Business Strategy (574) Assignment Submission
Added on 2022-01-27
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ASSIGNMENT 2 FRONT SHEET
Qualification BTEC Level 4 HND Diploma in Business
Unit number and title Unit 32: Business Strategy (574)
Submission date 16/12/2021 Date received (1st submission)
Re-submission date Date received (2nd submission)
Student name Nguyễn Quốc Thái Student ID GBH190654
Class GBH0908 Assessor name Thach Do Anh
Student declaration
I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I
understand that making a false declaration is a form of malpractice.
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Table of Contents I. Introduction ........................................................................................................................................................ 3
II. Main Contents .................................................................................................................................................... 4
1. Strategic Capabilities ...................................................................................................................................... 4
1.1 Definition .................................................................................................................................................. 4
1.2 Strategic Capabilities of TEG ..................................................................................................................... 4
2. Benchmarking analysis ................................................................................................................................... 6
2.1. Definition ................................................................................................................................................. 6
2.2. Industry benchmarking ............................................................................................................................ 6
2.3. Market share and Distribution Network .................................................................................................. 6
2.4. Sales revenue ........................................................................................................................................... 7
2.5. Growth rate ............................................................................................................................................. 8
2.6. Products ................................................................................................................................................... 9
3. Value Chain ..................................................................................................................................................... 9
3.1. Definition ................................................................................................................................................. 9
3.2. Primary Activities ................................................................................................................................... 10
3.3 Support Activities .................................................................................................................................... 12
4. VRIO Framework........................................................................................................................................... 15
4.1 Definition ................................................................................................................................................ 15
4.2. VRIO assessment for TEG ....................................................................................................................... 15
5. Strengths and Weakness of ASM .................................................................................................................. 18
5.1 Strengths ................................................................................................................................................. 18
5.2 Weakness ................................................................................................................................................ 19
III. In Conclusion ................................................................................................................................................... 19
References ............................................................................................................................................................ 19
I. Introduction
In this assignment, the objective of the report is to provide consulting services to companies in a variety
of areas, including internal and external analysis, critical adjustment, strategy execution and assessment.
strategy. Furthermore, the VRIO framework will be used to analyze how the organization creates a long -
term competitive advantage to make some recommendations on the strategy they should pursue in the
future.
II. Main Contents
1. Strategic Capabilities
1.1 Definition
Hartman (2019) stated that Strategic capability refers to a business' ability to harness all its skills,
capabilities and resources in order to gain competitive advantage, and thus survive and increase its value
over time. While strategic capability does take into account the strategies a business uses, it focuses on
the organization's assets, resources and market position, projecting how well it will be able to e mploy
strategies in the future. There is no single method or universal metric for measuring or noting strategic
capability.
1.2 Strategic Capabilities of TEG
The first is the contribution of capital. Truong Thanh Solar Power Joint Stock Company (TTSP) is controlled
by TECGROUP with the rate of 51%, focusing mainly on the development of solar power projects in the
Central and Southern regions with the spirit of “Japanese quality, Vietnamese price” (TEG, 2020). Grasping
the trend of encouraging the development of renewable energy in Vietnam, TEG has decided to increase
and hold a controlling stake in Truong Thanh Energy Joint Stock Company (TTP). The company has
successfully developed 3 solar power plants including: Hoa Hoi (Phu Yen province), Binh Nguyen (Quang
Ngai province) and Cat Hiep (Binh Dinh province - completed divestment in 2020) with a total capacity of
close to 357MWp. Projects that have generated electricity since 2019 at a fixed FIT price of 9.35 UScents,
contribute an average of more than 500 million kWh per year to the Vietnamese power system. Notably,
TEG plans to buy back 20% of shares in a wind power project in Tra Vinh (expected to generate commercial
power before October 31, 2021 at a fixed FIT price of 9.80 UScents within 20 years). Currently, TEG is
continuing to deploy and complete investment procedures for implementing new wind power projects in
Binh Dinh (125MW), Tra Vinh province (2,000MW), solar power projects in Ha Tinh (250MWp) and Dak
Nong (50MWp) - potential areas for renewable energy development (nguyen, 2021).
The second concern of TEG is to attract investors. In which, foreign investors from Thailand and Korea
through Mernus Investment JSC own nearly 19% of TEG shares. In addition, TTVN Group's strategic
partners such as: B.Grimm Power Group, Sermsang Power Group, Kumagai Gumi, ACIT... are planning long-
term projects with TEG to implement new energy projects in the near future. This helps put TEG to a new
position in the renewable energy sector (nguyen, 2021).
