Tại sao phải xây dựng chiến lược cho doanh nghiệp
There have been many big companies in the world and Vietnam suffering from failure.
According to statistics, now only 16/100 big enterprises have existed since previous
centuries. Hence, which are reasons that made big companies which ever had a heyday
with miraculous success to fail? Through the analysis of companies, causes leading
them to failure include:
- Can not escape from the glorious past (can not escape from its own shadow).
- At the age of heyday, all enterprises ' desires can be achieved easily.
- They are satisfied with all outcomes even if they are not really worth.
- There are too many redundant resources.
- Only based on material resources and using these resources instead of creativity.
- Maintain the system was successful from before so there is no any initiative for future
- No business optimization system is upgraded regularly.
- Business process too rigid, vulnerable with the business environment change
- The strategy is too short with past successes.
- Glorious giving to leaders, to make them lack motivation
- Always optimistic / unrealistic optimism.
Therefore, a business wants to survive and develop needs to have an appropriate
strategy. So what is strategy? There have been many definitions of business strategy
which many economists brought out through collection and I see: Strategy is a
concatenation, a series of activities designed to create long-term competitive advantages
compared with rivals. In the operatation environment of a company, including market
and competitors, strategies outlined a consistent conduct for a company. Strategy shows
a selection, a swap of the company which professionals often call strategic positioning.
Company operates without strategy like a person going on the road without
determination of where to go, where to come back, letting the crowd (market and
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competition) push in any direction and then they move in that direction. If continue to
go on like that, he will be only a mediocre in the crowd forever.
A talented leader will not want to consign the future of his business for competitor and
market. To do that, he must proactively set out a direction and try to influence and lead
the market to this direction which his company has prepared, therefore, it will get more
advantages than others.
In any confrontation, rivals who can impose their game on the opponent will have better
chance of winning.
So with such concept, the strategy for a business or an organization has what role and
Benefits of Strategic Management
Strategic management allows an organization to be more proactive than reactive in
shaping its own future; it allows an organization to initiate and influence (rather than
just respond to) activities—and thus to exert control over its own destiny. Small
business owners, chief executive officers, presidents, and managers of many for-profit
and nonprofit organizations have recognized and realized the benefits of strategic
Historically, the principal benefit of strategic management has been to help
organizations formulate better strategies through the use of a more systematic, logical,
and rational approach to strategic choice. This certainly continues to be a major benefit
of strategic management, but research studies now indicate that the process, rather than
the decision or document, is the more important contribution of strategic
management.Communication is a key to successful strategic management. Through
involvement in the process, in other words, through dialogue and participation,
managers and employees become committed to supporting the organization. Figure
1 illustrates this intrinsic benefit of a firm engaging in strategic planning. Note that all
firms need all employees on a mission to help the firm succeed.
Figure 1 Benefits to a Firm That Does Strategic Planning
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The manner in which strategic management is carried out is thus exceptionally
important. A major aim of the process is to achieve the understanding of and
commitment from all managers and employees. Understanding may be the most
important benefit of strategic management, followed by commitment. When managers
and employees understand what the organization is doing and why, they often feel they
are a part of the firm and become committed to assisting it. This is especially true when
employees also understand linkages between their own compensation and
organizational performance. Managers and employees become surprisingly creative and
innovative when they understand and support the firm’s mission, objectives, and
strategies. A great benefit of strategic management, then, is the opportunity that the
process provides to empower individuals. Empowerment is the act of strengthening
employees’ sense of effectiveness by encouraging them to participate in decision
making and to exercise initiative and imagination, and rewarding them for doing so.
Strategic planning is a learning, helping, educating, and supporting process, not merely
a paper-shuffling activity among top executives. Strategic-management dialogue is
more important than a nicely bound strategic-management document. The worst thing
strategists can do is develop strategic plans themselves and then present them to
operating managers to execute. Through involvement in the process, line managers
become “owners” of the strategy. Ownership of strategies by the people who have to
execute them is a key to success!
Although making good strategic decisions is the major responsibility of an
organization’s owner or chief executive officer, both managers and employees must also
be involved in strategy formulation, implementation, and evaluation activities.
Participation is a key to gaining commitment for needed changes.
An increasing number of corporations and institutions are using strategic management
to make effective decisions. But strategic management is not a guarantee for success; it
can be dysfunctional if conducted haphazardly.
