Business strategy for Greenwood corporationfrom 2012 to 2017

TRÖÔØNG ÑAÏI HOÏC MÔÛ TP. HCM UNIVERSITEÙ LIBRE DE BRUXELLES

HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

MBAVB3

TRINH HUU KIEN

BUSINESS STRATEGY FOR GREENWOOD

CORPORATION FROM 2012 TO 2017

MASTER PROJECT

MASTER IN BUSINESS ADMINISTRATION

(PART-TIME)

Tutor’s Name: Dr. Nguyen Van Ngai

Student’s Name: Trinh Huu Kien

Ho Chi Minh City

(2012)

i

WARNINGS

“The Joint Master Program between Ho Chi Minh City Open University and Solvay

Brussels School is not responsible for any arguments, data, or statements contained

in this thesis. These are only binding upon the author”

ii

ACKNOWLEDGMENT

I would like to express my deep gratitude to many people that have given me

support, assistance and guidance to complete this project. The undertaking of this

project may not be possible without the following people.

First and foremost, I would like to thank my advisor on this thesis, Dr. Nguyen Van

Ngai for his valuable guidance and useful advices for the project.

I am thankful to the top managers and the staff of all the functional departments of

Greenwood Corporation for their support during the time of data collection for this

study.

Thanks are also due to The Joint Master Program between Ho Chi Minh City Open

University and Solvay Brussels School for providing me opportunity to pursue

master degree in this MBA course.

Finally, on a more personal note, I would like to thank my wife and my parents for

their deep love and persistent support.

iii

ABSTRACT

Greenwood Corporation is operating in Medium Density Fiberboard (MDF) Industry

which has been developing rapidly in recent years due to the strong growth of the

wood processing and construction sector. Greenwood is now facing fierce

competition from existing rivalries and many new entrances. So, building a business

strategy is Greenwood’s utmost issue. This research aims to develop a business

strategy for Greenwood in order to compete with many of competitors then to

achieve its missions, vision & goals.

The research starts by reviewing the theories relating to business strategy. Then, a

framework of the research is designed to follow. The study continues with the

analysis of the internal and external environment to find out its opportunities,

threats, strengths and weaknesses.

The external analysis consists of macro environment, industry and customer

analysis.

Macro environment factors are analyzed through PEST analysis theory. Porter’s

Five-force Model is used to carry out industry analysis to indicate the company’s

opportunities and threats. To make the external analysis more realistic, an individual

in-depth interview is firstly conducted to know expert’s ideas about the Five-Forces

affecting firms in MDF industry.

In the internal analysis, the Michael E. Porters’ value chain theory is used to analyze

company’s value activities to identify its strengths and weaknesses that enable its

competitive advantages. This helps to locate company’s present competitive

positions which define Greenwood's strategic capability. To make the research more

realistic, a customer survey is conducted to know customer requirements & needs,

behaviors and expectations and their perception about Greenwood’s product

compared to competitors in the markets. It is used to identify Greenwood and

competitor’s current position in the market. The result of the surveys and

information collected from in-depth interview are consolidated into the SWOT

analysis to place strategic actions for Greenwood.

iv

Finally, the research goes deeply into developing business strategy for Greenwood.

First, Greenwood’s missions, vision & goals are reviewed. SWOT Analysis &

SWOT strategy are used to place strategic actions that fit company’s resource and

capabilities to the demand of the market.

This study focuses on designing a strategic approach for Greenwood Corporation to

compete with rivalries and to develop sustainably in the MDF Industry. And this

business strategy is just the first step to help Greenwood to achieve its missions,

vision & goals. Any recommendations are highly appreciated and useful for

Greenwood to apply the business strategy successfully.

v

PROFESSOR’S COMMENTS

I confirm that student Trinh Huu Kien has fully finished the thesis “BUSINESS

STRATEGY FOR GREENWOOD CORPORATION FROM 2012 TO 2017”.

I certify that I have read this project and that, in my opinion, it is fully adequate in

scope and quality as a thesis for the degree of Master of Strategic Management.

