ADMINISTRATION PROGRAM
LUẬN VĂN

CHIẾN LƯỢC CẠNH TRANH CỦA CÔNG TY
VIGLACERA TIÊN SƠN

THESIS

“COMPLETING BUSINESS STRATEGY
FOR VIGLACERA TIENSON JSC.
IN PERIOD 2015-2020”


MBA Thesis

ABSTRACT
In the 21st-century competitive landscape, the goals of creating competitive
advantage and earn above-average return are challenging the enterprises, no matter
how large scale they are. Those strategic achievements must resulted by the effectively
implementation of a right business-level strategy. This business strategy must be
formulated on the base of external and internal environmental analyses. In another
word, the strategy must be formulated from full consideration and evaluation of all
available and potential opportunities and threats that might come from the external
environment, and of the strengths and weaknesses of the enterprise itself. The success
of the formulated strategy implementation does not depend on the enterprise leader’s
commitment only, but also depends on all its divisions’ operation in all periods of time.
Viglacera Tien Son Joint Stock Company is a producer of granite tiles, the
products that useful for architectural buildings. Founded in 2001 as a state-owned
company, which was a member of Viglacera Corporation, it was invested of more than
300 billion VND value for a granite tile factory with capacity of 3 million m 2 of
product per annual. Experiencing many rises and falls, it is now equitilized and


LIST OF ABBREVIATIONS
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MBA Thesis

Ass: Assistant
Bill: Billion
BOC: Board of Control
BOD: Board of Director
BOM: Board of Management
Dr: Doctor
FDI: Foreign Direct Investment
GDP: Gross Domestic Product
IMF: International Monetary Fund
Jsc : Joint Stock Company
MBA: Master of Business Management
Prf: Professor
R & D: Research and Development
SBU: Strategic Business Unit
USD: United States Dollar
VIBCA: Vietnam Building Ceramic Association
Viglacera Corp.: Vietnam Glass and Ceramic for Construction Corporation
VIT: Viglacera Tien Son Joint Stock Company
VND: Vietnamese Dong
WTO: World Trade Organization


leading position and compete with its rivalries?
2. Objectives & Aim
Objectives
Study on the strategic management with focusing on business-level strategy.
Competition analysis on ceramic for construction market.
Analyze the VIT’s competitiveness.
Recommendations for completion of VIT’s business strategy.
Aim
Give out the applicable and effective competitive strategy and action plan to
improve the VIT’s competitive capacity.
3. Research questions
In order to achieve the objectives of the Capstone Project, the author of this
Capstone Project will try to answer the following questions:
How is the competition in granite tile sector recently and hereafter?
What is the VIT’s competitive capability recently and in period of 2010-1015 ?
What are recommendations for completion of VIT's business strategies?
4. Method/Approaches
Empirical method
Approaches: statistics
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MBA Thesis

5. Data resources and processing
Data Resources
Secondary Source: Report and Data of VIT and its competitors.
Tertiary Source: M. A. Hitt, R. D. Ireland, R. E. Hoskisson - Strategic

The strategic management theory is reviewed in this chapter by some main parts
such as: definition, strategy’s levels, strategic analysis, formulating and selecting
business strategy, and strategic implementation.
Chapter 2: Actual VIT’s business strategy recently
Applying strategic analysis and look into the actual VIT’s operation and business
strategy application recently. Giving comments on its current business strategy.
Chapter 3: Completion of VIT’s business strategy in period of 2015-2020
Based on the analysis and found reasons in theory application, some suggestions
will be delivered to VIT in order to complete its business strategy, which is aiming to
improve its competitive position.

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MBA Thesis

Chapter 1. THEORY FOUNDATION OF BUSINESS STRATEGY

I.

GENERAL ON STRATEGY
1. Definitions
The strategy definition was formed long time ago, as a broad definition and
contains many complicated connotation. Militarily: at Alexander’s time (330 year
B.C.), strategy is defined as skills to develop forces and establish world domination
system. Economically: During the development of the world economy, many
definitions of strategy have been formed, for example:
+ Chandler (1962): “Strategy is the identification of the basic long term goals

International strategy

Functional strategies
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Operational strategies

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MBA Thesis

(Source:Griggs, 2009, Lecture slide of Strategy management, Part1, page 3).
Corporate (Company) level strategy is a statement on a long –term goals, oriented
development of such Company or Corporation. It is an action taken to gain a
competitive advantage through the selection and management of a mix of businesses
competing in several industries or product markets.
Business-level strategy refers to how is a firm able to have successful competition
in a market (or market segment). Business strategy reflects a firm’s belief about where
and how it compete over its rivals in the industries or product markets. It also identifies
competitive position for Strategic Business Units (SBU) and the way to effectively
allocate resources.
Functional strategy is a specific statement on goals and short–term action plan
used by functional departments (such as production, marketing, finance, R & D, etc.) to
achieve short – term goals of SBU and long term goals of a firm.
3. Strategic formulation and management process
Figure 1.2 – Model of strategy formulation and management process

Vision, mission and
strategic goals


of the defined levels. In order to formulate a strategy, strategic analysis is required.
Strategic analysis includes external and internal environmental analyses to determine
all the factors may influence the firm’s strategy. After being selected, a strategy will be
implemented by the firm. During the strategic implementation, the firm has to control
and evaluate the operation in all of its divisions in order to find out advantages and
disadvantages of the strategy itself and its implementation. The feedback information
will be useful for the firm in adjusting its strategies and the relevant implementation.
All of the stages of strategic management will be observed in the following parts in
this chapter.
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MBA Thesis

II.

