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  • 1. Capstone project reportGLOBAL ADAVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT FORMULATION BUSINESS STRATEGY OF EVIALIS VIETNAM IN PERIOD OF 2013-2020 Class: GaMBA01.C0111 Group number: 11 Group members: - Tran Thanh Son - Phan Van Thong - Le Thi Anh Tuyet - Nguyen Truong Tung HCM - 2012 Page 1
  • 2. Capstone project reportFOREWORDS1. Necessary of projectVietnam is a country with long-standing agriculture, and today 70% of the population isstill agricultural laborers. In the context of science and technology rapid development ingeneral, and the application of science and technology in the agricultural sector is alsoincreasingly popular; to develop agriculture in the country, Vietnam has called for foreigninvestment to introduce advanced technology and produce high quality products.Particularly in the field of production of animal feed, according to the statistics ofLivestock department the number of FDI firms raising now accounts for about 25% of allbusinesses operating in Vietnam; however production and supply products on the marketof FDI enterprises accounted for more than 60% market share. Besides, joining the WorldTrade Organization WTO of Vietnam has been and will continue to receive more foreignenterprises; therefore the level of competition will be more intense in most of the fields ,including animal feed production.One of FDI enterprises operating in the feed industry in Vietnam market is EvialisVietnam, presented in Vietnam since 1995 and gradually asserted its position in themarket. However, in the face of increasingly strong competition of many largecorporations from many different countries around the world would somehow affect thebusiness operations of the company in the near future; to find solutions for sustainabledevelopment for Evialis Vietnam the group of authors propose "business strategy for theEvialis Vietnam in period of 2013-2020 ", and we believe that this project will contributefor future success of the Evialis Vietnam.2. Rearch objectiveOn the basis of the analysis within the enterprise environment and the impact factors ofthe external environment to find out the strengths and weaknesses as well as opportunitiesand threats; thereby determining the appropriate strategy in order to create competitiveadvantage for the future and ensure the sustainable development of enterprises.3. Objective and scop of research- Research objective: Evialis Vietnam corporation, and some of its competititors in animal feed industry in Vietnam market.- Scop of research: Animal feed in general, and mainly forcus in feed for pig.4. Research methodThe authors apply the research methods, including: integrated approach, system approach,methods of analysis and logic, ... to analyze and determine the relationships betweenproblems, consider the movement and changes over space and time; since then, find outwhat the impact reasonable method to maximize the opportunities and strengths, minimizethreats and weaknesses on the basis of propose optimal solutions in the process of buildingthe companys business strategy. Page 2
  • 3. Capstone project report5. Content structureMain content structure of project:- Chapter 1: Theorical basis of business strategy.- Chapter 2: Analysis business operation of Evialis Vietnam and economic environments.- Chapter 3: Formulating business strategy for Evialis Việtnam in period of 2013-2020.CHAPTER 1: THEORICAL BASIS OF BUSINESS STRATEGY1.1. The concept of business strategy and the role of business strategy1.1.1. The concept of strategy and business strategyThe concept of strategyThe term comes from the word strategy Strategos in Greek means "commander" is used inthe military, refers to the science and art of military command. Today, the term strategy isused extensively in business and in life. "Strategy is the art of building a solid competitive advantage to the defense," said MichaelPorter. According to Johnson G. and Scholes K. (1999), "Strategy is the direction and scope of anorganization in the long term, in order to gain competitive advantage for the organizationthrough the format of its resources in a changing environment, to meet market demand andsatisfy the expectations of our stakeholders. "Business strategyAccording to Alfred Chandler (Harvard University). "Strategy involves the determinationof basic long-term goals of the business, at the same time choose the way or course ofaction and the allocation of resources to accomplish that goal."By Fred R. David th. "Business strategy is the means to achieve long-term goals."In general, the definition of business strategy although there are differences in wording butcontained 03 following contents:- The target business that wants to reach.- Propose and select the solution support to achieve the goal.- Deploy and allocation of resources to accomplish that goal.Strategy is a set of goals and policies as well as the main plan to achieve these objectives,it is clear the company is or will carry out business activities, and active in any field.Business strategy of a business is an overall program of action towards the realization ofthe goals of the business. Not to devise a strategy specifically how to achieve these goalsbecause it is a task of immense assistance programs, the strategy functions.Strategy is to create a framework to guide thinking and actions.1.1.2. The role of business strategyBusiness strategy plays an important role for all businesses, specifically: Page 3
  • 4. Capstone project report- Business strategy plays a decisive role for the existence and development of a business during the business, particularly in the global business stage for fierce competition. Business strategy is to help clearly see the business opportunity and risk in the present and in the future since then, based on the potential of the business to deal with the uncertainty of the market situation.- Strategy is the way to avoid the error when stepping into the future, to help businesses achieve their goals correctly and with better results thanks to the right target.- Business strategy based on the analysis of the business environment factors, which help businesses understand and evaluate the correctness and accuracy than existing competitors as well as potential competitors hidden in the future of the business, know the elements of the natural conditions, social, political influence how current and future business. Besides, the business strategy also helps businesses effectively used its existing resources and allocate them appropriately.From these roles can show that the business strategy to help businesses determine theobjectives and tasks of the business enterprise and thus maximize your resources andcapture the market opportunity as well as receive know the risks in order to createsustainable competitive advantage increasingly for business.1.1.3. Requirements for construction and implementation of business strategyFirst, the business strategy is to achieve the purpose of increasing the power of businessand gain competitive advantage.Second, the business strategy is to ensure the safety of the business enterprise.Third, the business strategy must determine the scope, objectives and basic conditions toachieve the objective. The determination of the scope of business in the business strategyis to ensure that fixes the spread of resources, or avoid the use of not all resources.Fourth, to predict the future of business environment, predicting how much accurate,more consistent business strategy much.Fifth, to have a backup strategy; the reason to do so, is to execute business strategy in thefuture, but the future is always unknown. So, when building business strategies, must takeinto account the worst possibility that businesses may encounter. And in that situation, thestrategy will be replaced.Sixth, to combine maturity with opportunities; business strategy is not ripe then surelybusinesses will fail. But there is seemingly paradoxically, a number of business strategiesfail because too ripe. The reason is easy to understand that due to perfective thought inbuilding strategy, it takes too much time in processing information, expect to get a perfectstrategy. That leads to the completion of construction and deployment strategy, the lostopportunities. So when the business strategy to distinguish between what is ideal strategyand what is the perfective strategy.1.2. The process of business strategy formulationStrategic Planning is the first stage, is crucial in the process of strategic management. Thisphase is formed to establish strategic business tasks, investigations to determine theopportunities and threats from the external environment and the strong and weak pointsnow, which set out the long term and choose between alternative strategies. The difference Page 4
  • 5. Capstone project reportbetween strategic planning and strategic management is strategic management includingthe implementation and evaluation strategies.The strategic planning is done by a closed process, this step of the process is always aclose relationship and complement each other. There have been many studies to determinethe strategic planning process, in the context of this thesis, the author uses the strategyformulation process based on the model of Fred R.David, including the following:1.2.1. Step 01: Analyze external environmentsSystem point of view, the existence of the business is in a certain environment, thisenvironment is always changing with the conditions of social tourism and business. Sowhat is environment of a business? These are the factors, forces, institutions locatedoutside of the business always have impact on the survival and development ofenterprises.Organizations environment can be divided into two levels: the macro environment (alsoknown as the general environment) and micro environment (or a particular environment).Macro environment affects all sectors of business, but not necessarily in a certain ways.Micro-environment is defined for a specific industry, with all businesses in the sectoraffected by the micro-environment in the industry. And when analyzing the influence ofthe environment, we need to identify two factors: one is the complexity of theenvironment is characterized by a variety of factors that affect the organizations efforts.Increasingly complex environment, the more difficult it is to make effective decisions.Second, the dynamics of the environment, including variations related to environmentalconditions. Macrco environment analysisMacro environment is composed of the following main factors: economics, politics, lawand government, culture, society, nature, science, and technology. The content of theseelements can point as follows:- The economic factors: Through impact factors: economic growth, interest rates, the stage of the economic cycle, fiscal and monetary policies, exchange rates, inflation levels, foreign investment, etc... have great influence on the business of the enterprise.- Legal-political factors: Political and legal factors have a more significant impact on business operations, including: a system of government policy perspective, the current legal system, the trend of diplomatizing of government, the political developments in the country, the region and the world. Businesses must comply with the provisions of the tax law, lending, labor safety, insurance policies, pricing, advertising, where is the location of plant and environmental protection- The social-cultural factors: The social-cultural environment including norms and values are accepted and respected by a society or a particular culture. The impact of the socio-cultural factors are often more subtle and long-term compared to other factors, sometimes difficult to identify. However, the socio-cultural environment has strong influence on the business activities, represented by the following factors: the concept of aesthetics, ethics, lifestyle, occupation; customs, customs and traditions; social care priorities; awareness, education of society, ... Page 5
  • 6. Capstone project report- The natural element: Natural factors including: geographic location, climate, landscape, land, river and sea, the mineral resources in the ground, sea forest resources, the purity of the water environment, air ... their impact on policy decisions in business has long been recognized business. In many cases, the natural conditions are a very important factor to form the competitive advantage of products and services. The problem of environmental pollution, poor product quality, waste of resources, along with the growing demand for limited resources forcing businesses to change their decisions and measures related activities.- Elements of science and technology: Characterized by the development of scientific and technical progress, the advent of new technologies can create new products with superior features, shorten the product life. This is a very active element, filled with opportunities and threats to the business.This is because the elements of the general environment, macroeconomic factors typicallyaffect all types of businesses, including factors directly impact on this business, but littleimpact on business other. Therefore, this is the first general factor that business needsanalysis to identify the factors that will directly impact the business, through which toidentify opportunities and risks affecting the operations of their business. Micro environment analysisMicro environment consists of the factors in the industry and are the external factors forenterprises, determine the nature and extent of competition in the business industry.According to Michael Porter, the micro environment of the enterprise is made up of fivebasic elements: competitors, buyers, suppliers, potential new competitors and substitutes.Figure xxx: Micro-environment analysis Page 6
