The capstone project by Group 6 analyzes the business environment and strategic formulation for VNF1 JSC, a rice production company, from 2010 to 2015. The document details a thorough SWOT analysis, market segmentation, and strategic objectives focused on enhancing VNF1's brand in high-quality rice distribution. Key recommendations include adopting differentiation strategies, improving production management, and strengthening distribution channels to achieve market leadership.

1. CAPSTONE PROJECT
GROUP 6, xxx, GRIGGS MBA PROGRAM
HANOI, APRIL 2010
BUSINESS STRATEGY FORMULATION
FOR VNF1 JSC
DURATION 2010-2015

2. GROUP 6 RESOURCES ALLOCATION
1. Nguyễn Xuân Hồng - Q&A
2. Bùi Tú Giang - data, write up
3. Cao Thị Hạnh - theory
4. Nguyễn Thị Minh Thu - presentation

3. HIGHLIGHTS
1. Objectives of the study
2. Overview of VNF1 JSC
3. Analysis of marco - micro- internal
environment level
4. SWOT analysis
5. Strategy formulation
6. Solutions on functional strategies
7. Milestones in strategy implementation
8. Conslusion
PRESENTATION TIME: 15 MINUTES

4. OBJECTIVES
 In-depth analysis of business environment of VNF1:
 To propose a 5 year business strategy to VNF1 JSC
 Best practices of Griggs MBA knowledge

5. OVERVIEW OF VNF1 JSC
 Established in 2008:
 VNF1: young company in rice production industry
 Member of Vietnam Northern Food Corporation (VNF1 Corporation)
 Expected to be a modern business model for the Corporation +
 Food security for Northern provinces
 Long term vision:
 A modern and professional distributor-retailer;
 Established VNF1 Corporation brand name

6. ANALYSIS OF MACRO ENVIRONMENT
LAW
LAW
CULTURE-
CULTURE- ECONOMY
ECONOMY
SOCIETY
SOCIETY
MACRO FACTORS
MACRO FACTORS
(PESTLE MODEL)
(PESTLE MODEL)
POLITIC
POLITIC ENVIR.
ENVIR.
TECHNOLOGY
TECHNOLOGY
(Campell & Craig, 2005)

7. ANALYSIS OF MACRO ENVIRONMENT
POLITIC-LEGAL
 Stable political and legal environment.
 The Government support:
 Promote distribution system development
 Promote participation of various economic sectors
 Favorable credit program, tax reduction
 However, the government has not yet a master plan for rice as a
strategic national industry.

8. ANALYSIS OF MACRO ENVIRONMENT
ECONOMY
 One of the fastest growing economies : Average GDP growth: 7.2%
 In Asia:
 One of the few with positive economic growth
 Third quickest economic recovery
 Open market: more import commodities,
 ADB: no economic efficiency, no inflation control. (Apr, 2010)

9. ANALYSIS OF MACRO ENVIRONMENT
TECHNOLOGY
 In production and processing,
 In post harvest: better value and diversity of products
 Impacts in the way of delivery, distribution, payment
 However, high tech in agriculture: expensive.

10. ANALYSIS OF MACRO ENVIRONMENT
CULTURE-SOCIETY
 Rice is essential for generation.
 Habits in rice production and consumption have not recognized the value of
quality standard in rice
 Unpacked rice selling is dominating 86%
 Young population: 70% under 30
 Widening gap of social classes: 10% with higher income
 Modern Hanoi residential areas growth:
Source: CB Richard Ellis, 2010

11. ANALYSIS OF MACRO ENVIRONMENT
 TREND OF GLOBALIZATION
 Vietnam:
 Penetration of Big C, Metro, Loteria,…
 Retail market: 17% growth/ year
 Total retail market revenue:
– $40 billion (2007)
– $53 billion (2010f)
 Thailand:
 traditional distribution system: 95% (1990)
 2010 is expected to see the reverse
Figure 2.9. Vietnam rising in the list of most
attractive market for US retailers.
(Source: A.T. Kearney)

12. SECTOR ANALYSIS
POTENTIAL
COMPETITORS:
Foreign,
technological
progress
POWER OF CUSTOMER:
CURRENT COMPETITORS: Habit, less knowledge,
VNF1 companies, after sales demand
Experienced privates with
POWER OF SUPPLIERS: Flexible mechanism
Local strength,
Not ready for new standards
SUBSTITUTIONS:
non rice
western food;
Diversity in gains
intakes
5 forces of competition, M. Porter 1980

