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NAME OF STUDENT Nguyen Tuan LinhREGISTRATION NO. 1013107073UNIT TITLE Unit 7: Business StrategyASSIGNMENT TITLE Strategy Formation and PlanningASSIGNMENT NO 1 of 3NAME OF ASSESSOR Ha Son TungSUBMISSION DEADLINE 10:00 am, 22 October 2013

I, __________________________ hereby confirm that this assignment is my own work and not copied or plagiarized from any source. I have referenced the sources from which information is obtained by me for this assignment.

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NATIONAL ECONOMICS UNIVERSITYBTEC HND IN BUSINESS AND MANAGEMENT

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ASSIGNMENT GRADE

Unit outcomes

Outcome Evidence for the criteria

Feedback Assessor’s decision

Internal Verifica

tion

Understand the process of strategic

planning

(1)

Explain the strategy

contents and terminology –

missions, visions,

objectives, goals, core

competencies

1.1

Be able to formulate a new

strategy

(2)

Produce an organizational audit for a

given organization

2.1

Carry out an environment audit for a

given organization

2.2

Explain the significance of stakeholder analysis

2.3

Merit grades awarded M1 M2 M3

Distinction grades awarded D1 D2 D3

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I. Introduction

Milk is the indispensable thing in people’s lie, it does provide strengthen, mental… In some developed countries, milk has become a daily necessity and as a culture of them .In these countries, the dairy companies often search for clean raw material and focus on making a healthy life. Meanwhile, in Viet Nam there are a small number of children who can approach to fresh milk, people still using not pure and good quality of food Therefore, this is the motivation for TH true Milk to invest and develop a closed line to produce fine-quality food especially milk. In 14/05/2010, TH true Milk manufactory was opened; from the first cow in February 2010, TH was expanded to many stores in Ha Noi and Ho Chi Minh City. From this manufacture many quality products such as UHT milk with natural spices. TH launched the UHT milk products micronutrient supplements for children, additional adult nutrition, eating the yogurt, yogurt drinks, yogurt yeast life continues upcoming production of pasteurized milk, cream, cheese, butter ... the advantage of these products are the fresh dairy farm TH pure quality assurance, not from imported milk powder. The inauguration marked the process factory closed production of a new Lines of milk in NghiaDan, Nghe An, TH Group. Not only is clean milk VN consumers will Be served by a variety of cleaning products of TH True Milk brands such as fresh vegetables, milk for children growth, milk for cardiovascular, diabetes, milk fresh collagen beauty for women, cheese, cheese, cream, skim milk, ... Currently, TH True milk has 100 specialty retail stores across the country, the line is expected to reach 1,000 by 2015 -2 016.

Figure 1: TH true Milk

Many children around Viet Nam had opportunity to get fresh milk; charity event is another field which TH pays attention to increase the quality of life for children. On the other hands, company gets a lot of support from Bac A bank and government

II. Body 1. Define the strategy contents and terminology and explain the

significance of stakeholder analysis to the corporation.- Strategy contents and terminology:

A. Vision:

Figure 2: Vision statement

Vision statements are clear view for all the members in a company and an organization. It will help the company to see what should be done in the future, recognize where company must spent time for and get the right profit: There are 3 visions in the case of TH true Milk: Focus on putting the interests of corporations in the interests of National Development mode and build a sustainable health care quality with the products

manufactured by the company Rationalize their benefits corporations rather maximizes profits

B. Mission: Susan Ward said: “A mission statement is a sort summarize of a company's fundamental purpose. It show the answers of question,” Why do we exist?" Generally, mission statement such as an announcement of company; it will show what exactly company do, essence or purpose of an organization. With TH they create a strong mission by using foreign investment projects focused on high-technology applications for agricultural to keep and develop stably Nation. Then create a good competitive environment with rivals, increase the creative in operation of employees; improve management quality. Moreover, they are trying their best to become the leading in trademark attached to traditional culture, professional; friendly and well equipped working environment, change the policy of reward to keep the loyalty in employees

Figure 3: Mission statement

C. Objective: Furthermore, objective is indispensable to make a successful strategy. Every business, objective statement’s report will show exactly about the process of company’s business situation, makes company go the right way. In the TH Company, there are some objectives such as:

Maximum concentration of responsibility, enhance creativity in the process of working

Together, building a strong global company ,become the mode about dairy farming in Vietnam