  • 7. Capstone project reportThe competitorsThis pressure is often a direct threat to the business, as the pressure of competitionbetween businesses on the rise, the more threatening position and the existence of theenterprise.The customerCustomers are the most important part of the business, customer loyalty is a majoradvantage of the business. The trust of customers for business can be the most valuableasset for businesses. Credibility is achieved by enterprises that meet customer needs andtastes better than other businesses.The suppliersThe company must always be associated with the business offers (suppliers) to providedifferent resources such as raw materials, equipment, labor, capital, etc. The provider maycause a pressure in the operation of a business. So the research to understand who providesresources for businesses is not to be missed in the process of environmental research.Suppliers of materials, equipment with advantage could profit by increasing prices,reducing product quality or reduce the level of service associated with it, so analysisprovider is necessary. The provision of financial is a factor to ensure short-term and long-term loans in each period of the business.The new potential competitorsFor new players to participate in the business may be factors that reduce the profitabilityof their business due to put into operation new production capacity, with the desire to gainmarket share and the necessary resources.Although not always businesses also face new potential competitors, but the integrationrisk of new competitors in the industry has influenced also affect business strategy.Besides, the protection of competitive positions in business including the maintenance ofthe legal barriers to prevent intrusion from outside is necessary. These barriers are: theadvantage due to large-scale production, product diversification, requires large financialresources, cost advantages that competitors can not create. Another barrier to prevent theentry of new potential competitors is strong resisting of the standing organizations.The alternative productsPressure due to substitute products limits the potential profit of the industry due to thehigh rates controlled. If you do not pay attention to the potential replacement products,enterprises should narrow market. Therefore, businesses are constantly researching andchecking the potential replacement items.The majority of alternative products is a result of the technology boom. Want to succeed,businesses need to pay attention and devote resources to develop or apply newtechnologies to their strategies.1.2.2. Step 02: Internal environment analysisEvery organization has its strengths and weaknesses in certain business sectors. The innerstrengths and weaknesses with external opportunities and threats, and clear tasks that arethe basic points should be considered when setting goals and strategies of business. Page 7
  • 8. Capstone project reportThe objectives and strategies are designed to take advantage of the strengths andovercome the weaknesses inside - the factors that managers can control. In a business itelfthat includes all elements and systems inside of it, to try to analyze carefully the internalfactors in order to identify their advantages and disadvantages; on that basis, measures topromote the advantages and reduce disadvantages to achieve maximum advantage. Theinternal factors mainly include functional areas such as: human resources, research anddevelopment, production, finance and accounting, marketing and leadership, etc...To understand the significance of the activities of the business, the value chain need to beanalyzed to determine which activities create value for customers, so that the focus onbuilding activities to create advantage for business.Figure xxx: The value chain model of Michael E.Porter1.2.3. Step 03: Determine missions and objectivesMissionsThe mission of the enterprise is a statement of long-term value of the businessresponsibilities, beliefs and ideas of the participants in the organization. The determinationof the mission is essential to set goals and formulating strategies in an effective manner.ObjectivesThe term "target" refers to specific criteria or results to be achieved in the future business.Objectives usually reflect expected state can be done and should be done at a time or aftera certain time.Usually the target now divided into two types of short-term goals and long term goals.Short-term goals have to be very specific and detailed results in a decision cycle. Short- Page 8
  • 9. Capstone project reportterm goals are usually a year. The long-term goal is the desired results set out in arelatively long period of time.Goal should be set properly because it is crucial in making the business strategy. Commongoals must meet the following criteria:- The specific objectives.- The flexibility of the target.- The measureability of the target.- The feasibility of the target.- Consistency of objectives.- Acceptability of goals.- The time line of the target.1.2.4. Step 04: Formation strategies of businessStrategic management process consists of three phases:Phase of strategy formationThis is the first stage, its a foundation and play a very important role in the whole processof strategic management. In this phase should define the vision, missions andorganizations strategic objectives, development tasks, identify opportunities and threats tothe organization from the outside, showing the strengths and weaknesses inside, settinglong-term objectives, generating alternative strategies and select specific strategies topursue. Phase 1: Input stageExternal Factors Competitive Profile Matrix (CPM) Internal Factors Evaluation (IFE)Evaluation(EFE) Phase 2: Combination stateMatrix of Matrix strategic Boston Matrix Internal Matrix of mainStrengths- position and consulting - External (IE) strategyWeaknesses- action group matrixOpportunities- evaluation (BCG)Threats (SPACE)(SWOT) Phase 3: Decision stage Quantitive Strategy Planning Matrix (QSPM)Table xxx : Analytical framework for strategy formulationImplementation strategy phase, or called action stage of strategic management:This phase is to mobilize resources to implement the strategy has been set up. Includingthe setting of annual objectives, policy making, and resource allocation to establishstrategies can be implemented. This period is often considered the most difficult stage in Page 9
  • 10. Capstone project reportthe strategic management process. The implementation of the strategy requires discipline,dedication and self-sacrifice of the individual.The strategic review stage: Monitoring and review the results of activities and strategicimplementations; including measurement to determine the performance of individuals andorganizations, including the corrective actions needed.All administrators and staff at all levels in the organization, not just the owner or seniorexecutive officer, must accossiated with activities of implement and evaluate strategies;the participation is crucial to achieve adherence to the necessary changes.1.2.5. Step 05: Selecting optimal strategiesDue to the nature of the long-term strategy is a matter of strategy selection is crucial forthe future of the business. The strategy choice of the enterprise whether on the basis ofintuition or analysis must be based on the actual situation of the enterprise and thedevelopment trend in the future. Therefore, a strategy chosen must meet the followingrequirements: in accordance with the mission and business objectives that are pursued;avoid shock to the process of business operations; consistent with resource capabilities ofthe business.The choice of the optimal strategy is done by the quantitative strategic planning matrix(QSPM). By the analysis of the results of external elements matrix, the internal elementsmatrix, competitive profile matrix and especially the SWOT matrix; QSPM allowsevaluating the specific advantages of each strategies in the same comparison group,allowing administrators to choose the best strategy for the business.1.3. The levels of strategy management and type of strategiesStrategic management can occur at many different levels in the organization. Usually thereare three basic levels of strategies:1.3.1. Corporate level strategyIt’s a pattern of decisions in a company, it identifies and defines the purpose, theobjectives of the company, identify the business operations which the company pursued,create policies and design the basic plan to achieve the objectives of the company.In an organization with the size and the level of diversity, "corporate strategy" is oftenapplied to the entire enterprise. Company strategy set out to identify the business activitiesin which the company will compete and distribute resources between business activities.Company strategy related to the overall objectives and the expected size of the business,towards the basic long-term goals, development orientation of the organization. By FredR. David, strategies for companies with 14 basic strategy, divided into four groups:- Integration strategy group, including three strategies: Forward integration strategy, backward integration strategy, and horizontal integration strategy. The strategy of this group allows companies to gain control over distributors and competitors.- Intensive strategy group, consisting of three strategies: market penetration, market development and product development. Characteristics of these strategies require focused efforts to improve the companys competitive position with existing products. Page 10
  • 11. Capstone project report- Business expanding strategy group, including three strategies: concentric diversification activities, horizontal diversification activities and diversify the block type of activities.- Other strategy group such as joint ventures, downsizing operations, cut operating, liquidation or synthetic.1.3.2. Business units level strategyBusiness strategy is planed in order to determine the selection of specific products ormarkets for its own business operation, and it determine how the company will competewith a business with the known position of the company itself among its competition.Strategic business units of the business to determine how each business unit will try tocomplete its goal to contribute to the completion of the company target. If the company isthe industry, the business unit level strategy can be considered as company-level strategy1.3.3. Funtional units level strategyStrategic level functional (or operational strategy) is a strategy of the functional parts ofthe organization (R & D, production, marketing, finance, ...) This strategy helps improve,enhance operational efficiency in the company, helping business strategy, corporate levelstrategy implementation effectively.Thus the strategies of three basic levels are not independent but have close relationshipwith each other. Strategic level is a precondition for lower-level strategy, and subordinatestrategy should adapt to superior strategy then process of implementation strategy has theability to be successful and effective.In addition to these three basic levels of strategy also have a global strategy, to enter andcompete in the global environment, businesses can use four basic strategies:- Multinational strategy (multidomestic)- International Strategy (international)- Global Strategy (global)- Transnational strategy (transational)In summary:Building business strategy plays a very important role for any business to survive andimprove competitive position in the fiercely competitive market like today, especially onthe livestock feed market. The study of theoretical in general about business strategy tohelp businesses to get a comprehensive view of the factors impact and affect to thebusiness, as the basic platform for the construction of proper orientation, feasibilitystrategic planning and propose appropriate solutions.CHAPTER 2: ANALYSIS BUSINESS OPERATION OF EVIALISVIETNAM AND ECONOMIC ENVIRONMENTS2.1 Status of business situation of Evialis Vietnam2.1.1 Introduction to Evialis Vietnam Page 11
  • 12. Capstone project report2.1.1.1 History and developmentEstablished in 1995, EVIALIS Vietnam is a subsidiary of INVIVO NSA group (France)is a leading group with 60 years experience in the field of nutrition and animal health,based in 18 countries and over 5.000 employees on the worldThe information below are the importation events and achivements of EVIALIS Vietnamhas achieved since first step in Vietnam from 1995 to now.1995: Establish Representative Office in Vietnam, trade promotion and introduction ofpremix and veterinary medicine1998: Establish Joint Venture Company GUYOMARCH – VCN in Hanoi with NationalRearing Hatchery Institute (NRHI ), the first factory specialized in producing animal andpoultry feed.2000: Minister of Agriculture & Rural Development awarded certificates of merit on thecontributions and accomplishments join the International Exhibition of Agriculture.2001: Establish GUYOMARCH-VN in Binh Duong, No.2 factory specialized inproducing animal & poultry feed.2003: Building the factory OCIALIS Vietnam in Binh Duong, No.3 factory specializes inproducing aquafeed.2004: Establish the GUYOMARCH center in Bien Hoa - Dong Nai, specialislized intechnical support and provide testing services for livestock and poultry.2006: Establish OCIALIS center in Long Xuyen - An Giang, specialislized in technicalsupport and testing services for fish. Establish Hung Yen R&D, specializing in research onpoultry nutrition. Peoples Committee of Hanoi city commendation awarded by the manyachievements in business and contributing to economic development and social capital.2007: Establish OCIALIS center in Duc Pho - Quang Ngai, specialislized in technicalsupport and testing services for shrimp. Establish Nha Be R&D in HCM city, specializingin research on shrimp and fish nutrition2009: Establish Nha Be R&D in Bien Hoa – Dong Nai province, specializing in researchon pig nutrition. Establish LAREAL Vietnam, No.5 laboratory of EVIALIS on the worldspecializing in food and feed analysis, achieving ISO 17025 certification. EstablishGrimaud Vietnam Company. A cooperation projects Evialis Vietnam & Grimaud Groupspecializes in producing and distributing Grimaund ducks. Establish OCIALIS center inCan Tho city, specializing in technical support of shrimp and fish. Establish Dong AnhR&D in Dong Anh – Ha Noi, specializes in research on poultry nutrition.2010: Building the factory GUYOMARCH Dong Thap in Chau Thanh - Dong Thap, No.4 factory specialized in producing animal and poultry feed. Building a new officeEVIALIS Vietnam in Binh Duong2.1.1.2 Business field and marketEvialis VN is an expert in the field of manufacturing and trading of animal feed, poultryand seafood quality, in accordance with the pets nutritional needs for each stage ofdevelopment from small to large. In addition to the above main line of business, the Page 12
  • 13. Capstone project reportcompany in the field of business analysis to support the animal feed industry. However,the range of research topics as food for pigs.. Special feeds Blended scabies and worm Cough mixture for pigs. treatment for sows and boars Piglet feeds From 7-day-old piglets until From 8 old piglets until the the weight is 8kg. weight is 15 kg.Fattening pig feeds 15-30 kg 30-60kg 60-finisher 15-finisher After pigs pigs weaning to finisher Sow feeds Mix Mix Concentrate Concentrate Page 13
  • 14. Capstone project report2.1.1.3 Organization chartEvialis Vietnam was established and registered business under the name calledGUYOMARCH, this is the companys brand strategy on the industrial food market.Evailis VN is to promote the brand image of Invivo NSA Corporation in Vietnam. And inVN, Evialis VN has established two head offices are as follows:Diagram of business of Evialis VN in VN market Animal feed Aqua feed Analyse center VeterineryOrganization Chart the function of Evialis departments VN as follows2.1.2 Business result2.1.2.1 Revenue of product groupsRevenue of product groups in the last 5 years is as follows: Page 14
