valuating & adjusting strategy for construction installation & industrial material company limited

NATIONAL ECONOMICS UNIVERSITY SOLVAY BUSINESS SCHOOL

FINAL THESIS

Valuating & Adjusting Strategy

For Construction Installation & Industrial

Material Company Limited

Instructor: Associate Prof. Ngo Kim Thanh

Student: Duong Ngoc Khanh– MBM7

Hanoi, March 2010

Valuating & Adjusting Strategy for Cim Co., Ltd

Acknowledgements

I would like to express my deepest gratitude to my research supervisor, Mrs. Ngo Kim

Thanh, for her intensive support, valuable suggestions, guidance and encouragement

during the course of my study.

I would like to express my sincere gratitude to all of my teachers at Solvay Business

School and National Economics University for their teaching and guidance during my

course.

I would like to extend my thanks to the CEO of Cim Co., Ltd who trusted me and shared

his information and ideas about the company operating.

I am very thankful to all individuals for providing me with the necessary information and

supporting me with advice during the period of my data collection for this research

study.

Last but not least, I would like to express my loving thanks to my parents, my wife and

son for their love and encouragement throughout my studying.

Table of content

Acknowledgements...............................................................................................2

Written by Duong Ngoc Khanh MBM7 2

Valuating & Adjusting Strategy for Cim Co., Ltd

Table of content....................................................................................................2

Executive Summary..............................................................................................4

Table 1: Corporate strategy formulation process............................................11

Table 3: SWOT/ TOWS matrix.........................................................................17

III.3. Opportunities and Threats.......................................................................27

Table 4: Strengths and Weaknesses of CIM CO., LTD...................................34

Table 6: SWOT/TOWS matrix of MSA VN.....................................................38

To choose Strategy applied for Cim, the author use pointing method with criteria

above. The scale point is 03 in which: 3 - Sure; 2 - Maybe; 1 - Not................39

Chapter 6: Conclusion, limitation and further researches..............................45

Appendix: Finance Report years 2002 - 2008

Business Result year 2002 -2008

List of Figure

Figures 1: Revenue of Cim co., Ltd from 2002 to 2009……………………… ...08

Figurers 2: Tariff on foil & rebar from 2001 to 2009…………………………....19

Figures 3: Imported quantity 2009……...………………………………………..23

Figures 4: Top 20 hot plate importers in 2008………………………..………….24

Figures 5: Price of Steel in 2007 (Source: Vietnam GSO)..……………………..25

Figures 6 : Revenue structure of Cim Co., Ltd……..……………………………29

Figures 7: Leverage & liquidity ratios of Cim Co., Ltd……………….…………30

Figures 8: Revenue & liabilities growth of Cim…………………………………34

Figures 9: ROE of Cim from 2002 to 2008…………….………………………..35

List of table:

Table 1: Corporate strategy formulation process…..…………………………….11

Table 2: SWOT model……………………………. …….………………………16

Table 3: Opportunities and Threats……………………………………………....17

Table 4: Strengths and Weaknesses of Cim., Ltd………………………………..34

Table 5: Threats and Weakness……… …………………………………………35

Table 6: SWOT/TOWS matrix of Cim, Ltd……………………………………. 37

Table 7: Choosing Strategy……………………………………………….……..38

Table 8: BCG Matrix……..……………………………………………….……..39

Written by Duong Ngoc Khanh MBM7 3

Valuating & Adjusting Strategy for Cim Co., Ltd

Executive Summary

Steel industry takes a very important part for any economy, especially for Vietnam - a

developing country where begin to build its new cities, infrastructure, shipping, heavy

industries… According to statistics of Vietnam Steel Association, Vietnam nowadays

has discovered & located over 216 iron ore mines in which 13 mines with the capacity

over 2 million tons distribute conceptually in the North. However, investments focus on

easier & more quickly making money field. Lacking of planning from Government from

the beginning, social resources has dropped foil & iron ore processing industries. In

many years from 2000 to 2007, domestic foil producers just supply only around 20% of

demand. This rate rose up to 50% in year 2008 with new factories but they themselves

facing the same problems of finished-good factories: lacking of input materia. This

problem shall be solved by developing iron ore exploiting & processing industry.

Because of lacking input material, the only solution of Vietnam steel industry is expected

to outside supply - exporting countries such as India, Russia, Korea, Japan, Australia,

South Africa and China, the biggest producer and consumer in the world. Input material

depending on foreigner resources, the market strongly affected by outside factors not

only international supply-demand but also policies of exporter countries.

Beside outside factors, Vietnamese market itself affected by internal conflicts between

infant policy & monopoly situation.

With an unstable environment like above, Construction Installation & Industrial Material

Company Limited (Cim Co., Ltd) was born in 2002 with only one business line, it was

importing to distribute in domestic market. Its clients are domestic trading companies,

Written by Duong Ngoc Khanh MBM7 4