Luận văn thạc sĩ Xây dựng chiến lược kinh
doanh của công ty cổ phần xi măng Thăng
Long
MAKE THE BUSINESS STRATEGY
FOR THE PERIOD OF 2011- 2015 OF
THANG LONG CEMENT JOINT STOCK
COMPANY

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CONTENTS
Page
Acknowledgment…………………………………………………………………1
Contents…………………………………………………….……………………..2
List of tables………………………………………………………………………5
List of figures/ diagrams………………………………………………………….6
OVERVIEW………………………………………………………………………7

CHAPTER 1: ARGUMENT ………………………………..…………..8
1.1. Argument about business strategy for the enterprise …………………..8
1.1.1. Some definitions about strategy ………………………………….………8
1.1.2 Nature of the business strategy…………………………………..………. 9
1.1.3 Characteristics of business strategy …………………………..…………10
1.2. Process of making strategy………………………………………………. 10
1.3. Model – analysis of the external environment ……………………………11
1.3.1. Model – macroscopic analysis (PESTLE model)…………..………….11
1.3.2. Model of 5 forces of Michael – sector analyis …………..…………….12
1.4. Model of internal analysis of the enterprise……………………..……….13
1.4.1. Value chain………………………………………..…...………………..13
1.4.2 Internal Factor Matrix- IFE………………………..…..…………………….13

2.3.4 Total IFE point of Thang Long Cement Joint Stock Company ………….…35
2.3.5 IE Matric…………………………………………………………………………….35
2.3.6 Matrix of strategic space of Thang Long Cement Joint Stock Company ….36
2.3.7. Sustainable competitiveness advantage …………………………………..37
2.4. Total SWOT matrix of Thang Long Cement Joint Stock Company ….40
2.5. Limitations, existing reasons in Business strategy ………………………..41
2.5.1 Limitations………………………………………………………………………….41
2.5.2 Reasons………………………………………………………………………………42
CHAPTER 3: SOLUTIONS, SUGGESTIONS AND CONCLUSION…….. 43

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3.1. Business strategy of the company in the period of 2011 – 2015 ………….43
3.1.1. Vision………………………………………………………………………………...43
3.1.2. Mission……………………………………………………………………………..43
3.1.3 Targets for the period of 2011 – 2015 …………………………………………..43
3.1.4. Selection of business strategy for Thang Long Cement Joint Stock Company
for the period of 2011 – 2015 ……………………………………………………..……44
3.2 Some solutions to implement successfully the selected strategy …..……..52
3.2.1 Change of the financial management method of the company ……….………52
3.2.2. Re-developing the Marketing activity, in which respecting the system of
distribution channel; activity of customer services……………………………..…….54
3.2.3. Establishing the Research and Development Department……………………57
3.2.4. Applying the operation method of the Factory under international regulation
for a modern cement factory…………………………………………………………….57
3.2.5. Development of human resource ………………………………………..………58
3.3. Roadmap of implementation of business strategy of Thang Long Cement
Joint Stock Company in the period of 2011- 2015 …………………………..59
3.4. Supervision of implementation of business strategy in the period of 20112015 ……………………………………………………………………..………59


LIST OF FIGURES/ DIAGRAMS
Page
Figure 1-1 Model of the process of strategic management…………………...……11
Figure 1-2 Diagram of structure of sector competitiveness ………………………12
Figure 2-1: Diagram of organization………………………………………………19
Figure 2-2: Revenue structure of Thang Long Cement under products ……..……20
Figure 2-3: Market structure of Thang Long Cement in Vietnam…………………21
Figure 2-4: Market share of Thang Long Cement in the period of 2008 – 2010…. 21
Figure 2-5: Situation of cement consumption in the period of 2008 – 2010 and the
forecast for 2015 ………………………………………………………….………24
Figure 2-6: Process of cement production………………………………..……….30
Figure 2- 7 Value chain relating to the operation of Thang Long Cement Joint Stock
Company ……………………………………………………………….…………32
Figure 2- 8g: SPACE matrix of Thang Long Cement ……………………………37