Research indicates that organizations that use strategic-management concepts are more
profitable and successful than those that do not. 16 Businesses using strategicmanagement concepts show significant improvement in sales, profitability, and
productivity compared to firms without systematic planning activities. High-performing
firms tend to do systematic planning to prepare for future fluctuations in their external
and internal environments. Firms with planning systems more closely resembling
strategic-management theory generally exhibit superior long-term financial performance
relative to their industry.
High-performing firms seem to make more informed decisions with good anticipation
of both short- and long-term consequences. In contrast, firms that perform poorly often
engage in activities that are shortsighted and do not reflect good forecasting of future
conditions. Strategists of low-performing organizations are often preoccupied with
solving internal problems and meeting paperwork deadlines. They typically
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underestimate their competitors’ strengths and overestimate their own firm’s strengths.
They often attribute weak performance to uncontrollable factors such as a poor
economy, technological change, or foreign competition.
More than 100,000 businesses in the United States fail annually. Business failures
include bankruptcies, foreclosures, liquidations, and court-mandated receiverships.
Although many factors besides a lack of effective strategic management can lead to
business failure, the planning concepts and tools described in this text can yield
substantial financial benefits for any organization.
Besides helping firms avoid financial demise, strategic management offers other
tangible benefits, such as an enhanced awareness of external threats, an improved
understanding of competitors’ strategies, increased employee productivity, reduced
resistance to change, and a clearer understanding of performance–reward relationships.
Strategic management enhances the problem-prevention capabilities of organizations
because it promotes interaction among managers at all divisional and functional levels.
Firms that have nurtured their managers and employees, shared organizational
objectives with them, empowered them to help improve the product or service, and
recognized their contributions can turn to them for help in a pinch because of this
In addition to empowering managers and employees, strategic management often brings
order and discipline to an otherwise floundering firm. It can be the beginning of an
efficient and effective managerial system. Strategic management may renew confidence
in the current business strategy or point to the need for corrective actions. The strategicmanagement process provides a basis for identifying and rationalizing the need for
change to all managers and employees of a firm; it helps them view change as an
opportunity rather than as a threat.
Gordon Greenley stated that strategic management offers the following benefits:
It allows for identification, prioritization, and exploitation of opportunities.
It provides an objective view of management problems.
It represents a framework for improved coordination and control of activities.
It minimizes the effects of adverse conditions and changes.
It allows major decisions to better support established objectives.
It allows more effective allocation of time and resources to identified
7. It allows fewer resources and less time to be devoted to correcting erroneous or
ad hoc decisions.
8. It creates a framework for internal communication among personnel.
9. It helps integrate the behavior of individuals into a total effort.
10.It provides a basis for clarifying individual responsibilities.
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11.It encourages forward thinking.
12.It provides a cooperative, integrated, and enthusiastic approach to tackling
problems and opportunities.
13.It encourages a favorable attitude toward change.
14.It gives a degree of discipline and formality to the management of a business.
With the analysis in above 3 benefits that are most important and most basic of
strategic management? My personal opinion 03 benefits as follow:
1. Sets the strategic direction to the firm - Understanding the changing environment
Strategic management process clearly defines what is the desired level of
performance (mission/goals/objectives) and it sets the direction so that everyone in
the organization knows where are they heading towards. Strategic management act
as a road map to everyone in the organization and it clearly defines the way to get to
the final destination/desired level of performance.
Strategic management predicts the future changes that can take place. Predicting
future changes that can take place will help the organization to be proactive and take
necessary steps to manage change with contingency planning and change
2. Focus on critical factors of the organizationStrategic management identifies the critical factors that are strategically important
to the organization. When critical factors are identifies company can analyse and
take relevant measures to ensure satisfactory performance in those areas.
3. Obtaining sustainable competitive advantage - Ensure the long term survival in
the market place
This is the most important and the most critical benefit of strategic planning. By a
successful strategic management process company should be able to build a
competitive advantage over other competitors which can be sustained overtime
without being imitated or outperformed by its competitors. Strategic management
identifies the competitive advantages that can be generated through strengths of the
organization and take necessary steps to effectively obtain it.
Strategic management identifies opportunities and threat that influence the
organizational performance. It make use of opportunities and minimize threat to
make sure that company can survive in the market by outperforming its rivals.