  • 15. Capstone project report Unit: million dong Group of products 2007 2008 2009 2010 2011 Piglet feed 46,622 117,067 187,604 178,178 220,526 Fattening pig feed 224,323 391,874 670,345 770,343 1,008,253 Sow feed 40,515 114,742 119,895 118,964 154,064 Special products - - 3,394 2,390 2,281 Total 311,460 623,682 981,238 1,069,874 1,385,124According to data above we see that company’s revenue was increased well in theeconomic situation facing a lot of difficulties. This means that the companys productsgaining the trust of consumers and gradually increase market share. Gross margin of product groupsThe companys development process is also reflected in the average gross profit (dong /kg) of the company tends to increase in recent years, contributing to increased profits forthe company. This achievement shows the R&D department was working effectively,found materials replace traditional materials in animal feed industry with lower cost whilestill ensure the quality standards of the company was committed. In the difficultycondition of the world economy as well as price of raw materials increasing, this is apositive as well as the companys strategic aim is to compete with other companies bycreating products with low price but ensure the quality and profitability of the company inthe context of increasing of feed price. 2007 2008 2009 2010 2011 Group of products VND/kg % VND/kg % VND/kg % VND/kg % VND/kg %Piglet feeds 1,241 16.26% 2,310 22.64% 2,259 21.50% 2,620 21.59% 2,407 17.76%Fattening pig feeds 679 15.04% 1,472 22.90% 1,222 17.94% 1,371 17.00% 2,083 22.48%Sow feeds 914 18.22% 1,617 22.25% 1,270 21.02% 1,427 19.30% 2,023 23.56%Spaecial feeds 1,367 17.74% 1,740 16.22% 2,345 22.47% Average 763 15.63% 1,607 22.73% 1,367 19.00% 1,526 18.03% 2,113 21.84% Page 15
  • 16. Capstone project report2.1.2.3 Financial situationKey financial indicators of company Evialis Vietnam in recent years as follows: 2007 2008 2009 2010 2011Performance1. Return on Equity 33.8% 39.6% 27.5% 14.7% 24.7%2. Return on Assets 15.3% 14.1% 10.6% 6.3% 11.5%3. Return on Invested Capital 27.2% 29.6% 20.5% 16.9% 23.8%4. Profit margin 4.1% 5.7% 4.1% 2.1% 4.0%5. Gross margin 9.7% 12.9% 12.1% 12.2% 13.9%Capital management1. Asset Turnover 3.8 2.5 2.6 2.9 2.92. Fixed Asset Turnover 8.0 6.0 6.8 7.1 5.83. Inventory Turnover 12.0 5.2 5.6 8.7 8.74. Inventory Period 30 70 65 41 415. Account receivableturnover 35.4 25.6 17.2 13.8 27.86. Collection Period 10 14 21 26 137. Days sale in cash 11 5 1 4 5Finance situation1. Equity - Asset ratio 45.4% 35.7% 38.6% 42.8% 46.6%2. Debt - Asset ratio 54.6% 64.3% 61.4% 57.2% 53.4%3. Debt - Equity ratio 1.2 1.8 1.6 1.3 1.14. Financial Leverage 2.2 2.8 2.6 2.3 2.1Solvency1. Current ratio 1.2 1.1 1.1 1.1 1.02. Quick ratio 0.5 0.3 0.3 0.5 0.43. Interest ratio 9.3 7.0 6.8 3.5 10.5According to the above data we can believe that the company will develop stable andsustainable in the coming years.2.1.3 Assessment of company’s real situationSummary of indicators of company Evialis Vietnam has achieved as follows: Indicators 2007 2008 2009 2010 2011Total asset 181,997 434,300 553,249 585,597 714,206Gross sales 684,244 1,079,032 1,444,428 1,717,211 2,055,868Profit from business activites 30,065 75,183 71,827 46,087 89,951Other incomes 1,003 239 1,459 4,527 20,396Profit before tax 31,068 75,422 73,286 50,613 110,347Copporate income tax 3,133 15,211 14,570 13,749 28,004Profit after tax 27,935 60,211 58,716 36,865 82,343 Page 16
  • 17. Capstone project reportAccording to above datas we see that:  Total asset: total assets increased due to two main reasons. The first is to increase inventory to meet the needs of production as well as increasing of volume sale. The second is to come from investment projects as laboratories LAREAL and new plant in Dong Thap.  Gross sales: again we see the development of the company through revenue indicator. Revenue is always higher than the year before. This means that development of the company is always stable and step by step extend market share. Each year the revenue always increased by at least 20%.  Profit after tax: the difficult economy in 2009 and 2010 led to the prices of all commodities are increasing, particularly the cost of fuel and raw materials that has affected the production cost and make the profit after tax of the business to tends to decrease slightly in 2009 and decreased very sharply in 2010. However, with the flourishing of the economy in 2011, the company has overcome difficult to achieve the highest net profit.2.2 External environment analysis2.2.1 Macro environment2.2.1.1 EconomyVietnam is a potential agricultural country in Asia and the world. Vietnam is the worldssecond largest exporter of rice, coffee, cashew, rubber and a world leader in the export ofpepper. Although the livestock industry didn’t contribute much foreign currency and notreally outstanding but it doesn’t mean no advantage in the process of economicrestructuring. To make livestock industry to really become a key economic sector, it isnecessary to look at the real facts and innovation awareness on this issue. Page 17
  • 18. Capstone project reportIn Vietnam, the livestock industry contributed a rate ranges from 22.6% to 25.5% in thetotal GDP of the argicultural industry in the period 2001-2011 and is expected to increaseto 25%- 26% in the period 2012-2020 (Department of Livestock). TT MONETARY INDICATORS FROM 2012-2015 1 Growth in money supply (M2) 15-17% 2 Growth rate of domestic credit 17-20% 3 State budget deficit 4.5-4.9% GDP 4 The trade deficit 5-8% GDP 5 Balance of international payments 3-4 billion surplus 6 Foreign exchange reserves Equivalent to 6-8 weeks of importsWith the economic development, the consumers needs of food is more and more growing,but livestock industry is still not enough to meet domestic demand. Do not really have anew approach, high percentage of livestock traditionally with features as small, scattered,unfocused number large enough to become a commodity product, not the best quality, donot focus on market planning and accounting for economic efficiency. This farmingmethod has many disadvantages, but is the essential source of income to improve livingstandards of the poor. According to the estimation of experts, income from livestockindustry will be 70% of the income of the poor.Ten years ago, the demand for meat in Hanoi and Ho Chi Minh City is 500 tons / day.Today, the daily consumption in HCM is around 800 tons - 1,000 tons, Hanoi needs 300tons / day. Only pork, annually two cities need nearly 13 million tons equivalent to 7million - 10 million pigs with weight 100kg/pig, not to mention the needs of 70 millionpeople in different regions of the country. Obviously, if you do not convert livestocktranditional methods towards modern method applications, will not meet the demand ofdomestic consumption and export.With the economic conditions mentioned above, we believe that the need of the livestockindustry is extremely large and very important for the development of the Vietnameseeconomy. Political - LegalLivestock really is one of the important methods contribute to poverty alleviation in ruralareas. However, how do farmers access to capital, the best application of the achievementsof science and technology, contributing to the development of animal husbandry in thedirection of industrialization and modernization is a problem with more urgent.In recent years, many policies of the Party and the Government on economic development,promote industrialization, modernization of agriculture and rural development, structuraltransformation of plants and animals, went into real life, contributing to the developmentof the livestock sector. A new mode of production towards sustainable goods in thelivestock industry is gradually formed. Page 18
  • 19. Capstone project reportFarmer excited Decision No. 225/1999/QD-TTg dated 10-12-1999 and Decision 17/2006/QD-TTg dated 29-01-2007 of the Prime Minister on the variety program, animals and forest trees by2010. Series of farm cow milk, pigs goods, goat, chicken, duck ... has flourished. Extensionsystem from the central to the local level has been gradually popularized new advances on thesame techniques, so that technical progress for housing in accordance with the new technology,new breeds of livestock has people applied, millions of households out of poverty alleviation.Approved by Decision of the Government of Livestock Development to 2020, "livestock will befundamental changes in the direction of industrial productivity, quality, efficiency andcompetitiveness; translated controldiseases and hygiene and food safety; meet food needs fordomestic consumption and export-oriented "," increase the proportion of livestock in agriculture:32% by 2010; 38%in 2015 and 42% in 2020 ". All resolutions and directives of the Party and theState stand firm to help the livestock industry have a legal basis to develop during the integration. Social culture – PopulationVietnams population is increasing year by year, an average of 1% per year. Till now there arecurrently about 89 million people. Population along with peoples lives have been improved,enhanced educational level. Spend more structure there is a change in the standard of living andsocial influence. In addition to food, clothing, housing and more people pay more attention toother issues such as: education, culture, entertainment, traffic and especially health. So thedemand for meat consumption also increased. Especially in large cities, under the impact ofeconomic growth problems of nutrition in your diet is more interested. On the other hand with therapid population growth of the VN test animal needs very urgent, especially pig pork consumptionhabits of the Vietnamese accounting for 46% of the consumption of meat. Science – TechnologySo far, the Vietnamese livestock industry itself does not have the production model ofcommunity to be competitive with foreign companies in Vietnam and other countriesaround the world. In the legal framework of macro policy is not enough clarity about theproduct chain closed (from livestock for meat, dairy, eggs, food, food protein, foodsupplements, equipment barn animal husbandry, veterinary medicine, industrialslaughtering, meat processing, dairy industry and market services).Not have a long-term policy and planning for the training of scientific and technical staffas well as technical subjects synchronous breeding, biotechnology, equipment, processing,veterinary ... qualified expertise. Actually started with the so down on intensive technicalstaff, dedicated to the craft not only in livestock but also in many other areas as livestockdevelopment.Investment in scientific research is spread, the research is not comprehensive and long-term; yet for improving response at each stage of production and lack of continuity;technical solutionsnew, specific applications for the development of production; lack ofspecific ecological zones, economic zones in the study to develop appropriate; manysubjects non-economic factors, is difficult to apply to production.Our livestock industry is still a small livestock, livestock households with high percnetagerate and lack of planning, not sustainable development. According to data published by theDepartment of Animal Husbandry, in 2010 there were 8.5 million households livestockactivities but only 70% of these are the livestock barn, the rest are free ranging. Currentlythere are over 20,809 the farm, SPCN industry, in which pigs account for 45 - 50% ofpoultry from 30 - 35%, livestock food industry reached 53.8%.Meanwhile, the level of the backward peoples livestock productivity is not high with highprice. Economic experts said that the cost in Vietnam is now too high, more than 20%compared to other countries in the region, while the country also cost more than 20% Page 19
  • 20. Capstone project reportcompared to other countries with animal aquaculture development. This is due to increasein transport costs, high interest rates, yield low livestock farmers, especially high feedprices. Global environmentPromote strong internal resources, plus more diversified cooperation with the world toexchange experiences and learn from friends in the trend of globalization, the integrationextensive livestock industry will certainly become an industryimportant fact in the not toodistant future.Vietnam has joined the AAAP organization, association of producers in Asia andAustralia was established in 1980, since 1992 with the goal of exchanging newinformation on animal science, introduced the processtechnology, new products forlivestock.Besides these advantages, the integration with the world can bring us many challenges forthe livestock sector to import food from abroad into Vietnam. For example, in early 2008,before the heavy losses of livestock due to disease and malaria, the government hasdecided to import tax cut of pork, chicken from 30% to 20% and 12% to cover shortage offood supply in the country. However, only a few months later, the imported meat wasflooding the market and causing heavy losses to farmers.The lesson of 2008 is that tax worries import more livestock products cut from the 2012high. Specifically, the meat of bovine animals decreased from 20% to 14%, frozen porkfrom 30% to 15%, meat processing from 40% to 22% ... Mr. Nguyen Dang Vang, formerdirector of the Animal Husbandry Department, said that the tax on not decrease but alsopotential risks. Former Director of the Institute of Commercial Research, Prof. Dr. NguyenVan Nam noted, if not urgent measures to promote animal husbandry, improving thecompetitiveness of the livestock products, we risk losing their home is being.The reduction of the livestock products under WTO commitments is force majeure, inaddition to boosting industrial production focus, improve farming technology - accordingto Prof. Dr. Nguyen Van Nam, we have the right to do and should do is to set thetechnicalbarriers. However, to this point, according to the survey, not many criteria, standards offood safety and hygiene-product strong enough to prevent, livestock poriducs poor qualityflow into our country.According to the Economic Research Institute of Central, after more than four years ofjoining the WTO, Vietnams agricultural production was growth of only 5-6% / year, in2009 only 3.5%. Although there are positive signs from the value of agricultural exports ofVN increased in 4 years, especially some products have a competitive advantage, such asrice, coffee, rubber, cashew nuts, pepper, vegetables, seafood ... but production capacityand competitive of these products overwhelmed, such as the livestock products. Noq allmain exported products are the threshold, can not increase the area, productivity increasedonly in moderation. Many items have to face the risk of lack of raw materials such as fish,nuts, wood ... Each year Vietnam has to import nearly 100% soybean oil (about 2-2.5million tons / year), 1 million tons of corn, 2.5-3 million tonnes of rice bran ... forprocessing feed.2.2.2 Micro environment2.2.2.1 CustomerWhen considering the production of animal feed business briefly, we can see that thedealer is their most important customers, the buying rate at about 41% of the total volume Page 20