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OVERVIEW
Vietnam’s economy has had the growth of 6,78% in 2010 and forecasted to
continue the higher growth in coming years; and the construction sector will have
the growth level twice in comparison with that of GDP. However, it is different
when considering in each sector, the demand for construction materials is increased,
but according to the forecast of Ministry of Construction, from 2011, the supply of
cement could be redundant over 10 million tons and higher than in next years when
many factories will come into operation.
Thang Long Cement Joint Stock Company was established in 2001, passed
by the construction process, in 2008, the factory came into operation. For the
challenges of the cement redundancy as the forecast, making a long-term business

According to normal definition, strategy is a military term used to show the
plan of disposing the troops in battle formation and distribution of the force with the
target of winning the enemy or reaching its military target. Carl von Clausewitz –
the artist of the war of the 19th century – described the strategy as “making the plan
of war and making the operation campaigns. Those campaigns will decide the
participation of each individual”. Historian Edward Mead Earle described the
strategy as “the art of supervision and using the resource of a country or an
alliance of the countries, aiming at ensuring and increasing the effectiveness for its
essential rights”
Nowadyas, definition of strategy is used popularly and considered as the
foundation for the operation of the business enterprise. There are many definitions
of the strategy such as Strategy is the model of targets, destinations and plans to
reach those targets (Kenneth, 1965. Strategy is the plan of controlling and using
the resource of the organization like as human resource, assets, finance...aiming at
improving and ensuring its essential rights. Kenneth Andrews is the 1st person to
make the outstanding ideas in the classic book The Concept of Corporrate Strategy.
According to him, strategy is what an organization must implement basing on its
strengths and weaknesses in the context including the opportunities and even
threats.
1.1.2 Nature of business strategy
- Business strategy of the enterprise is the business method of the enterprise, in
terms of Business strategy, it is the operation rule of the enterprise; method of using
the resources; foundation to solve every problem of the enterprise.
- Business strategy is the expression of the concept of the enterprise’s value,
improvement spirit, strong willing of the enterprise’s leader, reflecting evaluation of
the leader about the objective situation, subjective condition of the enterprise.

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7. Evaluate and implement: requirement of resource, threats and benefits.
Process of strategic management include: With process of strategic management
which is described as in Figure 1-1 below
Mission, vision
Internal analysis
+ Model:
- Value chain,
- Competitiveness
advantage
+ Taken conclusion:
- Strengths
- Weaknesses

Make and select
strategy
(SWOT)

External analysis
+ Macroscopic
analysis: external
environment
+ Microscopic: model of
5 competitive forces

Selected strategy
Cost Leadership
Differentiation

- Global environment
Macroscopic analysis allows the enterprise to evaluate the macro-economic
factors which have strong influence on the activities of the enterprise and basic
changes in competitive environment. Macroscopic analysis can be illustrated as
followed:

1.3.2. Model of five forces of Michael (Five force )1- Sector analysis
Model of analyzing 5 forces of Michael Porter, helping strategists to analyze
the above forces – completive structure of the sector, is summarized in the followed
diagram:
Threats of potential competitors

Negotiation
capacity of
supplier

Competition of
existing
companies

Negotiation
capacity of buyer

Threats of
substitution
products

Figure 1-2 Diagram of structure of sector competition
Source: Michael E. Porter- 1980
- Threats of potential competitors: the enterprise which has newly participated in

1.4.1. Value chain
Value of an enterprise is measured by the quantity which the buyer is ready
to pay for the product or service. The enterprise has the profit if the created value is
larger than the cost.
Michel Porter, originated from analysis “each company is the collection of
activities to implement, aiming at designing, producing, selling, delivering and
supporting for the products”. Each operation increases the value of the product.
“Value chain” is divided into main activities and support activities.
1.4.2 Internal Factor Matrix- IFE