Dr. Nguyen Van Ngai

vi

TABLE OF CONTENT

Title Page

Cover Page .......................................................................................................... i

Warnings ............................................................................................................ ii

Acknowledgement ............................................................................................. iii

Abstract ............................................................................................................. iv

Professor’s comments........................................................................................ .v

Table of Content ................................................................................................ .vi

List of Abbreviations .......................................................................................... ix

List of Figures ................................................................................................... .x

List of Tables .................................................................................................... .xi

CHAPTER 1 ........................................................................................................... 1

INTRODUCTION ................................................................................................... 1

1.1. Rationale of the study ................................................................................. 1

1.2. Problem statement ...................................................................................... 2

1.3. Research Objectives ................................................................................... 2

1.4. Research Methods ...................................................................................... 2

1.4.1 Research Framework ........................................................................... 3

1.4.2 Information Need ................................................................................. 5

1.4.3 Data collection method & research tools .............................................. 5

1.4.4 Sampling.............................................................................................. 6

1.4.5 Data Processing ................................................................................... 6

1.5 Scope and limitations of the study .............................................................. 6

1.6 Structure of the study ................................................................................. 6

CHAPTER 2 ........................................................................................................... 8

LITERATURE REVIEW ........................................................................................ 8

2.1 Strategy & Business strategy ...................................................................... 8

2.1.1 Strategy definition ............................................................................... 8

2.1.2 Corporate strategy ................................................................................ 8

2.1.3 Business strategy ................................................................................. 9

2.1.4 Functional strategy ............................................................................... 9

2.2 Competitive advantage ............................................................................... 9

2.2.1 Definition ............................................................................................ 9

2.2.2 Generic building blocks of competitive advantage ............................. 10

vii

2.3 Strategy formulation process .................................................................... 11

2.3.1 Visions, Missions and goals ............................................................... 12

2.3.2 External analysis ................................................................................ 12

2.3.3 Internal analysis ................................................................................. 16

2.3.4 Strategy formulation and strategic choice........................................... 18

2.3.5 Strategy implementation .................................................................... 20

CHAPTER 3 ......................................................................................................... 22

SITUATION ANALYSIS ..................................................................................... 22

3.1 Company Introduction .............................................................................. 22

3.2 PEST Analysis (External Analysis) .......................................................... 23

3.2.1 Political factor ................................................................................... 23

3.2.2 Economic factors ............................................................................... 24

3.2.3 Social, cultural factors ....................................................................... 26

3.2.4 Technological factors ......................................................................... 27

3.3 Industry analysis (External Analysis) ....................................................... 27

3.3.1 Vietnam Wood Processing Sector Overview ...................................... 27

3.3.2 MDF Industry analysis ....................................................................... 29

3.3.2.1 MDF Industry Overview ................................................................. 29

3.3.2.2 Domestic MDF production ............................................................. 31

3.3.2.3 Imported MDF................................................................................ 34

3.3.2.4 Supply/Demand MDF of Vietnam .................................................. 35

3.3.2.5 Overview of International MDF Market ......................................... 37

3.3.3 Porter's Five-Forces analysis .............................................................. 38

3.4 Customer analysis (External analysis) ...................................................... 44

3.5 Greenwood’s Value Chain Analysis (Internal analysis) ............................ 47

3.5.1 Primary Activities .............................................................................. 47

3.5.2 Support Activities .............................................................................. 50

CHAPTER 4 ......................................................................................................... 52

DEVELOPING BUSINESS STRATEGIES FOR GREENWOOD ........................ 52

4.1 Greenwood's Mission, vision and goals review ......................................... 52

4.2 SWOT analysis ........................................................................................ 52

4.3 SWOT strategies ...................................................................................... 53

4.3.1 SO or BASE strategy ......................................................................... 53

4.3.2 WT or SURVIVAL strategy .............................................................. 53

4.3.3 WO or EXPANSION strategy ............................................................ 54

4.3.4 ST or DEFENSIVE strategy .............................................................. 54

4.4 Greenwood’s Strategy Developing ........................................................... 54

4.4.1 Marketing .......................................................................................... 54