This point of view has been demonstrated through the following example:
NatSteel Holdings Singapore was established in August 12, 1961 in Singapore. Since its
establishment with the first name of the National Steel Company (National Iron - Steel
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Mill - NISM), the strategic direction for its products is to produce all steel products for
the construction industry of Singapore and Malaysia. In September 16, 1962 at Jurong
industrial park (the first and largest industrial zone in Singapore) Dr Goh Keng Swee,
(later become the Finance Minister of Singapore) put the first brick for building plant.
After the process of building refining and rolling mill with the continuous rolling
technology of 21 rolling stands - the most advanced at that time designed and installed
by 2 Italian manufacturers Pomini and Danieni. By January 31, 1964 the first batch of
steel of NISM was brought to the market. After going into the stable production process
and continuous growth in sales, revenue and profit, NISM did not stop there but
continued to invest into pulling and cold rolling to serve the production of welding steel
which was determined as new products which would be in great demand in future. From
1965 to 1988 along with regular survey and hiring strict evaluation survey agency to
examine indicators of macroeconomic, identify business environment, competition,
capacity factor, determined competitors in the short -term and long-term to establish and
adjust development strategies that plant capacity was expanded from the first line
MBM1 in 1964 to 1988 - the inauguration of MBM6 . Besides that, the ancillary works
for 6 lines above were also built synchronously as steel scrap store, treatment areas to
clean steel scrap and whalf. For increase in plant productivity, not only increasing
product yields to Singapore market but also expanding to a new market - Malaysia.
Through exporting to Malaysia, in addition to maintaining the capacity of new lines
when Singapore market is not growing up with plant capacity and account for the first
position but not the exclusive position in the steel industry. These are one of things new
investors still hesitate to propose ideas of investing in steel industry in Singapore. At the
same period, in 1982. NISM built a completed steel processing plant which was the first
large-scale in Asia. This is the company having full of machinery and equipment to
perform machining processes steel for construction, see illustration below:
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Together with the growth of the international science and technology, NISM always
caught up and kept the initiative. Till 1985, the first computer system was used in the
control system of the production by NISM and by 1990 all system of the plant was
controlled by computer control system. 1990 was also the year marked a turning point
of NISM by renaming itself to NatSteel (National Steel) and besides that is expanding
investment in the chemical industry, electronics technology, resort and real estate.
Investing in technical industries mostly based on experience and qualifications of
available NatSteel staffs who regarded as one of NatSteel partners in serving activities
to enhance production capacity and trading of NatSteel. Until 2013, NatSteel capacity in
Singapore reached 900 000 tons of rolled steel/year and capacity of steel processing
plant reached 650 000 tons/year. Also in 1990, a joint venture with the Southern Steel
Behard to become a steel manufacturing plant with a capacity of 300 000 tons/year
located at address: Lorong Perusahaan 12, Prai Industrial Zone Penang, Pinang states,
Malaysia. Its capacity was continuously upgraded in periods and till 1997 capacity
reached 900 000 tons/year and 1.3 million tons year by 2012. Continuing its strategy, in
1993 NatSteel continued joint venture with Vietnam Steel Corporation VNSteel, then
established NatSteelVina Co., Ltd. After the construction of the plant in Thai Nguyen
Iron and Steel industrial zone, it was completed in 1995 with a capacity of 120 000
tons/year (upgraded to 200 000 tons/year in 2011) specializes in the production of hotrolled steel products serving the construction industry in northern Vietnam. The
coverage of products in 2013 is 17 provinces in Northern Vietnam with market share of
6%. In 1993 NatSteel Xiamen factory was established in Xiamen City, Fujian Province,
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China with a capacity of 350 000 tons/year (reserved capacity of 150 000 tons/year)
which formally inaugurated by Prime Minister Ly Quang Dieu in December 1997. In
Fujian Province, in 2012 and 2013 NatSteel continued to take overs 2 more corporations
of Xinhai Group at Fuzhou, China – 1 of 2 largest cities in Fujian Province, increasing
capacity of NatSteel Xiamen up to 1,15 million tons/year. Besides increasing steel
production capacity, NatSteel invested a steel processing plant in Xiamen city with a
capacity of 250 000 tons year in 2011 and started bringing product to market in 2013.