Fulfill the expectation of customers

Figure 3: Objective statement

D. Goal: On the other hand, Goal is very important, it describe the specific ideas to get the achievement in future. Goal relate to many aspect of vision and mission. For TH true milk, it will become the best supplier milk supplier in Vietnam, fulfill 50% of the needs clean fresh milk market. Furthermore, the ambition of the business beyond the reach revenues over $ 1 billion (23.000 billion) in 2017, after reaching 4.000 billion in 2013 and 15,000 billion in 2015. (Zingnew, 2012)

E. Core Competence:

Figure 4: Core Competence

According to Businessdictionay, a special ability which a company acquires from its founders or develops and it can’t be easily imitated with other competitors. Core competencies can give a company variety competitive advantages, so customers will get a lot of benefit from it chosen field. In case of TH true milk, this company has a private period which gives cows best take care. At the two main cluster camp: second camp and sixth camp, tens thousands of dairy cows are attached with automatic chip is for daily health monitoring. Furthermore, cows have bath and listen classical music every day to produce the best quality of milk. On the other hands, its technology is very model and new. All of advantages above shows that TH wants to confirm that their milk is very special and make customer had no doubt while using their products; TH had enough ability to make rivals fear and lose market share

F. Competitive Advantage: Competitive advantage results from matching core competencies to the opportunities. A specific will be gained by an organization when it can provide the same value as its competitors with a cheaper price, or higher prices by providing greater value through differentiation.

- The significance of stakeholder : Stakeholder is very important in every company or profit, non profit organization. They have strong influence with decision making of manager; therefore the success of company and business strategy depends on them a lot. Basically, there are 3 types: Internal, External and Connected In TH, The Internal stakeholders are employees and managers. The External stakeholders are the government and communities. Then connected stakeholders are shareholders, suppliers, customers and parties which invest or have dealings with the firm. All of them will have right to give idea changing and gain the benefit from theseTherefore stakeholder can apply a map to control everyone who involved, realize people who can get the most support through the change. Then, TH will chose a place

of stuff where take lot of impact to make a priority. Finally, developing stakeholder plans to prove the successful of every business plan

Figure 5: Stakeholder Map

Key players :the main interest and power, TH true milk should build a strong relationship with them, always satisfy their needs

Meet their needs: keep satisfied which stakeholders have the high power but low interest, TH should try to satisfy them. However, the company doesn’t have to do every thing they want because it may make them feel bored.

Least important: they have low power and low interest; the company should take care about them. Use the same strategy like “meet their need” group, don’t make them so excessive

Show consideration: They usually have low power and high interest, the company must give enough clear information for them to make there is no generate problem. A good detailed plan will make them show their potential cause of the people in this group is really useful for the company's projects

Then not only the perspectives but also the expectations of TH Company among these

stakeholders will be discussed in details:

Internal:

, The internal stakeholders of TH Company are all staff such as the managers and employees working in the company, engaging in Company’s business transactions. The quality of the managers and employees of the company will define the successful of level and the development process of the firm. They take part in all process from purchase material and facilities, collect milk, serving the customers and so on. The role of managers and employees are very important, they not only provide products but also give direct decision and encourage each other to increase quality

Employees: They have many influences in all aspect and take responsible for each product, so they must be train and develop skill very often. This is the basic foundation for company, they have right to work in friendly environment, bonus and reward will be change to motivate them. Then, changing the details of job to make them interest while operating and create a community in each staff. Manager: They can take risky and take all responsible. A manager is the person will decide when company will get profit or bankrupt. So they are very careful in making decision and choosing employees for company. With TH Mrs. Thai Huong is the Chief and 3 more members in board directors. They take the main role and build up plans for staff to attract and keep their loyalty. They also have to satisfy the stakeholders and shareholder by get as much as profit possible. Therefore, they will have a strong belief and keep investing in TH true milk

External: This group usually relate to criticism of government and social community. It outside company so it’s purpose may not suitable with TH staff. Therefore, the effective of business Law always tends to protect the customers’ interests and forces the company to follow the rules, tax payment .Besides, the interest rate (monetary policy) will affect the economy thus affect the business indirectly. TH should use media as a tool to advertise their product as well as realize the strategy of rivals

Connected: They are usually banks, shareholders and supplier, their relationship with company base on contracts between them and TH. They care about the profit of company because they are people who invested their money on TH’s business. Shareholders can have important role in controlling and manage aspect of company as well as governance. Banks will estimate the quality of TH in doing business, the ratio and determine effectiveness of the company’s business and investment. In fact that, TH must create a good relationship with customers because it not only the prerequisite but also the number of them. To do that , TH true milk try to increase the flavor and listen to the needs of clients to make a higher quality products

2. Carry out an organizational audit and make an external environmental audit for TH true Milk Company

Making a good strategy should base on analyze internal: strong and weak point, of company, external will show the opportunity and threaten o analyze the external environment; I will use the PESTEL, value chain models.