13. Competitors in high-quality rice market
No Criteria VNF1 Competitors
A B C
Hapro Metro Bảo Minh
1 Cost High High Medium Medium
2 Price High High Medium High
4 HR quality Medium Medium High Medium
5 Market share 2% 5% 7% 10%
6 Brand yes yes yes no
7 Relevant High Medium Medium Medium
experience
8 Standard High Low Low Medium
production system (HACCP)
3 Financial source High Medium Very high Medium
9 Post sales services High Medium Medium Medium
Table 2.1. Comparison of some competitors in high-quality rice market (Source: VNF1)

14. Competitors in high-quality rice market
 VNF1 positioning in high quality rice market
QUALITY,
SAFETY LEVEL
VNF1
Yamad
Bao a
Hapro Minh
ĐÔNG
BẮC
GENERAL
RETAILER
S PRICE

15. INTERNAL ENVIRONMENT ANALYSIS
 Porter’s Model of Value Chain

16. INTERNAL ENVIRONMENT ANALYSIS
 Support activities:
 HRM: Proper structure, experienced leaders, young staff, learning
organization
 Product and technology development: exploitation of 5 levels of
products, good cooperation of “5 partners”
 Accounting & finance: not active enough to report and consult
 Primary activities:
 Operation: established quality control standards, good planning of
material areas, supplier management, wide business network
 Marketing & sales: customers database, market intelligence, website
 However: no long term planning, synergy among functions.

17. SWOT ANALYSIS
S O
- Experienced leaders in the industry - Clean food is a big concern
- Healthy corporate culture - Improved living standard, urbanization
- Wide business network - Modern shopping style
- Strong control of original material areas - Not yet a company with special attention to
- Advantage of business locations. clean rice business + modern distribution.
- Distribution is a focus of the Government.
- Rice: essential food with more diversified
recipes
W T
- HR to cover quality control, marketing, - Habit of buying unpacked rice in “open”
and wide distribution system markets
- In-completed compensation system. - Consumers ok with unidentified quality
- Not proper software application to standards
manage distribution system and customer - Economic crisis.
feedback - Small ratio of return on investment in rice
- Not well known brand name products business.
- Unexpected changes in climate.

18. ANALYSIS OF MARKET SEGMENT
 High class rice for high income people.
 Initial area: Hanoi, then Northern expand.
 The segment is attractive in size and competitiveness.
 Orientation: “High quality, safety and convenience”.
(Source: VNF1 2007)
Location Urban residents Residents afford Average
(groups) VNF1 rice income/ month
Hanoi (Group 1) 2,650,472 927,665 6m
Group 2 995,765 179,237 4.5m
Group 3 1,109,220 133,106 4.3m
Group 4 1,269,969 126,996 4m
Group 5 523,624 41,889 3.7m
Total 1,408,896

19. VNF1 Mission, Vision & Value
 Mission
To produce and distribute clean and safety rice via modern
channels.
 Vision
Be leader in production and distribution of clean and safety rice, to
enhance Vietnamese rice value.
 Strategy Goal
 Sustainability
 Better awareness of clean rice
 VNF1 brand-name rice

20. Market Objectives
30% Hanoi market
Well known clean rice In the next
with VNF1 brand 5 years
Professional image
of VNF1 of a modern distributor

21. BUSINESS STRATEGY FORMULATION
 EFE & IFE for VNF1
EFE
External factors Weight Rating Score
1 Tax reform 0.08 3 0.24
2 New technology for agri business 0.10 4 0.40
3 Interest rate increase 0.05 2 0.10
4 Changes in shopping behaviors 0.18 3 0.54
5 New retailer giant 0.09 3 0.27
6 Financial crisis 0.10 2 0.20
7 Expansion of urban areas 0.05 2 0.10
8 WTO 0.04 3 0.12
9 Improvement of suppliers capacity 0.11 3 0.33
10 Nature 0.20 2 0.40
1.00 2.70
Total EF point of 2.7 illustrates that VNF1's reaction against external factors at average level
IFE
Internal factors Weight Rating Score
1 Increase of productivity 0.07 4.00 0.28
2 New HR structure 0.06 3.00 0.18
3 Better post sales services 0.04 3.00 0.12
4 Better budget for R&D 0.05 2.00 0.10
5 Joining the Retailer Association 0.03 2.00 0.06
6 Commitment of leadership 0.10 3.00 0.30
7 Established brands of VNF1 0.20 4.00 0.80
8 New foreign partner 0.30 4.00 1.20
9 New office 0.05 3.00 0.15
10 Higher rate of employment turnover 0.10 3.00 0.30
1.00 3.49
Total IF point of 3.49 demonstrates that the internal strength of VNF1 is better than competitors