During this period, NatSteel opened a fabrication plant in East Philippine located in Iba
– Bagbaguin St, Brgy 171 Dist, Metro Manila , Luzon - Manila Philippines with a
capacity of 350 000 tons/year. In 1999 NatSeel continued to penetrate Thailand market.
Steel factory in Thailand is prestressed steel cables placed in 160Moo.11T.Nonglalok
SIW , A.Bankhai , Rayong 21120 , Thailand with a capacity of 200 000 tons/year and
expanded its influence further in Thailand market by building the second factory of
prestressed steel cable TSN Wires Co., Ltd. in 199 Moo 11 T.Nonglalok Bankai Rayong
21120. Thailand inaugurated and brought products to market in 2013 with a capacity of
250 000 tons. Continuing its strategy by investing into NatSteel Australia steel
processing plant in Sydney in 1999 and took over Best Bar Australia in 2000. With this
strategy NatSteel has put their products in the most developed areas of Australia like
Sydney, Melbourne and Perth then increasing its capacity in Australia to 250 000
tons/year. In Indonesian market, by a joint venture with Indonesia 's largest steel
company Krakatau to invest in the construction of steel processing plant in Jakarta in
2013 with Phase 1 capacity of 200 000 tons expected for products in the first quarter
2015. As of 2013 the total rolling capacity of the whole NatSteel group reached 3.9
million tons. Processing capacity cutting, bending steel mesh reached 1.35 million tons.
Production capacity of high -strength steel products reached 450 thousand tons. (See
details in the chart below)
Along with improving the production capacity are management strategies, effectiveness
evaluation of business operations applied ISO 9000 – 94 system which took effects in
1996. The process of strategic planning and management changed in 1998, applied ISO
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14000 in 1999, Real Time Customer Service Information System YESS in 1999, online
customer satisfaction survey measuring system in 2002, the Working Safety ( Safety
first ) in 2005 , professional sales team ( Salefore ) in 2006, Corporate social
responsibility (CSR) programs 2007, improving green environment of rolling mill
( Mill green ) 2010 .... With all efforts and thorough plan defined and adjusted annually
in accordance with the changes of the business environment, NatSteel Holdings has
continuously developed for over 50 years of operation. In addition to its strategies
NatSteel was highly appreciated and acknowledged with awards by organizations in
From example of the development of NatSteel, it can be seen that:
1. Since establishment, NatSteel strategy has been always consistent and development
is determined through an understanding of manufacturing and trading steel products
serving construction industry. Always forecast future needs, including the need for
new products and types, as evidenced by the establishment of steel processing plants
before real demand growth for nearly a decade.
2. NatSteel concentrates on its important factors like its highly qualified staff, working
environment which provides opportunities for all individuals and they are respected
in a united team with high spirit of cooperation. Thus, in its own strategy, NatSteel
has identified the core values from which to create the advantages of development
and achieve the set out strategic objectives.
3. NatSteel always creates sustainable competitive advantage and ensures long-term
survival in the Singapore steel market by increasing steel capacity, productivity to
take every advantage to offer products with competitive price, highl quality and
continuously improved service so NatSteel sustainably has a market share of 40% in
Singapore market, 45 % market shate in Fujian Province ... In addition, to ensure the
sustainable development, NatSteel strategic staffs continuously do analysis to
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identify opportunities and challenges, potential threats to adjust strategies suitable
with the constantly changing market.
Therefore, since it was found with production of only 12 thousand tons/year, after 50
years, until now total capacity of NatSteel reaches 4.75 million tons/year for all types of
steel products. To achieve this NatSteel must have a good strategic appropriate with the
trend and the increasing demands of the market.
1. Rolling: In steel production technology, after smelting and hot rolling hot-rolled
products are taken and drawn then cold-rolled as raw materials. Pulling and cold rolling
technology are used to improve the physical and mechanical target.
2. Welded Mesh: Products used for palisade with meshes made from steel have a
diameter ≤ 6mm. Products used for pouring concrete reinforced floor have diameter ≥ 6
3. Due to small area of Singapore, to minimize phases in construction, from 1989 all the
buildings in Singapore are not processed as cut and bend, crack to make structural
columns and beams at site. All these phases are done in steel processing plants then
delivered to the site to assemble and concrete.
- Strategic Management Curriculum - Prof.Dr. Vu Thanh Hung.
Strategic Management Concepts: A Competitive Advantage Approach - Fred R. David
- NatSteel Holdings historical markers.
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