  • 21. Capstone project reportof food, followed bythe reseller to buy 26%, other enterprises buy 16% and 12% ofindustrial farms. The small farmers are not regular customers of the feed business becausethey only buy 5% of the total food.According to the scale of production, sales strategy small business is completely differentfrom medium and large enterprises. Small businesses tend to diversify their audience,selling to dealers, small businesses and farms, while large and medium-sized businessesprimarily sell products to dealers. In general, the larger the scale of production, thepercentage of food sold to dealers as high and the proportion of sales to the lower smallfarms.For current customers of Evialis VN are distributors and farms with 90% of distributorsand 10% farms. With the current animal model, the distribution is still the main channel ofthe feed into the hands of farmers.But in the future, when the small animal model transferto concentrated animal model (model farms), farm market segment will increase.Although Evialis VN only distribute products directly to the distributors level I, but thecompany is responsible for developping market for distributors level I by supportingtechnical support to secondary distributors and small farms that are agent of distributorlevel I. Currently, system-level agent I of Evialis Vietnam was opened in the majority ofdistricts in the provinces of farms.Different customers will have different needs for products. With the distributors level I,price and sales policies are more important than product quality factors. However, productquality is an important factor to keep customers, because if the product quality is not good,even if the sale price and good sales policies to some farmers will not use this product.Anh with large farms, the quality of products is top priority. CompetitorWell understading about a competitor is an important requirement for the development ofthe companys business strategy. At present, our country has 233 feed factory, of which 58(24.9%) of the foreign-invested companies (including 100% foreign-owned companiesand joint ventures ). Industrial feed market share of some leading foreign companies suchas CP Vietnam accounts for about 18.1%, Pronco 8.8%, Cargill is 7.1%, and EH is 5%(Source: Department of Livestock).According to our assessment, so far the company with 100% foreign investment holds 65-70% market share. Most corporations producing the worlds second most food has beenpresent in Vietnam; CP Group (Thailand); Cargill (USA), NewHope (China) ... Thanks totheir influence, Vietnamese enterprises also studied the method of production, sales,market ... so since 1995 and is now a private company and a specialized stock feedbusiness success as the: VINA company, Drive burned ... But the small market share ofthe Vietnamese only 20-30%. The management of VN enterprices is not good, lack ofcapital, lack of technology, not strong enough to compete with 100% foreign investmentcompany.Some of the strengths and weaknesses of the competitors:Company Strenth Weak - Breeding animal - No focus on free marketC.P - Processing program - Limitation of credit - Competitive Price - Brands - No breeding animalCargill - Good quality - Good sales policies Page 21
  • 22. Capstone project report - Promotional Policy - Brand goes to the heart - Limitation of creditProconco - Stable quality - No breeding animal - Power distribution system - Low price - Unstable qualityANT - Many products - No breeding animal - Domestic BrandLai thieu - Quite quality - No breeding animal - Domestic BrandVina - Quite quality - No breeding animal2.2.2.3 VendorDependence on raw materials for the production of aimal feed is one of the challenges thatthe livestock industry is facing. Reduced dependence on imported raw materials, towardautonomy raw materials for industry is an expectation of our agriculture. Raw materialneeds are increasing, while today 70% of the raw material that we have to import.Annual the import value is arround $ 2 billion of feed raw materials. In which, nearly amillion tons of corn; circuit under a million tons of wheat, shot glasses bran, vegetable oil,animal fat; 2-2.5 million tons of soybean meal from the U.S., India, Argentina, Brazil...;hundreds of thousands of tons of fish meal from Peru, Chile, Mexico, etc.; bone Mealmeat from Hungary, Poland, maté; Enter hundred thousand ton DCP minerals fromYunnan China. Additional food additives, types of minerals, vitamins, aroma, color, flavor... collectively premix are not be manufactured, imported from all continents, 40 countriesand territories around the world.In recent, one of hot problems that livestock faces tending to increase the price of animalfeed. Large dependence on imported raw materials such as soybeans and corn, high tariffsand low productivity of this material is considered to be the cause of the domestic feedprices rise. Price feed industry in Vietnam is about 10-15% higher than other countries inthe region such as Thailand and China. Vietnam imports an estimated 20-30% of thevolume of raw materials used for production of animal feed, equivalent to about 45% ofthe total value of raw materials.InVivo NSA, the parent company of Evialis VN, has agribusiness operations in the world,so Evialis Vietnam has good relationships with the major supplier of agricultural productsand the prestige of the world such as Cargill, Bunge, Scoular, Dubai oil milk, Adani ... soalways ensure quantity and quality of raw materials according to the needs of thecompany. Premix is a vantage point of Evialis the VN because InVivo NSA also hasmanufacturing and trading premix acitvity. Therfore, premix is not a matter of concern ofEvialis Vietnam. Substitutive productWith the increase in the price of animal feed led to the increase in the price of meat as wellas consumer fears about food safety issues in the livestock and poultry (blue ear pigdisease, foot and mouth disease anda number of companies produce animal feed use ofgrowth) has made consumers think of alternative products such as shrimp, fish and moreimported products. Page 22
  • 23. Capstone project reportWith the goal of avoiding loss of consumer confidence for pork, the state has issued acircular 33/2012/TT-BNNPTNT about hygiene regulation, ensure food safety for theestablishmentmeat and edible by-products from animals treated in the form of fresh food.5 requirements for the conditions and duration of storage of meat and by-productsregulations: "Do not use a chemical to preserve meat and fresh products. And meatproducts stored at room temperature only sold within 8 hours after slaughter. Meat and by-products from the slaughter be stored at 0-5 degrees C only sold within 72 hours afterslaughter. For products is the stomach, small intestine and large intestine stored at 0-5degrees C only on sale for 24 hours after slaughter.If we do not solve the problem of pricing and food safety, meat market fades intoalternative products such as shrimp, fish and meat products imported from abroad. Potential competitorsAlthough the livestock sector in the country is difficult, but the field of investment inproduction of animal feed has attracted many investors because demand for animal feed inthe country remains high and tends toincrease in the future.Feed industry in Vietnam is still many opportunities to grow as the current productioncapacity to meet half of the demand.However, the transformation of this potential intogrowth and profit is very difficult, especially with the domestic manufacturer.When developing the livestock sector development strategy, the Ministry of Agricultureand Rural Development estimates that by 2015, the demand for animal feed (feed) ofVietnam around 18-20 million tonnes, and will rise to 25-26 million tonnes by 2020.Domestic supply shortfall close to current production capacity can be viewed as a verygood opportunity for investment and development of feed production in Vietnam.Some feed companies joined markets:- On 20/10/2011 Co. Ltd feed Kyodo Sojitz has formally held the groundbreakingceremony Plant Project SX feed animal capacity 200.000tan/nam to 3.34 hectares inIndustrial Thinh Phat. The project is expected to formally put into operation in early 2013.Project SX plant fodder investment cooperation between the two big groups of JapaneseSojitz and Kyodo corporation with $ 24 million invested.- On 11/11/2010 at Dong Van Industrial Zone, Ha Nam. Manufacturing And TradingCorporation Complete Yang held the opening ceremony of the plant feed brands THAIWAY.- On 8/9/2011, Tongwei Group (China) officially celebrated the inauguration of LtdTongwei Hai Duong in industrial way Cam Giang District, Hai Duong Province,specializes in manufacturing and sales of the product linefeed for pigs, chickens, ducks;using equipment and advanced production technology world. The company has a totalinvestment of $ 10 million, the plants design capacity of 200,000 tons / year.Because of late joined in the market, new feed companies have difficulties in setting upthe big dealers with sales of over 100 tons per month. So how the business of the newcompany is aimed at secondary agent in the distribution of other companies and take themto an agent of the company I own, this is also voluntary responseexpectation level I wantto become an agent with incentives in the sales policy of the agent when level I can not actas agent of the company that they are acting as agents II for failing to meet sales asneedsof these companies. Page 23
  • 24. Capstone project reportWith the way this has caused difficulties for Evialis Vietnam in strengthening anddeveloping its market.However, with good quality and stable, Evialis Vietnam still firmlysustainable development and relatively good image in the animal feed market in Vietnam.2.2.3 External factor evaluation matrix (EFE) Weighted Factors Weights Ratings scores Macro factors OpportunitiesThe average population growth of 1% / year 0.10 3 0.3Average annual GDP growth of 5-6% / year 0.07 3 0.21Per capita income being increased 0.10 3 0.3State policies to support the development of livestock industry 0.05 4 0.2 ThreatsMacroeconomic instability 0.02 2 0.04The varying on feed safety standards 0.03 2 0.06The complication of disease and weather-climate 0.01 1 0.01 Micro factors OpportunitiesLivstock feed industry development 0.10 4 0.4Livestock feed demand is expected to grow 5-7% / year 0.05 4 0.2Livestock feed production technology 0.15 3 0.45 ThreatsMany competitors 0.05 1 0.05Many new companies entrance the industry 0.03 1 0.03Customers have more choices 0.02 1 0.02Customers are sensitive to price 0.05 1 0.05High competition in the market 0.05 1 0.05Dependence on imported raw materials 0.10 2 0.2Vietnam still can not produce premix 0.02 2 0.04 1.00 2.61The total score is 2.61 (compared to the average was 2.50) shows the resilience of EvialisVN pretty good for the opportunities and challenges from the external environment.2.2.4 Competitive profile matrix (CPM) Evialis Vietnam CP Group Proconco ANT Láithiêu Weighted Weighted Weighted Weighted Weighted Factors Weights Ratings scores Ratings scores Ratings scores Ratings scores Ratings scoresFinancial Position 0.10 2 0.20 4 0.40 4 0.40 3 0.30 2 0.20Manufacturing technology 0.15 3 0.45 4 0.60 3 0.45 3 0.45 2 0.30Production capacity 0.15 4 0.60 4 0.60 4 0.60 4 0.60 3 0.45Product Quality 0.10 4 0.40 4 0.40 4 0.40 2 0.20 2 0.20Distribution network 0.05 3 0.15 3 0.15 4 0.20 2 0.10 3 0.15 Page 24
  • 25. Capstone project reportMarketing 0.03 2 0.06 2 0.06 3 0.09 3 0.09 2 0.06Market Share 0.02 2 0.04 3 0.06 3 0.06 2 0.04 2 0.04Price Competitiveness 0.05 2 0.10 3 0.15 2 0.10 3 0.15 4 0.20Market Expansion 0.02 1 0.02 1 0.02 1 0.02 1 0.02 1 0.02Alliances 0.02 1 0.02 1 0.02 1 0.02 1 0.02 1 0.02Customer services 0.05 3 0.15 2 0.10 2 0.10 3 0.15 2 0.10Customer loyalty 0.02 2 0.04 2 0.04 3 0.06 2 0.04 1 0.02Management 0.05 2 0.10 2 0.10 1 0.05 1 0.05 2 0.10R&D 0.05 3 0.15 1 0.05 1 0.05 2 0.10 1 0.05Business experience 0.05 1 0.05 3 0.15 3 0.15 2 0.10 3 0.15Human resource 0.04 1 0.04 1 0.04 1 0.04 1 0.04 1 0.04Innovation 0.05 1 0.05 1 0.05 1 0.05 1 0.05 1 0.05 1.00 2.62 2.99 2.84 2.5 2.15Not to mention the big rivals such as CP, Cargill or Proconco, picture competition ofEvialis Vietnam also pretty good compared to the remaining competitors in the market.This is the basis for the Groups continued investment in Vietnam with the opening ofmore and more the place of business of the company in the market.2.3 Internal environment analysis2.3.1 Internal environment2.3.1.1 Management abilityWith more than 10 years of experience in the field of animal feed in Vietnam, the teamleader of Evialis VN has a deep understanding of the animal feed market as well as theneeds of the dealers and producersfeed for animal feed products in order to developappropriate policies for the development of the market.As foreign companies operating in the Vietnamese market, the companys policy is towork within the framework of Vietnamese laws, not to rise to the tax fraud cases as wellas other provisions of law. So Evialis $ is always a good image in the eyes of theauthorities.On the other hand, with links to the Institute of Animal Husbandry for the establishmentof the company LD GUYOMARCH - Powered has created the political and economicrelationship to the board in order to get the information in time to change policyof the stateto make strategic decisions for the company to change this policy. Financial capacityIn terms of production scale, we can see large scale enterprises tend to agents debt, slowpay more. However, it should be noted that although businesses say they can let thecustomer defaults, late payment, but the business market feed current late payment methodis not universally processing of large enterprises for customers.It should be noted that other services, such as commissions, discounts to resellers andmany large and medium-sized enterprises provide more than small businesses. This resultmay reflect the advantages of large-scale capital firms than small businesses. Page 25