The third is the brand name Truong Thanh Energy and Real Estate Joint Stock Company. In 2019, TEG's
brand was honored as "Asian QUALITY BRAND 2019". When hearing the phrase Sao Mai Group, people
immediately think of the trademark of the Economic Group, which always conjures up the image of a
sociable and likable culture among Vietnamese people. With TEG, each award and achievement awarded
by the state or organizations are recognized from the non-stop contributions of the Board of Directors,
staff, and students. Talented, eager to learn, hardworking and determined to rise up. This award once
again recognizes TEG's continuous efforts in bringing to the training market technology products and
training services of international standards and completely new learning experiences that help t o convey
motivation and inspiration to students. Over the years, TEG is not only proud to have helped thousands of
students, students, and working people each year to have successful and rich lives, but also to build up a
spirit of Steel Warrior in each teacher and student. TEG in general, T3H, and EG in particular are full of
indomitableness, undaunted by difficulties and hardships to make a breakthrough through two core
business areas of the company, renewable energy and real estate (brand asia, 2019). These actions are
continued to bring the TEG brand to the masses. Therefore, when it comes to renewable energy, Truong
Thanh Energy and Real Estate Joint Stock Company will be more trusted.
Next is the capital efficiency. Real estate remains at the heart of TEG's strategy. However, TEG has
recognized the company's other growth potential area is renewable energy. Located in the ecosystem of
Vietnam Truong Thanh Group, TEG inherits not only the experience of investment and project
development but also directly participates in the construction and construction of many solar power
projects of the Group. In the coming years, it is expected that professional activities in the field of
renewable energy will continue to bring TEG a significant source of revenue. According to the 2021-2025
plan forecasted by SHS Securities, TEG's profit and cash flow in the next 5 years is expected to come mainly
from the real estate business segment with large projects such as Nghia An, Hoi Van, Truong Thanh Hung.
Yen, Bai Xep, Cat Hiep industrial cluster... The renewable energy segment brings steady financial cash flow
to TTP (subsidiary of TEG from 2021) and has a sudden profit from project transfer. Although the scale of
charter capital will double in 2021, the continuously increasing revenue and profit scale in the next 5 years
is the premise for TEG to rise to the group of 2,000 billion VND in revenue from 2025. TEG has a solid
revenue and profit growth roadmap, ensures that earnings per share grow over the years, and TEG's
dividend plan for the years from 2021 to 2025 is 8%-12%/year (nguyen, 2021).
2. Benchmarking analysis
2.1. Definition
Stapenhurst (2009) stated that Benchmarking is defined as the process of measuring products, services,
and processes against those of organizations known to be leaders in one or more aspects of their
operations. Benchmarking provides necessary insights to help you understand how your organization
compares with similar organizations, even if they are in a different business or have a different group of
customers.
2.2. Industry benchmarking
Currently, Gia Lai Electricity Joint Stock Company (GEC) is a company with a strong competitive advantage
over competitors in the renewable energy industry. GEC is also a formidable opponent of TEG. This is a
benchmark test for better analysis.
2.3. Market share and Distribution Network
In the field of renewable energy, GEC is currently the enterprise with the most projects connected to the
grid. According to EVN's statistics, by the end of May 2019, they accounted for 12% of the country's market
share. Unlike many other competitors in the field of solar power, Gia Lai Electricity Joint Stock Company
(GEC) does not invest in concentrated but spread-out investments. Their solar power plants usually have
a capacity of less than 100 MW and are scattered from Hue to the South. Currently, they have 5 solar
power plants that have been put into operation, the closest is the one in Truc Son - Dak Nong, officially
connected to the national grid on June 14. Truc Son factory is deployed on an area of 50 hectares, with a
capacity of 44.4 MW, a total investment of about 843 billion VND and has a record construction time of
only 3 months. Accordingly, the capacity of GEC's 5 factories is up to 260 MW, with a total investment of
nearly 5,000 billion VND. Every year, each solar power project is expected to contribute to the national
grid from 60 million to 103 million kWh, with an estimated revenue of 128 billion to 220 billion dong. Most
of GEC's projects are the first to power on in areas with relatively good solar radiation rates: from 4.6 - 5.3
kWh/m2/day with sunshine hours from 1,700 - 2,544 hours/year. As of the end of May 2019, it is estimated
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