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Using this matrix in analyzing the internal factors of the enterprise in
comparing with the competitors. From calculating the score of the company,
analyzing and defining the position in comparison with the competitors by the
internal force.
1.4.3. External Factor Matrix- EFE
Using this matrix in analyzing the external factors of the enterprise in
comparing with the competitors. From calculating the score of the company,
analyzing and defining the position in comparison with the competitors from the
influence of external factors.
1.4.4. Total IFE point.
Summation from analysis of internal – external factors
1.4.5 Matrix of strategic space of the enterprise (Space matrix)
From calculating about financial potential, strengths of the sector,
competitive advantage and stability of environment to make score of defining the
position of the enterprise

1.4.6. Sustainable competitiveness advantage of the enterprise



the organization; Weaknesses and opportunities, threats from the external
environment.
SWOT model is used to analyze the strengths, weaknesses, opportunities and
challenges of an enterprise to define suitable Business strategy. This business
strategy will promote the strengths of the enterprise; resolve the weaknesses in
taking advantages of the business opportunities and overcoming the challenges of
external environment.
1.6. General competition strategies

1.6.1. Cost Leadership Strategy
Is strategy to produce the goods or services with lower cost than the
competitors. This strategy has 02 basic advantages: Firstly, with lower cost, leader of
the cost can make the lower price than competitors but still collect the profit same to
the competitors. If the enterprises in a sector reach the similar values for their products,
leader of the cost can collect the higher profit because it has the lower cost; secondly, if
the competition in the sector is increased and the enterprises compete with each other
by the price, leader of the cost has the ability to stand more firmly in the competition
than other enterprises because of its lower cost.

1.6.2. Differentiaton Strategy
Purpose of strategy of the distinction of the products is to reach the competitive
advantage by creating the products, goods or services which are recognized by the
consumers to be the most original. The capacity of an enterprise with the distinction
of the products to satisfy the demand of the consumers under the way which the
competitors are impossible to have, it means it could set up the remarkable higher
price than average level of the sector. The capacity of increasing the revenue by
reaching higher price (but not by reducing the cost like as the leader of the cost)
allows the enterprise with the distinction of the products to operate better than its

score that will be the selected method
All in all, Chapter 1 makes clearly argument method to design Business
strategy. Firstly, introducing the concepts, nature, characteristics of Business
strategy; secondly, introducing the models of analysis of internal and external
environment of the enterprise including: model of analysis of external environment,
model of 5 forces, model of value chain, analysis of sustainable competitive
advantage and summation model – SWOT; thirdly, analyzing basic competitive

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strategies and selecting Business strategy under weight method. Moreover, in the
analysis part, writers’ group will also use the tools of Marketing theory.

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CHAPTER 2: ANALYSIS OF REAL SITUATION OF THANG LONG
CEMENT JOINT STOCK COMPANY
2.1. Overview of Thang Long Cement Joint Stock Company
- Established on May 28th 2001, certificate of business registration No. 2203000011
issued by Division of Business Registration – Department of Planning and
Investment of Quang Ninh province
- Factory and office are located in Le Loi commune, Hanh Bo district, Quang Ninh
province; grilling station is located in Hiep Phuoc industrial area – Nha Be – Ho
Chi Minh City
- President of Executive Board: Mr. Tien, Vu Van
- General Director: Mr. Do, Le
- Established by shareholders: Hanoi General Export Import Joint Stock Company
(GELEXIMCO), Vietnam Machine Installment Corporation (Lilama) and some

Secretary/Assistant

PRODUC
TION

BUSINES
S

FINANCE

ADMINISTR
ATION

PROJE
CT

REPRESENTAT
IVE OFFICE OF
THE CENTRAL

HCMC
BRANC
H

Figure 2-1: Diagram of organization
Source: Administration area of the Company
Total personnel of the whole company at December 31 st 2010 is 709, in
which main factory in Quang Ninh and Hanoi office are 619 people, office in the
Central is 09 people, HCMC branch is 81 people. About knowledge degree, there is
01 doctor, 05 masters, 239 graduated people, and the left are graduated from the