  • 26. Capstone project reportFor the animal feed market, Evialis VN debt does not advocate for many customers thatthe company policy discount to customers for their sales to compete with other businessesin addition toimprove the quality of products to attract consumers of livestock. Capital ofthe enterprise is used for raw material procurement strategy and development of aquaticfood market is facing many difficulties today.In the current difficult economic conditions, the company promoting the procurement ofraw materials to stabilize the purchase price of raw materials and limit the volatility of rawmaterial prices on the market for that financial capacityof the company is strong enough todevelop the market and expand the companys investment projects in the future as newfactory in Dong Thap, boring new plant in Henan, as well as plans to build afactorypremix production and veterinary medicine in the future. Human resource managementUp till now, Evialis VN 700 in labor that labor accounts for 81.67% and Female workersaccount for 18.33% and professional workers accounting for more than 70%.The majorityof employees are under 40 years of age, suggesting that human resources of Evialis VN isa team of young workers should be more ambitious and district heat, this will be thefoundation for the future development of the company.Evialis Vietnam is a subsidiary corporation of InVivo NSA, a large group of France andEurope should also attracted many experts around the world such as France, Thailand,Mexico, Philippines. These experts have contributed a lot to the success of the currentEvialis VN.Evialis Vietnam always considers human resources as one of the competitive advantagesof the company should have had a lot of policies to retain and motivate workers to work inorder to contribute to the development of the company. Policies such as: createadvancement opportunities for employees, employee training plan for the locationplanning, accident insurance 24/24, health insurance has been been deployed in EvialisVietnam. Production capacity and operationCurrently the production capacity of Evialis VN is 500,000 tons a year and will feed up to800,000 tonnes when the new plant to be built in Henan in 2013.Quality control is now considered one of the weakest points of the feed industry inVietnam. In general, the advanced international standards of quality control only foreignenterprises and joint ventures apply. Most of the foreign companies have quality controllaboratories, while less than half of the firms have this equipment.To affirm its Page 26
  • 27. Capstone project reportcommitment to the quality of its products, 2009 Evialis VN has established laboratoryLAREAL $ ISO 17025 standard not only for needs analysis and quality testing of rawmaterial as well as intoits output, but also expand their business to serve the customeroutside. Currently LAREAL Vietnam has nearly 300 clients with great customer feed asCP Group, Cargill, JAPFA ... 300 Number of customers 250 200 Food 150 Feed 100 50 0 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12For ISO, half foreign business certificate compared to less than a quarter of firms. In 2008,Evialis Vietnam has achieved ISO 9001 certification.In terms of ownership, more than 35% of foreign firms have separate production lines fordifferent kinds of food (chicken, duck, pork), compared with about 23% of businesses inthe country. However, given the scale, only 14% of large enterprises have separateproduction lines, significantly lower than the rate of 29% in the group of small enterprisesand 22% for medium enterprises.However, this result may also be due to large enterprisestend to produce many types of products than smaller businesses. Research and developmentThe role of research and development is very important in the context of todays businesswith tasks such as developing new products, improving product quality, raw material atthe alternatives to reduce the cost ... to createcompetitive advantage for business. Pictureof the livestock sector in Vietnam today in terms of technical backwardness, limited funds,macroeconomic policies have not stimulated the development of the livestock industry,environmental pollution, rampant disease, as role of R & D is increasingly important forthe development of the business.Picture of the livestock Vietnam today, solutions as well as the ambition of the researchand development department of Evialis $ towards ecological farming model with the useof herbs in animal husbandry to replace antibiotics and additives in animal feed because inthe U.S. there are more than 20,000 species of animals, plants, insects .. shall beconsidered as a medicine. Marketing and communicationAdvice on nutrition and veterinary service are two main businesses feed provided to theagent. In terms of ownership, foreign firms tend to offer two services more than domesticenterprises, but distribution services, transportation not many foreign companies providedby the domestic enterprises.This may be due to two groups of firms with differentcustomers. For customers of foreign enterprises are major dealers and farms, they havetheir own means of transport should therefore foreign firms focused on advisory serviceson pet nutrition and veterinary to them. Page 27
  • 28. Capstone project reportIn conclusion we can see that larger businesses sell their products to larger agents anddealers have their own means of transport. Small businesses are less likely to provideextension materials for agents than medium and large enterprises.Not outside the rules above, Evialis has established two technical advisory center and petnutrition in Dong Nai and Can Tho to support, advise and provide the knowledge andtechnical application of animal new culture for its customers.Besides, the company alsoset up a technical team to organize seminars to advise and disseminate technicalknowledge as well as raising the customer, disease treatment and support if anyborn at thebreeding sites of customers. Information systemInternet is the small and medium enterprises selected as the most important source ofinformation on prices of raw materials, while the majority of large enterprises as suppliersis the most important source for large companieshave good relationships with supplierseasy access to information on the status of raw material prices over the medium and smallcompanies. In terms of price and product market, about a half-scale businesses in theagency considered the most important source, followed by businesses producing animalfeed. For the price of raw materials, Evialis VN support from corporations and affiliatesaround the world to provide the price and information analysis future price trends of rawmaterials. At the same time based on the Groups business relationships and branches ofthe same system in the world, Evialis VN easily get more information about the changes inthe raw materials market. Based on the above factors help for Evialis VN easy solutionsfor strategic purchasing of raw materials.In terms of information on regulations, laws, most businesses considered information fromgovernment agencies is the most important source, especially for large enterprises.Newspapers seem to be more important for small businesses versus large businesses. Anadvantage for Evialis $ in access to information on regulations and laws in the livestocksector is headquartered companys first joint venture with the Institute for LivestockCompany was established LD Guyoamrch - VCN and in the many of whom aremanagement staff of the Institute of Animal Husbandry. Thus the information about therules or the rules of the livestock sector is Evialis VN approach quickly and accurately.Have a common middle-scale enterprises in the role of bank credit as a source ofinformation most important. All businesses in small and large groups as the Internet is thesecond most important source of credit information. Evialis Vietnam is no exception inaccess to credit information.Personal relationships is considered to be the most important source of information aboutthe feed formula. However, small businesses depend on this much-scale enterprises.Vietnam Animal Feed Association is considered the most important provider ofinformation about the feed and this is the second most important source of information forsmall businesses. A large percentage of businesses mentioned their most important sourceof information about the feed is from the parent company, hiring or use their ownknowledge. Evialis VN affiliated company of InVivo NSA (France) should also receiveinformation on formula feeding from the parent company. With the investment of researchquality formula from the branches around the world and experience of the group, the newformula feed is converted to a fast for the whole system in the world to deal withcontinuous variation of the raw materials market. Page 28
  • 29. Capstone project report2.3.2 Analyse value chain of Evialis VN2.3.2.1 Primary activities2. Inbound logisticsInVivo NSA is the leading international experts in the field of pet nutrition and health,always at the forefront of innovation and quality management daily and maintained sincethe operation so far. For Evialis Vietnam too, the quality is not that the benefits and costsis an important factor in the success.For products to better meet the expectations ofcustomers, distributors ...  To ensure the quality and stability of the input, as this is the main ingredient in the product.  Selecting the best input  Ensure ability traceability from supplier until the product is delivered to the market.The quality control of raw materials to be carried out according to the following process:  The first important step is to determine if our suppliers can meet the quality standards of content that we set out in the contract. Once fully tested, we classify suppliers into three levels according to their confidence level (+ + / +, + / -, -), and mainly work with suppliers the first two items.  Assessment of sensory and rational analysis, compliance with our form, rapid test, test samples for analysis in the laboratory (physical, chemical and bacterial), sample storage.  Strict compliance with the sampling process have been identified.  Lots of raw materials put into use only when approved by the quality control department. OperationProduction process of Evialis VN always be tightly controlled:  Check the particle size, smell, color after grinding.  Check the uniformity of mixture of materials.  Monitor and record the votes production of vapor pressure, humidity and temperature in the molding process.  Check the physical surface: bolus stiffness, durability.  Taking samples at different stages of the production process. Page 29
  • 30. Capstone project report  Compliance with stringent regulations sampling the product as regulation.  Storage samples for three months in a library. Outbound logicticsDistribution services, transportation not many foreign companies provide domesticenterprises.This may be due to two groups of firms with different customers. Forcustomers of foreign enterprises are major dealers and farms, they have their own meansof transport should therefore foreign firms focused on advisory services on pet nutritionand veterinary to them.In conclusion we can see that the large-scale enterprises sell their products to majordealers and agents have their own means of transport. Small businesses are less likely toprovide extension materials for agents than medium and large enterprises. Marketing and SalesChannel distributor of Evialis Vietnam is agent system and the farms with 90% ofdistributors and 10% of farms. With the current animal model, the distribution is still themain channel of the feed into the hands of farmers.But in the future, when the smallanimal model transfer to concentrated animal model (model farms), farm market segmentwill increase.Marketing company focused on the organization of workshops with specialists to processlivestock, nutrition process and it is important to introduce the companys products tofarmers. ServicesEnsuring customer satisfaction is an important factor in assessing the success of thebusiness. Therefore Evialis $ tracking system to report customer complaints and takecorrective action and prevent rapid and complete.In addition, advice on nutrition and veterinary service are two main businesses feedprovided to the agent. In terms of ownership, foreign firms tend to offer two services morethan domestic enterprises, but distribution services, transportation not many foreigncompanies provided by the domestic enterprises.This may be due to two groups of firmswith different customers. For customers of foreign enterprises are major dealers and farms,they have their own means of transport should therefore foreign firms focused on advisoryservices on pet nutrition and veterinary to them,.Not outside the rules above, Evialis has established two technical advisory center and petnutrition in Dong Nai and Can Tho to support, advise and provide the knowledge andtechnical application of animal new culture for its customers.Besides, the company alsoset up a technical team to organize seminars to advise and disseminate technicalknowledge as well as raising the customer, disease treatment and support if anyborn at thebreeding location of the customer. Support activities2. ProcurementFeed ingredients in our country mainly corn, wheat slices, soy. However, there are manyfactors affecting the availability of this source for the animal feed industry in the country.Specifically, with corn and bread slices, the area is difficult to expand. As for soy, lowproductivity, no land intensive; winter the area is difficult to expand due to rising rurallabor cost. Page 30