22. BUSINESS STRATEGY FORMULATION
 QSPM for VNF1
Option 1: Differentiation Option 2: Cost leadership
External factors Weight Rating Score Rating Score
1 Tax reform 0.08 2 0.16 3 0.24
2 New technology for agri business 0.10 4 0.40 3 0.30
3 Interest rate increase 0.05 2 0.10 3 0.15
4 Changes in shopping behaviors 0.18 4 0.72 3 0.54
5 New retailer giant 0.09 4 0.36 3 0.27
6 Financial crisis 0.10 2 0.20 3 0.30
7 Expansion of urban areas 0.05 2 0.10 2 0.10
8 WTO 0.04 3 0.12 2 0.08
9 Improvement of suppliers capacity 0.11 3 0.33 2 0.22
10 Nature 0.20 2 0.40 3 0.60
Total 1.00 2.89 2.80
Internal factors Weight Rating Score Rating Score
1 Increase of productivity 0.07 3.00 0.21 4.00 0.28
2 New HR structure 0.06 3.00 0.18 2.00 0.12
3 Better post sales services 0.04 3.00 0.12 2.00 0.08
4 Better budget for R&D 0.05 3.00 0.15 1.00 0.05
5 Joining the Retailer Association 0.03 2.00 0.06 1.00 0.03
6 Commitment of leadership 0.10 3.00 0.30 2.00 0.20
7 Established brands of VNF1 0.20 4.00 0.80 2.00 0.40
8 New foreign partner 0.30 4.00 1.20 2.00 0.60
9 New office 0.05 2.00 0.10 2.00 0.10
10 Higher rate of employment turnover 0.10 3.00 0.30 3.00 0.30
Total 1.00 3.42 2.16
Grand total 6.31 - 4.96

23. DIFFERENTIATION
VNF1 QUALITY:
 Quality and contents in line
with registered criteria.
 Natural tastes.
 Prohibited chemicals- free.
 True weight.
 Professional packaging.
 Friendly delivery

24. HOW TO BE THERE?
 Production management solutions: key
 Good demand forecast
 Strict control of material areas
 R&D: effective cooperation of 4 partners
 Exploitation of 5 levels of products
 LEAN: productivity, cost saving, initiatives
 Standardized with HACCP, ISO 9001/22000.
 PROCESS

25. HOW TO BE THERE?
 HRM solutions
 Customers as the center and employees as lead of all
activities.
 Smart attraction
 Clear job analysis, performance appraisal
 Work-life balanced compensation
 PEOPLE for 4P+ marketing plan
 Proactive in consulting for management in HR
planning.

26. HOW TO BE THERE?
 PR solutions: continuous, 2 way communications
 VNF1 is clean and natural
 VNF1 is specialist, stylish:
 market report,
 theme restaurant,
 alive rice museum
 VNF1 is high tech
 VNF1: community social responsibility
 VNF1: ready with crisis management ability
 Promote PHYSICAL EVIDENCE

27. HOW TO BE THERE?
 Distribution
solution:
 Diversified, convenient for
customers
 Advantages of the current
network
 Catch up with modern

28. HOW TO BE THERE?
 Finance management solutions:
 cost saving with better supply chain
 Take the best advantages of wide business network to be the leverage for others

29. MILESTONES IN THE 5 YEAR STRATEGY IMPLEMENTATION
2010 2011 2012 2013 2014 2015
Criteria for
evaluation
Q Q Q Q Q Q Q Q Q Q Q Q
Area Milestones 1+2 3+4 1+2 3+4 1+2 3+4 1+2 3+4 1+2 3+4 1+2 3+4
1. Corporate structure and culture
Level of absorb of feedbacks
HRM reenforcement
Objectives
2. Completion of job analysis,
performance appraisal, compensation
HRM and feedback system
3. Promotion campaign for VNF1 brand
Promotion products
4. Strengthening of distribution system/
Budget
Place policy
Product 5. Strengthening of standard production
quality process control
HRM 6. Survey on staff satisfaction
Deadlines
achieved,
7. Survey on customers awareness on
Promotion VNF1 brands

30. CONCLUSION
What “Rice Group” have done?
 Picture of VNF1
 Recommend the way to go in
the next 5 years
 Clean, High quality
 Catch up with globalization
 Cultural value of Vietnam rice
 A leading rice business
 Challenges: synergy among
functions

31. THANK YOU
… BUT NOT THE END

32. REFERENCE
1. Textbooks on Strategic Management of MBA Program, Griggs
University
2. Portable MBA in Marketing.
3. VNF1 Distribution JSC website http://vnf1jsc.vn/home/
4. Reports on Vietnam Rice Market and Recommendations to Develop
Distribution System, VNF1, July/2009
5. Report on the Survey on Hanoi Rice Consumers Behavious, VNF1
6. Website of General Statistics Office http://www.gso.gov.vn/
7. Website
http://www.saga.vn/Marketing/Phantichvadubao/13140.saga
8. Website of US Rice Federation