- Internal: Core competence:

TH have well equipped with spacious factories, advanced production technology, . skilled workers modern machineries, updated knowledge managers and experts from Isarel where has the best coaching for milk. THcurrently have 30,000 dairy cows were imported from the source are thoroughly tested on the origin and quality of the milk as New Zealand, Australia,Canada. Include 14,000 cows give milk, remaining heifer’s and calves. Because of the well know brand, TH easily to attract the awareness of customers. From this, creates the motivation for the company to develop and expand

Value Chain:

Figure 6: Value Chain

This is a perfect tool for managers to realize the firm from value chain of organization and make the stable competitive advantage for each company. Company will be dividing to two parts such as primary: the people that are related with production and support: who made the background for effective and efficiency

Primary active:a. Inbound Logistics: It is the activities of receiving, storing disseminating

incoming good and material for use. Raw materials are the first important things because without it company can’t do any thing. Therefore, TH created a good relationship with suppliers and they always receive best material. So suppliers are trustworthy

b. Outbound Logistics: are the requirement steps to make products for the customers. It includes warehousing, order fulfillments, etc. TH true milk needs to check all the products to find any mistake, if there are no mistake staff can deliver it. Besides, the employees have to pack, label, delivery and so on. Until now, the TH didn’t make any mistakes. Moreover, the corporation always improve the quality of warehouse, check carefully the date of milk product

c.Operation: It is the process of create and transform into finish product. In this process human resources are the main, luckily TH always have the , professional staff, training and develop every day. Therefore, TH operate very well without doubt

d. Marketing and Sales: In this process company must announce to customers and create strategy to attract them. 4P formula will show clearly about TH operation:

Place: Milk and product from milk are distributed by 2 ways. The first way is delivery to wholesaler and retailer who in trademark. The second way is move to the third country or using agencies in Vietnam.

Price: Because the processes of making milk are quite complex and lost many steps so the price of TH may be higher than the others. Therefore company must set a plan to control the price in order to competive

Promotion: TH should create a friendly look for customers by design beautiful logo with funny slogan because youth are the main target in using milk

Product: TH true Milk often try to improve and change the quality of their product to satisfy the needs of customers every day.

Company has to innovate the machinery to make new and better products of. In 2 year 2011 and 2012, the number of milk is about 20 million gallon and many products from milk such as butter, cheese yogurts…

e.After sale and service:It is the final step including install and upgrade or repairs the product

Primary activity:a. Procurement: includes the way to purchase materials, equipment and other

resourcesb. Technology development: Improve and design the product to meet the trend

and customers’ needsc. Human resource management: There are training, recruiting and encouraging

staffd. . Management planning: Set up Plan, finance and increase quality control

- External: Macro Environment:Every business strategy is always affected by a lot of factors. Moreover, the P.E.S.T.E.L factors have the main role on business behaviors and provide the differences among the aspects of macro environment:

Figure 7: PESTEL

Political Factor: It includes law bylaws, procedures and regulations manufacturing

techniques to create a corridor for business activities. For example such as company

have to pay tax every monthly to show obey and respect with Government.

Furthermore law can affect to income and outcome of company. Honestly to be said

a factor that is most important to the development of business is laws and rule, they

has the specific impact on the results and business activities of TH. It can force TH

true Milk to improve its products’ quality and help them to be more competitive.

Economical Factor: it effect directly on growth rate, interest rate, exchange rate

and inflation rate and the business activities. Economy of VN is crisis many people

are loosing their jobs, company bankrupt and consumption of product are decrease

dramatically. On the other hands cost like electricity, water, fuel increase day by day.

