Introduction:
When we want to take a business plan put into operation, we need to have a plan about business
strategy. Business strategy plays a very important role in determining the success of the project.
It will increase the chances of success, help reduce unnecessary risks when performing the
project. In my assignment, I will show a report about knowledge of strategic planning includes
example for each task by solving 3 tasks:
-Assess how business missions, visions, objectives, goals and core competencies inform strategic
planning.
-Analysis the factors that have to be considered when formulating strategic plans.
-Evaluate the effectiveness of techniques used when developing strategic business plans
And this assignment, I will give example about Traphaco company, to clear the above task.
Traphaco is a vertically-integrated pharmaceutical company specializing in the development,
marketing and distribution of Vietnamese traditional medicines. The company is the clear leader
in the Vietnamese traditional medicine sector and the second largest pharmaceutical
manufacturer in Vietnam in terms of revenue and net profit. The company owns a strong brand, 2
GMP-WHO manufacturing factories and a nationwide distribution network, with 22 distribution
branches. (Mekongcapital)
II.Analysis:
LO1 Understand the process of strategic planning
1.1 Assess how business missions, visions, objectives, goals and core
competencies inform strategic planning:
a, Compare and discuss the differences among mission, vision, objective, goal and core
competence.
Missions
Visions
Definition
Statement of business.
States the business reason for the
organization's existence. Does not
state an outcome. Contains no time
limit or measurement. Provides basis
for decisions on resource allocation
and appropriate objectives. Defines
current and future business in terms
of product, score, customer, reason,
and market price. (cocreatr)
Dream or a picture to be achieved
Traphaco
Missions of Traphaco:
- Dedication to society products - services
epochal and rich traditional values in order to
improve the quality of life.
- Always satisfy customer needs, to create
meaningful work and advancement
opportunities for employees.
- Increase the value to investors.
ultimately.Created by consensus.
Forms mental image of future to
which people can align. Describes
something possible, not necessarily
predictable. Provides direction and
focus. Pulls people, who hold it,
towards it. (cocreatr)
Goals
Results to be achieved.
Describes ideal states to be achieved
at some unidentified future time.
Defined consistent with and related
directly to vision and mission. Guide
everyday decisions and actions. Do
not necessarily deal with measurable
results. (cocreatr)
Goals of Traphaco:
Investment in development of enterprise
resources: human, material and financial
resources. Take advantage of the
opportunities, advantages, limitations and
difficulties, maintain and expand the
domestic market for traditional products and
new products. Enhanced promotion,
branding, brand retention leading
pharmaceutical Vietnam.
Objectives
Core
competencie
s
through the process of planning and management. Factors in the internal environment, such as:
Human resource, organisational culture, organisation structure, management, assets, financial
strength. (leoisaac)
- Externalenvironment,can not be controlled. The manager of a business does not control
business competitors, or changes in the law, or general economic conditions. However, the
manager of a business or organization has a number of measures to control businesses react to
changes in its external environment. Factors in the external environment, such as: Economic
conditions, market (competition), technology, climate change, legal, media, political,
demographic. (leoisaac)
Comment
Example
Step 1
Mission/ vision
Is answer for
question: why
does the
organization
exist?
Mission of
statement
Step 2
Goals
Interpret the
mission to
different
stakeholder
Step 3
Objectives
Quantified
embodiments of
mission.
Mission of Traphaco: to
the year 2020 become a
strong economic
corporation involved in
trading and providing
health care products and
services and owned the
capacity
Traphaco is one company
bring brand of tradition
medicine .Enhanced
promotion, branding,
brand retention leading
pharmaceutical Vietnam.
.Traphaco will develop a
team of international
expertise, built upon a
local core culture,
advanced in the world
market
Step 4
Environment
analysis
Opportunities
and threats
planning.
In this step we can
use PEST analysis,
5 forces analysis of
Porter to evaluate
the opportunities
and threats of
organization,
Opportunity:
- Pharmaceutical industry
has great potential to
grow, the rate of
traditional medicine
consumption is forecast
to continue to grow
further in the coming
years.
- Participation in export
markets. The time rate of
Traphaco export sales
accounted for less than
1%. The company is
actively promoting
exports to ASEAN
countries.
Threats:
- East pharmaceutical
market increasingly
fierce competition.
Typical products of the
company are faced with
counterfeit goods, pirated
goods.
- Price subject to strict
control from the state
agency, price growth has
not kept pace input costs.
Step 5
Position audit
or situation
analysis
Identify
strengths and
weakness
-Resources
-Value chain
-Product life cycle
-Boston matrix
-Directional policy
matrix
-Marketing audit
-Market share
Strengths:
- Owning a leading brand
of traditional medicine
with a high level of
awareness.
- Infrastructure, modern
equipment with 2
factories GMP-WHO.