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1,352


VND
3
Profit
billion
VND
4
Total asset
billion
VND
5
ROA
%
6
ROE
%
Source: Financial area of the Company

-234

-323

-578

4,954

5,627

Source: Collection of writers’ group
From Figure 2-2: shows the main income of sales of Thang Long cement is
from cement, Clinker is fluctuated around 30%. This is the income resource with
stable structure within 03 last years.
About the market, Thang Long cement is expressed as follows:

Figure 2-3: Market structure of Thang Long cement in Vietnam
Source: Calculation and collection of writers’ group
From figure 2-3, it shows, the market of Thang Long cement in Vietnam is
still concentrated in the North, however market share was partly decreased in 2009,
2010 because of gradual increase of market share in the Central, the South.
In order to have the overall picture about business results in the period of
2008 – 2010, writers’ group collected, summarized the data about the market share
of Thang Long cement in comparison with Vietnam Cement Corporation (Vicem),
joint venture cement companies, joint stock cement companoes and separated
market share of Thang Long cement.

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Figure 2-4: Market share of Thang Long cement in the period of 2008 –
2010
Source: Calculation and collection of writers’ group
Through figure 2-3, it shows market share of Thang Long cement was
increased gradually through years from 2, 5% in 2008 to 3, and 7% in 2010, making
up high rate is still Vietnam cement corporation (Vicem) where there are many
member factories
2.2. Analysis of external environment of Thang Long Cement Joint Stock
Company
2.2.1. Analysis of macroscopic environment (PESTLE model)

Currently, Vietnam has also been applying 02 these technologies into producing
cement. The factories are built under joint venture form, mainly Japan’s technology;
and other factories mainly import the equipments from Europe, from countries:
France, German, Switzerland… Technology of Thang Long cement factory is from
Polysius Group – Republic of German.
2.2.1.5 Global environment: development of construction sector in the world
is in the boom period. The demand for the cement is very large, current
concentrating on the market of Arab, Africa. This is also good opportunity for
Vietnam’s cement factories participating in the import. In 2009, Cam Pha cement
exported to Africa with 20.000 tons. At the beginning of 2011, Thang Long Cement
exported to Africa with 25.000 tons for the export plan of 50.000 tons.
2.2.1.5 Environment of social culture: In construction, besides the materials
to make the project to be firm such as iron, steel, stone, sand, cement is the
indispensable factor. It could be said that when mentioning the construction
material, it means the cement.
2.2.2. Analysis of environment of cement sector (model of 5 forces):
2.2.2.1 Internal competition of the sector: internal competition of the sector
is happening strongly; total the cement factories which have been operating and
licensed are 61 factories including: Vietnam’s Cement Corporation and 7 member
companies, 48 Cement companies of mixed ownership, 05 joint venture cement
companies. Cement factories which have been operating for a long time are Hoang
Thach Cement, Bim Son Cement, But Son Cement, Ha Tien Cement.

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Unit: million tons

Figure 2-5: Situation of cement consumption in the period of 2008 – 2010 and
forecast to 2015

cement is not clear. In order to compete, the enterprises must lower the production
price, implement the policies for preference, after-sales, customer service. This
competition happens among the enterprises of Vietnam’s Cement Corporation and
other private cement enterprises; between domestic enterprises and foreign invested
cement production enterprises. However, competitive advantage is still for the
enterprises directly under Vietnam’s Cement Corporation with over 40% of
production factories and 30% market share because they are near material resource,
the machines, equipments came to an end of depreciation period, but they meet the
challenge that is backward equipment technology and mostly originated from
China, thus the production price is high, loss in production process is much.
Advantage of the cement production enterprises with private ownership is because
of new investment, modern technology, low production price and equal quality to
the cement of Vietnam’s Cement Corporation.
2.2.2.2 Power of the supplier: strongly affect because of the input price
including coal, electricity, and limestone;
The input materials of cement production are limestone, coal, electricity and
additive. In which, supply of limestone, coal, electricity has influence on the

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