four groups of business
strategies. They are Strengths - Opportunities strategy, Weakness - Opportunities
strategy, Strengths - Threats strategy, and Weakness - Threats strategy.
Business strategy Selection based on four groups of strategies needs to
follow two steps:
Step 1, based on the location of enterprises in the IE Matrix, determine the
overall strategy that the enterprise should apply. Including one of three strategic
steps strategy: construct and develop, hold and maintain, harvest and remove. Then
identify the main strategy from four groups of strategies in SWOT Matrix.
Step 2, use the scoring method to evaluate the advantages - disadvantages of
each plan to select the best strategic plan for enterprises. There are many methods to
choose the final strategic plan, in which scoring method is commonly used.
This method has advantages which are quantitativeness, objective
assessment, and multi-dimension evaluation.
Selection business strategy by scoring method
Step 1, determine the criteria to evaluate business strategies, including
internal and external criteria, strengths and weaknesses of enterprises.
It is not necessary to select strengths or weakness, but to select the factors
that affect the performance of the enterprise. The criteria are determined very
quickly, easily from the results of SWOT and IE analysis.
Step 2, determine the ratios for each factor from 0.00 (not significant) to 1.00
(very important). The total ratio of all factors is 1.

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