- R & D activity is strong
5
competitive advantage
biggest Traphaco. Annual
revenue from new
products are accounted
for 7% of total revenue.
- Distribution System No.
2 with pharmaceutical
companies listed
throughout the country.
- Use 80% of inputs are
the ingredients in water.
Step 6
Corporate
appraisal
Combine step 4
&5
Therefore we can
analysis the
SWOST analysis to
see advantage and
disadvantage of the
organization
Step 7
Gap analysis
Compare
Gap analysis
Weaknesses:
Raw materials companies
grow only about 30% of
raw materials for
pharmaceutical products
China, on the other hand
most of the raw materials
to produce Tan
pharmaceutical imports.
Traphaco can rely on the
strengths, opportunities ...
to be able to optimize
profits for businesses.
Especially in the context
of the volatile market
today. It can be used to
analyze SWOST,
launched one of the
strategies to help
businesses achieve short
and long term goals.
- The strategy suggested
as SO: streng used to
optimize the
opportunities available;
ST: streng used to limit
the challenges businesses
face.
To achieve the objectives
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outcome of step
6 with step 3
=>So, to achieve the objects, to achieve that objectives, the factors inside and outside will affect
the success of that objectives. But external factors accounting for more factors, when trying to
reach Traphaco than on world market.
10 x
1x
0.1 x
(http://www.managementstudyguide.com/bcg-matrix.htm )
Limitations of BCG Matrix
7
The BCG Matrix produces a framework for allocating resources among different business units
and makes it possible to compare many business units at a glance. But BCG Matrix is not free
from limitations, such as:
- BCG matrix classifies businesses as low and high, but generally businesses can be medium
also. Thus, the true nature of business may not be reflected.
- Market is not clearly defined in this model.
- High market share does not always leads to high profits. There are high costs also involved
with high market share.
- Growth rate and relative market share are not the only indicators of profitability. This model
ignores and overlooks other indicators of profitability.
- At times, dogs may help other businesses in gaining competitive advantage. They can earn even
more than cash cows sometimes.
- This four-celled approach is considered as to be too simplistic.
(managementstudyguide)
=>With Traphaco, Vision to the year 2020 become a strong economic corporation involved in
trading and providing health care products and services and owned the capacity in researching
and developing natural hi-tech products. So, Traphaco take care for their products and services.
=>Traphaco should choose BCG to give business strategy.
-SPACE(Strategic Position and Action Evaluation): focus on position of company to give
strategy.
SPACE can be used in the second stage of the strategic planning process. This matrix corporate
strategic choices attacks cautious / conservative defense or competition. The axis of the SPACE
matrix represent 2 internal factors the organization and two external factors.
(http://www.mba-tutorials.com/wp-content/uploads/2010/12/image1.png )
Disadvantage :It hard for companies control external factors of environment like the changing of
policy of government or competitor is a lot in large market share.
-Directional policy matrices: more focus on product too like Boston Matrix but more detail and
clearly.
(http://www.brs-inc.com/models/model18.asp )
With this matrix measures the health of the market and your strength to pursue it. The results
indicate the direction for future investment. It has advantages, such as:
- Help business build a business structure and optimal balance .
- Figure out how to use financial resources in order to maximize the business structure of a
business .
On other hand, it also has disadvantages:
assess the development potential based on market share and growth of the business sector is
incomplete .
-PIMS (Profit impact of market share) this indicates a positive relationship between market
share and profitability.
PIMS seeks to address three basic questions:
- What is the typical profit rate for each type of business?
- Given current strategies in a company, what are the future operating results likely to be?
- What strategies are likely to help improve future operating results?
=>With Traphaco, problems about customer also need taken care.
We should choose this, because it as appropriate with the objectives.
Conclusion, with the objectives mentioned in task 1.1 , 1.2 , should we choose BCG , PIMS is
the appropriate method to evaluate the company's strategy
III.
Conclusion:
In conclusion, company have to defied clearly the mission, vision, goal or objective, core
competence, to be able toeasier develop allow the purpose. On the other hand, they helpful for
selected strategic planning model. It is very necessary to find out and understand strategic
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Bibliography
cocreatr. (n.d.). http://cocreatr.typepad.com. Retrieved from
http://cocreatr.typepad.com/everyone_is_a_beginner_or/2012/04/defining-visionmission-goals-and-objectives.html
leoisaac. (n.d.). leoisaac.com. Retrieved 2015, from
http://www.leoisaac.com/planning/strat016.htm
managementstudyguide. (n.d.). http://www.managementstudyguide.com. Retrieved
from http://www.managementstudyguide.com/bcg-matrix.htm
Mekongcapital. (n.d.). Mekongcapital. Retrieved 2015, from
http://www.mekongcapital.com/en/content/traphaco
Traphaco. (n.d.). Traphaco. Retrieved from
http://www.traphaco.com.vn/en/introduction/overview
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