  • 31. Capstone project reportTherefore, over the years, the animal feed industry in our country depends heavily onimports. According to the Department of Animal Husbandry, in 2011, the countryimported approximately 8.9 million tons of animal feed ingredients, increased 3 timescompared to 2006. In particular, the energy-rich foods such as corn, wheat, wheat branwas 3.86 million tons (about 43%); rich foods such as soy protein, dried oil, fish meal,meat and bone meal. .. nearly 5 million tons (about 54%); additional feed about 0.2million tons (3%). In the first eight months of 2012 the country imported 1.1 milliontonnes of maize and 1.8 million tonnes of wheat.Computing the Ministry of Agriculture and Rural Development, to meet livestockdevelopment strategy by 2020, demand for food in Vietnam is estimated at 27.4 milliontons (up 1.3 times higher than in 2012). Thus, with the current capacity to meet, we willhave to import more feed materials, especially energy-rich, such as corn, wheat, oil dry.Procurement of raw materials situation Evialis Vietnam in recent years as follows: 2008 2009 2010 2011import 46.29% 50.04% 49.92% 35.24%local 53.71% 49.96% 50.08% 64.76%According to the figures, we find that by 2010 the rate of domestic procurement of rawmaterials and imports are equivalent. But since 2010 the balance of the procurement ofraw materials tends to increase in the domestic market, this in order to deal with thechanges of the prices of the worlds agricultural markets is increasing, so Evialis $ insteadpolicy purchase your materials by limiting the import of raw materials in the U.S. but stillmeet quality requirements such as corn and wheat slices. However, the difficulty of thispath is the domestic supply is limited and can only meet the needs of the crop. Because ofthis difficulty, should Evialis VN is implementing policies seasonal procurement of rawmaterials and supplies, namely purchasing corn in Dak Lak to buy, buying bread slices inGia LaiMaterial world market, with more and more changes in the world prices of agriculturalproducts, capturing market information is urgent and important to the company. So,Evialis Vietnam has established purchasing group common to plants in the U.S. and linksto the parent company as well as other affiliates around the world to exchange informationin order to plan to buy at the right time. Technology developmentTechnology manufacturing compound feed for livestock or poultry used in the world andin our country in general engineering and manufacturing processes are similar. In ourcountry most of the factories have adopted the method of mixing, so the equipment used in Page 31
  • 32. Capstone project reporttechnology often similar in terms of its structure and operating principle. However,equipment and lines of different manufacturers, have their own characteristics, differenttechnical characteristics.Evialis VN production line use of Vanaarsen C600 and CPM7000, this is the linetechnology is a combination of many different lines, including:- Receiving and processing chain material: metal cup to remove the metal samples and materials. Sieve impurities in order to remove impurities such as: large impurities, straw, fiber-shaped impurities ... to obtain materials of the same nature, to create favorable conditions for the next process.- Dosing and mixing lines: quantitative, for the purpose of determining the extent and dose of the food components, for each type of feed mixture at the rate specified for each type of animal, as ensuring theas possible. Mixing: to stir the ingredients have been mixed into a uniform level to ensure that animals eat enough percentage of the components in the mixture.- Members and processing chain: feed generator is responsible for shaping the mixture after mixing into feed pellets.- Line weight and packaging of finished products: plant products come in two forms: powder and tablets. Mixture after mixing if sent packing soon we will have the product in powder form, if passed through the stages of creating the product we will be tablets. Our products are packed in 25 kg / bag by automatic weighing and bagging.All stages of the production line and equipment is controlled from a central computersystem.With desired product quality is increasingly raising, now Evialis U.S. is investingquantitative balance system automatically Nutricell to ensure ingredients produce accurateand thus ensure the quality of finished products.Besides Evialis VN also trying to reduce production costs by replacing diesel oil-firedboilers husk fired boiler pressure. This change will help companies reduce the cost ofproduction and thus can adjust prices to raise the competitiveness of the company. Human resource managementUp till now, Evialis VN 700 in labor that labor accounts for 81.67% and Female workersaccount for 18.33% and professional workers accounting for more than 70%. The majorityof employees are under 40 years of age, suggesting that human resources of Evialis VN isa team of young workers should be more ambitious and district heat, this will be thefoundation for the future development of the company.Evialis Vietnam is a subsidiary corporation of InVivo NSA, a large group of France andEurope should also attracted many experts around the world such as France, Thailand,Mexico, Philippines. These experts have contributed a lot to the success of the currentEvialis VN.Evialis Vietnam always considers human resources as one of the competitive advantagesof the company should have had a lot of policies to retain and motivate workers to work inorder to contribute to the development of the company.Policies such as: createadvancement opportunities for employees, employee training plan for the locationplanning, accident insurance 24/24, health insurance has beendeployed in Evialis VN. Firm insfrastructureAfter more than 10 years of operation, Evialis VN equip a modern infrastructure with 4factories with modern technology, three research and development centers, two technical Page 32
  • 33. Capstone project reportcenters, two sales locationsRecords, one central laboratory analysis to internationalstandards ... with existing facilities, Evialis Vietnam confident to higher goals in the feedmarket in Vietnam.2.3.3 Internal factor evaluation matrix (IFE) Factors Weights Ratings Weighted ScoresStrenghtsBrand image 0.05 3 0.15Product Quality 0.10 4 0.40Capacity 0.10 4 0.40Customer Loyalty 0.02 3 0.06Qualified Work force 0.04 3 0.12R&D 0.05 3 0.15Multinational company 0.05 3 0.15Customer services 0.05 2 0.10Manufacturing technology 0.15 4 0.60Management 0.05 3 0.15Financial Position 0.10 2 0.20Business experience 0.05 3 0.15WeaknessesMarket Share 0.02 2 0.04Sale policy 0.05 1 0.05Distribution Channel 0.05 2 0.10Alliances 0.02 1 0.02Innovation 0.05 3 0.15 1.00 2.99The total score of 2.99 (compared to the industry average of 2.50) shows that the internalenvironment of Evialis VN is quite well.CHAPTER 3: BUSINESS STRATEGY FORMULATION OFEVIALIS VIỆTNAM IN PERIOD OF 2013-20201.4. The basisses for strategy formulationThe base foundations for building business strategy for Evialis Vietnam in period of 2013to 2020: Based on the macro-economic situation, political-social-law of Vietnam Based on the animal feed industry in Vietnam Based on the orientation of the development of the livestock sector in Vietnam to 2020 Based on the practical situation of Evialis Vietnam Page 33
  • 34. Capstone project report1.4.1. Forecasting of market demand1.4.1.1. Forecasting of animal feed market demand to the year 2020According to the report of general department of livestock, the demand of animal feed willbe going to increase annually and the total of demand would be at 46,607 thousands tonsin year 2020. Source: General Department of LivestockType of feed Unit 2013 2014 2015 2020Percent of % 62,9 65,1 67,3 70,1usingindustry feedIndustry 1.000 tons 36.447 38.240 40.762 46.607feedAnnual % 3,94% 4,92% 6,60% …increasingTable xxx: Forecasting of animal feed market demand to the year 20201.4.1.2. Forecasting revenue of Evialis Việtnam to the year 2020Over the past five years since 2007, the revenue of Evialis Vietnam been being grownsignificantly. Source: Evialis ViệtnamYear 2007 2008 2009 2010 2011(Sequence (1) (2) (3) (4) (5)number)Revenue(Million 684.244 1.079.032 1.444.428 1.717.211 2.055.868VNĐ)Annualincreasing N/A 58% 33,9% 18,9% 19,8%percentageTable xxx: The revenue of Evialis Vietnam in last five yearsData revenue of the Evialis Vietnam continued to increase over the years, so we will usethe linear prediction method to forecast revenue of the Evialis Vietnam by 2020 asfollows:Linear equations: y = a.x + bWhere: Page 34
  • 35. Capstone project report - Y : revenue of the year x - x : sequence number of the years (since 2007, x = 1) - a and b are constant of linear equations. Figure xxx : Revenue curve (reality and trend)Based on actual sales data from 2007 to 2011 (x = 1,2,3,4,5) we determine the trend linewith the following equation:y = 338143x + 381729From this equation we can provide revenue forecasts for Evialis Vietnam to the year 2020as follows, with x being the number of the next year (2012, x = 6) to 2020 (x = 14)Year 2012 2013 2014 2015 2016 2017 2018 2019 2020(sequence, x) (6) (7) (8) (9) (10) (11) (12) (13) (14)Revenue(Billion 2.410 2.748 3.086 3.425 3.763 4.101 4.439 4.777 5.115VNĐ)Table xxx: Forecast revenue of Evialis Việtnam to the year 2020 (Billion VNĐ) Page 35
  • 36. Capstone project reportFigure xxx:Forecast revenue trend line of Evialis Việtnam to the year 2020 (Billion VNĐ)1.4.2. Vision, missions and objectives of Evialis VietnamVisionEvialis Vietnam towards to the Top 3 position of the leading companies in the field ofanimal nutrition and health in Vietnam.MissionsEvialis Vietnam strict compliance at all levels and areas of operation, from choosingsuppliers to strictly comply with the standards in the production process, inspection offinished products and ensure full traceability sourcebase in order to ensure the quality offeed and food safety.Objectives of Evialis Vietnam to the year 2020Business objectives of Evialis Vietnam is set based on the study and analyzes the state ofthe environment and determination to implement comprehensive solutions by managementof company. - Analysis of the companys operating environment in the animal feed industry to determine the internal strengths and weaknesses, and external opportunities and threats from the external environment are mentioned in chapter 2. - Forecast the needs of the market and the companys revenue forecasts to 2020 are described in section 3.1.1 - The commitment of leaders, and all employees of the company Evialis Vietnam. - Combination of the solutions is presented in below section 3.4Objectives of Evialis Vietnam: Unit: Billion VNĐYear 2012 2013 2014 2015 2016 2017 2018 2019 2020 Page 36
  • 37. Capstone project reportRevenue 2.410 2.748 3.086 3.425 3.763 4.101 4.439 4.777 5.115Profit 96 110 123 137 151 164 178 191 205after taxTable xxx: Revenue and profit indicators of the company Evialis Vietnam to the year 2020Revenue growth rate is expected to increase in the range of 7% -17% / year, and net profitis projected to be 4% of the annual turnover equal to the after-tax profits average of lastfive years.1.5. SWOT analysis and strategy orientationThe strategic direction for the company Evialis Vietnam will be based on the analysis ofinternal strengths and weaknesses of the company along with the opportunities and threatsof the external environment, this is the basis for the company overview of the basicstrategies that companies can turn to. Opportunities (O) Threats (T) 1. The average population 1. Macroeconomic growth of 1% / year instability 2. Average annual GDP 2. The varying on feed growth of 5-6% / year safety standards 3. Per capita income being 3. The complication of increased disease and weather- 4. Livestock feed demand climate is expected to grow 5- 4. Many competitors 7% / year 5. Many new companies SWOT Analysis 5. Livstock feed industry entrance the industry development 6. Customers have more 6. Livestock feed choices production technology 7. Customers are sensitive development to price 7. State policies to support 8. High competition in the the development of market livestock and feed production 9. Dependence on imported raw materials 10. Vietnam still can not produce premixStrengths (S) Group of strategies based Group of strategies to on the Strengths (S) and leverage the Strengths (S)1. Multinational company Opportunities (O) to overcome the Threats2. Strong brand (T) 1. Combination of Page 37
  • 38. Capstone project report3. Product quality (S1,S2,S3,S5,S6,S7,S8, 1. Combination of (European standard, S10,S11,S12) and (S1,S4,S5,S6,S7,S8,S9,S France) (O1,O2,O3,O4) => 10) and4. Production technology Market development (T2,T3,T4,T5,T6,T7,T8) strategy5. Production Capacity => Product 2. Combination of diversification strategy6. Financial capacity (S1,S4,S6,S7,S9,S10,7. Governance capacity S11) and (O4,O5,O6,O7) => Differentiation8. Operational experience strategy9. Research and Development10. Strong human resources11. Customer Service12. Customer loyaltyWeakness (W) Group of strategies to overcome the weakness1. Market share Group of strategies to take and limit the threats advantages of2. Distribution channel Opportunities (O) to 1. Combination of3. Sales poilicies improve the weakness (W) (W1,W2,W3) and4. Lack of alliance (T1,T2,T3,T4,T5,T6,T7, 1. Combination of T8) => Market5. Innovation (W1,W2,W3,W4) and development strategy (O1,O2,O3,O4,O5) => Forward integration 2. Combination of strategy (W4,W5) and (T9,T10) => Backward integration strategyThrough the above analysis we have a number of strategic orientationsNo. Strategy The meaning of strategy to the company 1 Market development strategy Expand the market to take advantage of the developing livestock feed manufacturing industry and growing of feed demand which contribute to the growth of the company. 2 Differentiation strategy Differentiation in order to bring the companys competitive advantage in the market, to ensure the sustainable growth of the company in the future. 3 Product diversification strategy Diversification of products to meet the different needs of customers, which can expand the number of customer sectors Page 38
  • 39. Capstone project report to grow revenue of the company. 4 Forward integration strategy Forward integration strategy is to help businesses to occupy market quickly by strengthening the power of distribution system, to create strong links with the target customer. 5 Backward integration strategy Backwards integration strategy is to help businesses to get more active in the supply of raw materials, ensure the stability of production, reduce production costs in order to create competitive advantage.1.6. Analysis QSPM and propose strategyAnalysis Quantitative Strategic Planning Matrix (QSPM) to figure out the strategy withthe highest total attractions from which to recommend the most appropriate strategy forthe business.Major factors Class Strategy Strategy Strategy Strategy Strategy 5 -ify 1 2 3 4Internal factors AS AST AS AST AS AST AS AST AS ASTMultinational 3 13 4 3 12 4 16 3 12 4 16companyStrong brand 3 4 12 2 12 3 9 4 12 4 12Product quality 4 4 16 4 16 4 16 4 16 3 12Production 2 8 4 2 8 4 16 4 16 3 12technologyProduction capacity 4 4 16 3 12 3 12 2 18 2 8Financial capacity 4 3 12 4 16 3 12 4 16 4 16Governance capacity 3 3 9 3 9 3 9 3 9 3 9Operational 2 6 3 3 9 2 6 2 6 2 6experienceInovation 3 2 6 3 9 3 9 2 6 2 6R&D 4 4 8 4 16 3 12 2 8 2 8Strong human 2 8 4 3 12 4 16 3 12 2 8resourceCustomer service 4 3 12 4 16 4 16 3 12 2 8Customer loyalty 3 3 9 3 9 3 9 3 9 3 9Market share 2 2 4 2 4 2 4 2 4 2 4 Page 39