VISION, MISSION AND STRATEGIC OBJECTIVES
1. Vision
Showing the highest and most general expectation of a firm, expressing ambition
about the achievement that the firm pursuits. Vision is composed of core ideology and
envision future.
Requirements of strategic vision:
+ The vision must be simple, clear and easy to understand.
+ Keeping a long enough period of time to adapt with big changes but also short
enough to devote best efforts of the whole firm’s employees.
+ Capable to concentrate resources with consideration taken to scale and duration.
+ Being usually involved by senior managers.
2. Mission

chosen of goals and strategies, formulates and consolidate its image over the public and
create the attraction to stakeholders.
A process of building a business mission is shown in the figure 1.3.
Figure 1.3 –Process of building a business mission
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Step 7
Forming initial ideas ofInternal
business
and
mission
Determi-ning
external analysis
idea Start
on business
buildingmission
a business
Verify mission
the business
Conduct-ing
mission
the
Review
business
and adjust
mission

Fortly, it is determined with a period of time.
Finally, it can provide criteria for evaluating the management implementation.
III.

STRATEGIC ANALYSIS
Analysis is one of separate stages of a new strategy formulation and management
(analysis, formulation and implementation). It plays a critical role and has great
impacts towards the orientation. Therefore, the more information is collected, the better
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MBA Thesis

it is in this stage. It is necessary to analyze external and internal factors that can
influence a firm’s strategies. The purpose of the analysis is to establish a table
containing strengths, weaknesses of a firm, opportunities and threats for its future.
1. General environment analysis
Figure 1.4 – General environment’s segments
Economic
Political / Legal

Socio-cultural

Threat of new
entrants
Bargaining power

Bargaining power

growth ratio of the economy, interest, exchange rate, inflation rate, etc.
1.2 – The technological segment
Pace of technological changes can greatly impact over whole organizations and
firms. The technological segment includes the institutions and activities involved with
creating new knowledge and translating such knowledge into new products, processes
and materials.
Technological changes include recreativeness and extermination, opportunities and
challenges. The changes can influence over the height of barrier of entrance and
formulate restructure of the industries at grassroots.
At global space, opportunities and threats of technological segment impact over
individual firms by quickly purchasing new technologies or inventing technology by
themselves.
1.3 – The socio-cultural segment
The socio-cultural segment is concerned with a society’s attitudes and cultural
values. Because attitudes and cultural values form the cornerstone of a society, they
often drive demographic, economic, political - legal, and technological conditions and
changes. A variation of the socio-cultural segment may create opportunities or threats
to a firm’s business, which is operating in the segment.

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MBA Thesis

1.4 – The demographic segment
The demorgraphic segment is concerned with a population’s size, age structure,
geographic distribution, ethnic mix, and income distribution.


to clarify key following issues on:
-

Typical economic features of the industry.

-

Competitive forces, nature and strength of every of them.

-

Motivations causing the changes in the industry and their influences.

-

Key factors for the success and failure in the competition.

-

Attractiveness in terms of ability of getting above average returns.
We can analyse industry environment and competition via the five competitive
forces model that developed by Michael E. porter. They are shown in the figure 1.5.

Figure 1.5 – The 5 competitive forces model

Threats of new
entrants
Bargaining

Bargaining

Trademark loyalty
It is the buyers’ love for existing products as they believe those products are
unique over time. A firm can create trademark loyalty by continuously promoting (e.g.
advertising, etc.) its trademarks and brand names; registering and protecting patent of
its products; improving products’ quality through research and development programs;
strongly focusing on product quality and after sale services. The trademark loyalty
causes difficulties for new competitors who seek for a market shares by entering the
industry.
Economy of scale

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MBA Thesis

It is the marginal improvements in efficiency the a firm experiences as it
incrementally increases its size. It means as the quantity of a product produced during a
given period increases, the manufacturing cost of each unit declines. New entrants face
dilemma when confronting current competitor’s scale economy. Small-scale entry
places them at a cost disadvantage. However, large-scale entry with big manufacturing
capacity has to deal with risks of strong competitive retaliation.
Capital requirements
Competing in a new industry requires resources to invest. Beside the physical
facilities, capital is needed for critical business functions. The new entrants must
consider the volume of required capital if available to pursue the apparent market
opportunity.
Switching costs
These are the one-time costs customers incur when buying from different suppliers.

are low and products are elementary with insignificant differentiation.
Dispersed industry structure usually brings more challenges than opportunities.

•

Concentrated industry: is an industry which is dominated by several large-scale
firms. The nature and intensity of competitive rivalry are hard to be forecasted
as firms are mutually dependent in this industry. Strong retaliation from
competitors can create a more dangerous competitive spiral.

Market demand
Market demand influences the intensity of competitive rivalry among existing
firms. Demand growth trends to loose the intensity of the competitive rivalry. In
contrast, the decline in demand will urge more intensive competition.
High exit barriers

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MBA Thesis

High exit barriers of an industry is including economic, strategic and emotional
factors which sometime cause the firms remain in the industry even though the return
on their invested capital are low or negative.
Common exit barriers of an industry are (1) specialized assets (assets with value
linked to a particular business or location); (2) fixed cost of exit (e.g. labor
agreements); (3) emotional barriers (emotional reason); (4) strategic inter-relationship
(relationship of mutual dependence between one business and other parts of a firm’s

Internal environment includes internal components that can be controlled by the
firm. Through an analysis of internal environment, a firm determines what it can do –
that is, the actions permitted by its unique resources, capabilities and core
competencies.
Strategic
competitivene

Figure 1.6 – The components of
internal environment analysis

Competitive
advantage
Discovering core
competencies
Core
competencie
s

Value chain
analysis

4 criteria of
sustainable
advantages

Capabilities

Resources

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