Although TH got effects from this crisis but company has change fluently to adapt

with economy

Social factor: Education, Unemployment, life style and culture are some

aspects of social. If unemployment are high the rate of employees will be low

, so TH should consider to make there are no harmful with their performance

from employees. On the other hand, TH focus on improve skill of employees,

too. Causes of Vietnamese’s skill are very bad and it effect directly to their

income. Beside this , culture and habit have the main effect to consumption,

it easily to recognize that citizen have tend to use milk more than people in

country

Technology factors: Nowadays, people have opportunity to approach with

modern technology like internet . By design beautiful website, TH will easily

to attract not only domestic clients but also foreign customers

Environment factor: In period from 2000 to 2010, economy of Viet Nam has

change a lot but the quality of environment are decreased. Government have

to make straight rule for protecting environment, every company must obey

and control the input and output. For TH, this company follow a “green”

cycle , all the garbage will be destructed carefully after release to

environment

Legal factor: It contains discrimination law, consumer law, antitrust law,

employment law, health and safety law which protect the advantage of

customers. TH Company should pay attention to these law to improve rule

Macro Environment:

There are some factor such as:- The threat of new entrant.- The bargaining power of customer (or buyer power- The bargaining power of suppliers (or supplier power- The threat from substitute products.- The rivalry amongst current competitors in the industry

The threat of new entrant:When apply this factor, I will consider about rivals. In fact that before TH company open, there are a huge number of loyalty customers from others milk rivals from another outside company in VN’s market. However, rule as barrier to enter VN’s market, they will be:

The different of production: TH has create a special picture which no company can do this Its partners feel satisfied with the products, from the quality, design to the price. Customers will not find any reasons to use product come from other brands. Any newbie compny must be design a new flavor to attract custormer

IInvestment requirements :A new entrants will need a large investment in order to make a faire competitive with another rivals

Switching cost: With custormer who wat to change in using product to TH true milk they will care abou money, time and convenient. TH may base on those criteria to build stores to get attention

Access to distribution channels: New company must be prove their product, competitive advantage will be useful for them in this step

Power of custormer: There many competitors in domestic like Vinamilk, Moc Chau .. and from foreign like Holland Lady… For this reason, the customers in both domestic market and foreign market could switch to use products from others company, so the bargaining power of customers increase. Therefore, TH try to improve a lot in quality, diversify products and serve customer well. They will be the advantages for TH to get loyal customers Power of supplier: TH can buy cheaper material as well as decrease price, but it must be suitable between material cost and the quality to be effectively meet the income of customers.. On the other hands they should make a good relationship with suppliers Threat from subtitles:There are no subtitle for milk product because in all situations people still have to use milk Itensity of competence:This is unavoidable problems, TH have to face with all rivals from out and inside VN. Firstly is economy crisis, although people have to use milk but if the price of competitors reduces they will choose them not TH. Secondly, Rivals who have large experience will make difficult with TH true Milk,because when tH enter the Europe market they must face with form and quality barrier. Therefore, TH has increase technology and invite expert from other countries to help them

- SWOT analysis

Figure 7:SWOT analysis

There are detail about SWOT of TH

Strength (S)

1. Well – known brand name in the

milk industry of Vietnam

although tH is new.

2. Experimental management teams.

3. Good – quality products.

4. Reasonable price.

5. Skilled labors.

6. Good Mission and Vision, clear

objectives.

Weaknesses (W)

1. Poor promotion channels to other

custormer from another

countries.

2. Depends on export market.

3. Still has to import machinery

from another countries and hire

experts

Opportunities (O)

1. Install modern technology and

advanced equipment.

2. Expand markets to another

countries

3. The needs for milk is increasing

Threats (T)

1. Large numbers of competitor,

both domestic and international.

2. High requirements for the quality

based on the international laws.

3. Global economic crisis.

S1, S3, S4 with O2, O3: With these strengths, TH Company can serve well in domestic and expand business to foreign countries. Since the context of international economic crisis, foreign people tend to expense less than before and then, TH know this and has a suitable price to make them convenient.

S2,S5 with T1: By using skill staff, TH will find no doubt in facing with another competitor

W1 and W2: TH should develop more in technology in order to increase the quality of advertisement

W1, W2 with T1, T3: Poor in promotion channels may decrease the interest

of customers from outside VN, especially nowadays advertising your own

picture is very important. As a result, the customers will tend to use their

inside countries companies’ products, which are better advertised and more

suitable. Moreover, domestic is not a good field because there are too much

competitors.

III. Conclusion TH true Milk is a strong company with good core competence and vision, mission. It helps them to achieve many profits inside Viet Nam. However, they should focus on foreign market than domestic because there are too much rivals in VN

IV. Referencehttp://www.thmilk.vn/vi/book

http://sbinfocanada.about.com/od/businessplanning/g/missionstatemen.htm

http://news.zing.vn/Tham-vong-cua-nguoi-dan-ba-thep-TH-True-Milk-post335238.html

http://www.businessdictionary.com/definition/core-competencies.html