  • 40. Capstone project reportDistribution channel 2 2 4 2 4 2 4 2 4 2 4Sales policy 1 1 1 1 1 1 1 1 1 1 1Alliance 1 1 1 1 1 1 1 2 2 2 2External factorsThe average 3 9population growth of 3 3 9 2 6 3 9 2 61% / yearAverage annual GDP 3 9 3 3 9 2 6 3 9 2 6growth of 5-6% / yearPer capita income 3 9 3 3 9 2 6 3 9 2 6being increasedLivestock feed 3 12demand is expected 4 4 16 3 12 3 12 2 8to grow 5-7% / yearLivstock feed 3 12 4 3 12 3 12 3 12 3 12industry developmentLivestock feed 2 6production 3 2 6 4 12 3 9 2 6technologydevelopmentState policies to 3 12support thedevelopment of 4 3 12 3 12 3 12 3 12livestock and feedproductionMacroeconomic 2 4 2 2 4 2 4 2 4 2 4instabilityThe varying on feed 3 6 2 3 6 3 6 3 6 3 6safety standardsThe complication of 2 2disease and weather- 1 2 2 2 2 3 3 3 3climateMany competitors 1 2 2 3 3 3 3 3 3 3 3Many new companies 4 4 1 2 2 4 4 3 3 3 3entrance the industryCustomers have more 2 2 1 2 2 3 3 4 4 2 2choicesCustomers are 3 3 1 2 2 2 2 4 4 3 3sensitive to priceHigh competition in 1 2 2 3 3 3 3 3 3 3 3 Page 40
  • 41. Capstone project reportthe marketDependence on 2 4imported raw 2 2 4 2 4 2 4 4 8materialsVietnam still can not 2 4 2 2 4 2 4 2 4 4 8produce premixTotal of Attraction 254 280 270 245 240ScoresClassify score obtains from EFE matrix and IFE matrix; Attraction Score (AS): 1 = mostweakness, 2 = weakness, 3 = strong, 4 = strongest.Response of company to external factors: 1 = weakness, 2 = medium, 3 = above medium,4 = High.Classify of internal factors: 1 = most weakness, 2 = weakness, 3 = strong, 4 = strongest.Conclusion: Differentiation strategy and product diversification strategy with the highesttotal score is reported to be 280 points (differentiation) and 270 points (productdiversification). Therefore, we propose the company prevail both strategies in the nearfuture in order to increase competitiveness in the market. In addition, companies shouldincorporate strategies such as: market development strategy, forward integration strategyand backward integration strategy in the specific conditions of the company to ensureappropriate sustainable development in the future.Differentiation strategyEvialis Vietnam is belong to InVivo NSA group that has long years operational experiencein nutrition and animal health, a team of personnel specialized deep understanding oftechnology and engineering together with the system of R & D, international standardlaboratory which is the priceless value that Evialis Vietnam can take advantage to createhigh-quality products at reasonable cost, bringing high value to customers. Besides,Evialis Vietnam to apply advanced technologies are factors that help company to createstable quality products, and high reliability are guaranteed. These are the factors that helpcompany create products with high value differences, enhance the attractiveness andcredibility with customers, is the basis for customer loyalty for the companys products .Also Evialis Vietnam with a team of professional customer service and standard veterinaryservices provide value-added chain for customers, make a difference compared to othercompetitors in the market. To ensure sustainability, the company should seriouslycontinue to invest in research R & D, taking advantage of the group and constantlyimprove the value of products and services, link multiple activities bring added value tocustomers.Products diversification strategy Page 41
  • 42. Capstone project reportBy using inner strength of the Evialis Vietnam as well as InVivo NSA group to createmore different types of products to meet the diverse needs of customers and limit the risksdue to natural conditionsnature and cause disease as well as increasing competition in themarket. Besides, the trend of peoples meat consumption is likely to change in thedirection from pork to other meats such as chicken, beef, seafood, leading to consumptionof pork decreased which is a factor affect to the demand of pig feed products. Therefore,the product diversification strategy is not only producing variety of products for pig feed,but also to invest in the production of feed for poultry, aquiculture and cow, etc…Market development strategyBased on the capacity of the company and based on the forecast growth of the feedindustry and the demand for animal feed increased as a basis for market developmentstrategy. In addition, under the pressure of competition and the potential risk fromcompetitors is why company need to develop and expand the market.Market development strategy will primarily by expanding the distribution system, buildingmore regional entrepot at erea that plant is not available and expand the market for newareas; beside the domestic market company need to develop the overseas marketespecially the Indochinese countries has the potential to develop the livestock sector.Forward integration strategyCurrent market share of Evialis is not large compared to other foreign corporations inVietnam market, the distribution system is still limited while the big potential market sothe expansion of the distribution system is essential and dominate the market areconsidered important factors to help company develop sustainability. Forward integrationcan be considered fast strategy to increase market share for company in the future, toensure the development of the company in an increasingly competitive environment.Backward integration strategyInputs of production is very important for any industry, while the animal feed industry inVietnam is dependent largely imported materials and foreign pemix. To ensure theproduction activities of the company Evialis Vietnam should be closely associated withthe supply of raw materials and taking advantage of the InVivo NSA group for premixproduction in Vietnam. By investing for premix production is considered as backwardintegration strategy in the coming years of the Evialis Vietnam, ensure raw materials foranimal feed production for the company and at the same time open up new strategybusiness units in Vietnam market.1.7. Implementing solutions1.7.1. Setting up value chain for Evialis ViệtnamDevelopment trend of the worlds livestock sector is involved in the general operation ofthe production chain from farm to table food and is divided into three main segments:Animal feed (Feed) –Farm (Breeder and Live Animal) - Food (Fresh Meat and Food & Page 42
  • 43. Capstone project reportReady Meal), and finally is developing a global brand to deliver the final product to theconsumer.Not out of this trend, Evialis Vietnam to determine the importance of cooperation withpotential partners to establish a closed value chain to provide consumers with good qualityproducts and ensure the high security standards of food hygiene and safety.To make this a closed chain, we propose Evialis Vietnam gradually implement in twostages: The period of 2013-2015: Continues to focus on animal feed which is a strength of Evialis, and steps involve in the farm segment by working with the breeding production company, and links with other slaughtering firm in the segment of food production to create output channel for its farm customers. The main activities of this phase include: For the livestock feed segment (Feed) - Produce premix for Evialis and Vietnam market, and this is considered as backward integration strategy of the company in the production of materials for the feed industry. - Diversify feed product - Continued investment in R & D - To raise the value of the livestock advisory services, customer care and veterinary - Development of distribution network and market expansion For the farm segment (Farm) - Cooperation with companies producing breed, and through this channels of cooperation the company can develop the customer of farm and is considered as a forward integration strategy of the company in the future. Page 43
  • 44. Capstone project report For the food segment (Food) - Implementation associated with the slaughter of cattle and poultry (Processing) to create output for farm customers, create trust for customers peace of mind to focus in livestock production and continue to stick with the company. The period of 2016 - 2020: Gradually deeper cooperation in the field of farm (Farm), the livestock segment (farming), and food sector (Food) in the production of finished products segment (Food & Ready Meal) is regarded as segments of value creating in the chain link of the food industry.By participating in a closed chain of food production Evialis will take steps to make adifference in the market, ensure stable business operations and sustainable development inthe future.1.7.2. Propose solutions for Evialis Việtnam1.7.2.1. Marketing solutionsDevelop product brandsProduct diversification strategy to meet the diverse needs of our customers, at the sametime to overcome the natural risk factors and disease. Therefore, the development of thebrand not only in the construction of the brand but also the creation of new products forlivestock, poultry and aquaculture.The brands of products and services will be focused on developingFor the animal feed - Animal feed - Animal feedFor poultry feed - Feed for chicken - Feed for duck - Feed for quail Page 44
  • 45. Capstone project reportFor aquaculture feed - Aqualcuture feed - Started feed for fingerling fishFor each product brand Avialis need to offer high quality and stability product lines toconfirm the consumer confidence for the companys products; since that would ensure thereturn at above average of industry through the reasonably price policy according to thehigh quality standard of the product.Develop distribution channelsDistribution systems play a vital role in occupying the market and business developmentso development of distribution systems is an important task of Evialis in the future;distribution system should set development include: - Entrepot system, for areas without plants, the storage system will shorten the delivery time to the companys dealer system and save shipping costs for agents. - The level I agents are the companys large customers and offering to secondary agents, farms and farmers. This is an important distribution systems which contributed 90% of revenue for the company, so Evialis will continue to care and development of level I agent system seriously. - Level II agents, this is the client of the level I agent system and may also be developed and monitored by company.This distribution system is usually located in the district or commune, and agents to sell directly to farmers. To ensure sustainable development, level II agent system needs to be supported and developed in number to dominate the market. - Farming is the trend nowadays and in the future in Vietnam, so company need to pay serious attention to develop closely concerns with this kind of customer.Building linkage in value chain of Feed-Farm-FoodFor the livestock feed manufacturing (Feed) - Establish premix production and business units based on the resources and experience of the InVivo NSA group - Incorporate with InVivo NSA group in establishing a relationship with material resources in the world, to ensure supply of good quality raw materials. - Build relationships with the purchasing firm of raw materials base in the country, to ensure a stable supply. Page 45
  • 46. Capstone project reportFor the farming sector (Farm) - Investment in companies producing seed, and this is the basis for establishing customer relationship with farms. - Consulting farming techniques and providing veterinary care for livestock farms. - Introduce to the farms and inviduals the systems of animal product consuption which is established by Evialis. - Gradually building the outsourcing farm systemsFor the food segment (Food) - Associated with cattle and poultry slaughtering in the consumption of livestock products. - Associated with the consumption of meat products and food processing facilities. - Gradually building the facility systems of meat and food processing.Develop communication programsOrganizing the events - Organization of Livestock technical training - Organize technical training veterinary care - Organized a workshop on the disease situations and prevention - Introduce featured Products and raising skills to farm customers - Introduce featured Products and sales skills training for agency clientsImplementation of the grant program - Financial support for the livestock contests - Financial support for the livestock communities - Funding for the training of agricultural and veterinaryImplementation of social and charity programs - Support sow for small and medium scale individual farms - Supporting seed for small farmers - Integrated implementation of programs for out of poverty for the farmer with animal seedsImplementation of advertising programs - Advertising in magazines specializing in the agricultural sector, agricultural extension and livestock Page 46
  • 47. Capstone project report - Advertising on local television channels, especially in conjunction with the report on rural agriculture, agricultural extension and animal husbandry. - Advertising on outdoor signboards and signboards for the agents, signboards in the center of agriculture extension and veterinary service center, etc... Human Resource SolutionsHuman resources plays an important role for the development of business, so toimplement the above strategies the company should focus on developing appropriatehuman resources to achieve the goals, and make protection for the sustainabledevelopment of enterprises. The basic solutions to human resource development,including:Detecting and attracting talents - Detecting the well talented and capable people in the company, and to have appropriate incentive policies to retain talent. - Links with other training organizations, headhunters center to find high-quality human resources. - Policies for cultivating talents by offering scholarships to outstanding students, funding for scientific research. - Developing policies to attracting and training talents, enabling talents to contribute to the development of the company.Training and enhance knowledge to staffs - Comprehensive training strategy for the company to increase capacity and improve productivity. - Improve management ability for leaders and managers, training for potential personnels to create sources of potential managers for the company. - Training of specialized knowledge for specific tasks, especially the R & D. - Communication skills training, professional work - Policies for training and development of personnel to ensure a potential high- quality human resources legacy for the future. - Links with other training institutions in the country and abroad, should pay attention to take advantage of existing training resources of the group InVivo NSA. - Training a team of experts and engineers to develop superior quality products, comprehensive services and be able to cope with the change can occur.Develop incentive policies to encourage employees - To assess the capacity of workers by KPI - Develop appropriate reward and encourage mode and timely Page 47
  • 48. Capstone project report - Mounting the results of the labor with income of employees, with specific targets and hot reward timely to motivate employees to work more efficiently. - There are special policies for talent, and create conditions for capable people dedicated the most to the company.Recruit and develop personnels in accordance with the companys strategy and objectivesin specific stages to ensure human resources for the development of the company in thefuture. Financial solutionsEvialis Vietnam is a subsidiary of InVivo NSA group which has strong financialresources, business efficiency and prestige in the world; while Evialis Vietnam has morethan 15 years of operating in Vietnam gradually branding, reputing and also has generateda good financial amount for development of the company. Financial resources to serve thecompanys strategies in the near future include: - Investment from InVivo NSA group - Financing itself of the Evialis Vietnam - Borrowings from domestic banks, and foreign banks through InVivo NSA group - Accounts payable to suppliers due to be deferred - Amounts received advance by the paid of agencies.In each specific period the company can use different financial sources, depending on thefinancial plan to use, and the interest rate at the time of need funded. For long-terminvestments, the company will prioritize to use of their own capital or foreign loans withlow interest rates; with interest rate conditions in Vietnam today, the company only to usefinancing from domestic banks when absolutely necessary and only for short-term loans. Production and Operation SolutionsInput materialsInput materials imported mainly accounted for 70% and 30% are in the country. In termsof the supply price fluctuations due to weather and price changes, to ensure a stable sourceof inputs and production the company need to consider the application of the followingmeasures: - Associated with InVivo NSA group in searching supply in the world, buying in bulk at low prices. - With a large demand and stability of the whole group InVivo NSA will be the basis for stable output commitments to suppliers, to facilitate the establishment of long- term stable relationships with materials suppliers. - For the supply in Vietnam, Evialis need to have a strategy to associate with farms and people to build the high-quality and stable material sources. Page 48
  • 49. Capstone project report - Evialis will invest to produce premix in Vietnam under the comprehensive support of the group InVivo NSA, this is the solution to reduce the cost of premix for production of feeds and also a strategy of premix business in Vietnam market to increase revenue for the company. - Develop standard storage system for storage of materials in the case of external supply shortages or price increases. - To examine closely in order to ensure a standard quality raw material as needed, refuse and remove unsatisfactory material.Productions - Plan production based on orders and demand forecasts in the future in order to ensure product supply to meet market demand. - To maximize the production capacity of the plant, rapid depreciation of the value of investment to replace factory with new technology at more effective - To encourage the study of the solutions to improve productivity, labor productivity, machinery and equipment improvements to reduce production costs. - Organization of continuous production lines, avoid waste and reduce losses at the lowest level to create products at the smallest possible cost.Innovation science and technology - Update science and advanced manufacturing technology in the world, engaged in scientific associations of feed production technology to capture new trends develop in the future. - Research formula feed processing based on different raw materials while maintaining product quality, creating superior quality products at the lowest cost. - Improved machinery with new technology to create a competitive advantage in product quality, and reduce production costs. - Investment in research and development; trained team of experts, engineers and veterinarians grasp the new technology to be able to process operation and maintenance of machinery and equipment in a mature, capable of process improvement in order to improve performance.Qualily management - Apply thorough quality control processes throughout the research process and production to ensure high quality product and uniformity. - Application of ISO 9001 quality management processes and Global GAP for all business activities of enterprises. - Application of ISO 22000 food safety management process - Application of ISO 17025 quality management process for the laboratory to ensure all testing activities, evaluate with high accuracy and consistency. Page 49
  • 50. Capstone project report - Application of advanced management tools: 5S, Kaizen, manufacturing process control using statistical techniques SPC (Statistical Process Control), failure analysis and FMEA (Failure Mode and Effect Analysis). - All work processes are evaluated and improved every year by the prestigious organization providing the certification, and has the support of the group InVivo NSA.1.8. SuggestionsFor goverment - Should be well-organized inspection supervision of smuggled animal products to protect stable domestic livestock development. - There should be policies and organizations for centralize breeding roadmap to be able to manage disease problems, creating safty high-quality livestock products and environmental protection. - Regional planning of raw materials is needed for animal husbandry and feed industry to ensure domestic supplies, reduce dependence on supplies imported from abroad. - The evolution of agriculture in general and livestock and food production in particular a specific way to ensure national food security, competitiveness with other countries in the region and the world.For industries - Should be an association of feed manufacturers, and associated with livestock and food production association to create a comprehensive value chain include Feed- Farm-Food, to promote the developments of all industries systematically and sustainably.CONCLUSIONDevelop business strategies is an important job that is vital for any business, is the methodof determining the direction of the business as appropriate for each stage of development;resource utilization of management and especially creating enterprises competitiveadvantage in the market for sustainable development. In terms of the rapidly changing ofeconomic environment today, the strategy now becomes necessary to adapt to changes inexternal factors to limit the risk to the business, and quickly takes the opportunity todominate the market.On the basis of analyzing the factors within the enterprise and the external factors areeconomic environment, political and social we identify the strengths and weaknesses ofthe business and the opportunities and challenges of economic environment; so thatanalysis the ability to exploit and overcome these factors. This is also the basis for thestrategic direction for the business in the period of 2013-2020 as follows: - Differencetiation strategy Page 50
  • 51. Capstone project report - Product diversification strategy - Market development strategy - Forward integration strategy - Backward integration strategyThrough result of analysis QSPM show that enterprises should prioritize to implement thestrategies on the order with the highest priority is differentiation strategy based on thestrength of Evialis capacity with the support of the group InVivo NSA; however toensure the sustainable development of the enterprises need to combine all of the abovestrategies to create a strong position in the market. However, in the process ofimplementing the company to regularly monitor, inspect, evaluate and adjust to suit thespecific conditions of the enterprise as well as the change of environment.Thanks to the knowledge of GaMBA program of Griggs University, and with the effortsof the groups research on this project, and the support of company Evialis Vietnam westrongly propose oriented trategies for the company Evialis Vietnam in this article; and webelieve these oriented strategies will contribute to enhance the companys position in themarket and sustainable development in the future. However, we are always lookingforward to receiving comments from teachers and GaMBA program to complete article isthe most practical and meaningful. Page 51
  • 52. Capstone project reportREFERENCES - Competitive Advantage – Michael E.Porter, Nxb Trẻ 2012 - Competitive Strategy – Michael E.Porter, Nxb Trẻ 2012 - Concepts of strategic management – Fred R.David, Nxb Thống kê 1995 - Strategy maps – Robert S.Kaplan & David P.Norton, Nxb Trẻ 2011 - Website of Evialis Việtnam , - Website of CP Việtnam, - Website of Cargill, - Website of Proconco, - Website of ANT Vietnam, - Website of Vina feed, - Market share of animal feed: Foreign investor embracing, tron/45/8125423.epi - Domestic manufactur of animal feed – need synchronous solutions, - Overview of animal feed market, trong-nuoc/Toan-canh-thi-truong-thuc-an-chan-nuoi.html - Adversity animal feed market belong to FDI, canh-thi-truong-thuc-an-gia-suc-thuoc-ve-doanh-nghiep-fdi- 20111123112037991ca52.chn - Livestock development oritentation in period 2006-2015, tailNews&num=15&TabID=1&NewsID=94 - Animal feed and material market of 9 months of 2012 and, nam.gplist.343.gpopen.206463.gpside.1.gpnewtitle.thi-truong-thuc-an-chan-nuoi- va-nguyen-lieu-9-thang-dau-nam-2012-va-du.asmx - The use of rice in the production of animal feed, TACN.aspx - Premix is the “machine” of animal feed industry, nload&gid=739&Itemid=146 Page 52
  • 53. Capstone project reportAPPENDICES1. List of Appreciations Appreciation Full descriptions GDP Gross Domestic Product R&D Research and Development FDI Foreign Direct Investment WTO World Trade Organization SWOT Strengths Weekness Opportunities Threats QSPM Quantitive Strategic Planning Matrix SPC Statistical Process Control FMEA Failure Mode and Effect Analysis IFE Internal Factors Evaluation EFE External Factors Evaluation CPM Competitive Profile Matrix2. List of tables No. Table number Descriptions Page3. List of figures and charts No. Figure number Decriptions Page4. Livestock production development to the year 2020 Page 53
  • 54. Capstone project report TABLE OF CONTENTSFOREWORDS.......................................................................................................................2CHƯƠNG 1: THEORETICAL BASIC OF BUSINESS STRATEGYError! Bookmarknot defined. 1.1. The concept of business strategy and the role of business strategy ...........................3 1.1.1. The concept of strategy and business strategy ....................................................3 1.1.2. The role of business strategy ...............................................................................3 1.1.3. Requirements for construction and implementation of business strategy...........4 1.2. The process of business strategy formulation ............................................................4 1.2.1. Step 01: Analyze external environments.............................................................5 1.2.2. Step 02: Internal environment analysis ...............................................................7 1.2.3. Step 03: Determine missions and objectives .......................................................8 1.2.4. Step 04: Formation strategies of business ...........................................................9 1.2.5. Step 05: Selecting optimal strategies.................................................................10 1.3. The levels of strategy management and type of strategies .......................................10 1.3.1. Corporate level strategy.....................................................................................10 1.3.2. Business units level strategy..............................................................................11 1.3.3. Funtional units level strategy.............................................................................11CHƯƠNG 2: ANALYSIS BUSINESS OPERATION OF EVIALIS VIETNAM ANDECONOMIC ENVIRONMENTS .......................................Error! Bookmark not defined. 2.1. Thực trạng hoạt động kinh doanh của công ty Evialis ViệtnamError! Bookmark not defined. 2.1.1. Giới thiệu về công ty Evialis Việtnam ..............Error! Bookmark not defined. 2.1.2. Kết quả hoạt động sản xuất kinh doanh ............Error! Bookmark not defined. 2.1.3. Đánh giá thực trạng của công ty........................Error! Bookmark not defined. 2.2. Phân tích ảnh hưởng của môi trường bên ngoài.......Error! Bookmark not defined. 2.2.1. Môi trường vĩ mô ...............................................Error! Bookmark not defined. 2.2.2. Môi trường vi mô...............................................Error! Bookmark not defined. 2.2.3. Ma trận đánh giá môi trường bên ngoài (EFE) .Error! Bookmark not defined. 2.2.4. Ma trận hình ảnh cạnh tranh (CPM)..................Error! Bookmark not defined. 2.3. Phân tích môi trường bên trong của công ty ............Error! Bookmark not defined. 2.3.1. Môi trường bên trong của công ty .....................Error! Bookmark not defined. 2.3.2. Ma trận đánh giá môi trường bên trong (IFE) ...Error! Bookmark not defined.CHƯƠNG 3: BUSINESS STRATEGY FORMULATION OF EVIALIS VIỆTNAM INPERIOD OF 2013-2020 ......................................................................................................17 3.1. The basisses for strategy formulation.......................................................................33 Page 54
  • 55. Capstone project report 3.1.1. Forecasting of market demand ..........................................................................34 3.1.2. Vision, missions and objectives of Evialis Vietnam .........................................36 3.2. SWOT analysis and strategy orientation ..................................................................37 3.3. Analysis QSPM and propose strategy ......................................................................39 3.4. Implementing solutions ............................................................................................42 3.4.1. Setting up value chain for Evialis Việtnam.......................................................42 3.4.2. Propose solutions for Evialis Việtnam ..............................................................44 3.5. Suggestions ...............................................................................................................50CONCLUSION ...................................................................................................................50REFERENCES ....................................................................................................................52APPENDICES .....................................................................................................................53 Page 55