Tài liệu Building the competitive strategy for ats law firm co., in the period of 2018 2022

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- BÙI HỒNG HẠNH BUILDING THE COMPETITIVE STRATEGY FOR ATS LAW FIRM CO., LTD IN THE PERIOD OF 2018- 2022 XÂY DỰNG CHIẾN LƯỢC CẠNH TRANH CỦA CÔNG TY LUẬT ATS TRONG GIAI ĐOẠN 2018-2022 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH Hà Nội - 2017 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- BÙI HỒNG HẠNH BUILDING THE COMPETITIVE STRATEGY FOR ATS LAW FIRM CO., LTD IN THE PERIOD OF 2018- 2022 XÂY DỰNG CHIẾN LƯỢC CẠNH TRANH CỦA CÔNG TY LUẬT ATS TRONG GIAI ĐOẠN 2018-2022 Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS. HOÀNG ĐÌNH PHI Hà Nội - 2017 DECLARATION The author confirms that the research outcome in the thesis is the result of author‟s independent work during study and research period and it is not yet published in other‟s research and article. The other‟s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given. The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business, and the laws for above-mentioned declaration. Date………………………….. i ACKNOWLEDGEMENT Foremost, I would like to express my sincere gratitude to my advisor Assoc. Prof. Dr. Hoang Dinh Phi for the continuous support of my master study and research, for his patience, motivation, enthusiasm, and immense knowledge. His guidance helped me in all the time of research and writing of this thesis. Besides my advisor, I would like to thank to MBA studying course, and the team of HSB‟s lecturers and supporting staff. Without partcipating the course, as well as the caring and responsibility of them, I could not have opportunity to access and absorb the useful knowdlege for framing my comprehensive understanding about business administration. My sincere thanks also goes to Ms. Vu Thi Thu Ha, director and Mr. Tran Gia The, managing partner of ATS law firm, for offering me the opportunities to access, interview and discover the necessary information of the firm, for completing the thesis. Hanoi, date_____ ii TABLE OF CONTENTS DECLARATION .................................................................................................................... i ACKNOWLEDGEMENT ..................................................................................................... ii LIST OF TABLES ................................................................................................................. v LIST OF FIGURES .............................................................................................................. vi THESIS STATEMENT ......................................................................................................... 1 CHAPTER 1: BASIC THEORIES ON BUILDING THE BUSINESS COMPETITIVE STRATEGY........................................................................................................................... 5 1.1. Basic definitions ............................................................................................................. 5 1.1.1. Competitive strategy and its classification ............................................................... 5 Competitive strategy can be classified as follows :............................................................ 6 1.1.2. Roles of competitive strategy .................................................................................. 7 1.1.3. Competitive strategy of the business unit ................................................................ 8 1.1.4. Comprehensice competitive strategy of the business unit ....................................... 8 1.1.5. Growth strategies of business units ........................................................................ 11 1.2. Competitive strategy building process .......................................................................... 16 1.2.1. Diagram of competitive strategy building process................................................. 16 1.2.2. Competitive strategy building process ................................................................... 18 CHAPTER 2: ASSESSING THE CURRENT SITUATION AND THE PRESENT COMPETITIVE STRATEGY OF ATS LAW FIRM CO., LTD ........................................ 25 2.1. Introduction of ATS law firm ....................................................................................... 25 2.1.1. General introduction of ATS law firm ................................................................... 25 2.1.2. Vision and mission ................................................................................................. 26 2.1.3. ATS‟s business activities ....................................................................................... 26 2.1.4. Organizational structure ......................................................................................... 28 2.1.5. Current business operation ..................................................................................... 29 2.2 Analyzation of the external factors affecting the business operation of ATS law firm . 30 2.2.1. Macro environment factors .................................................................................... 30 2.2.2. Micro environment ................................................................................................. 33 2.3. Identification of opportunity and threat ........................................................................ 38 2.4. Matrix evaluation of the external factors (EFE) ........................................................... 38 iii 2.5. Analyzation of the internal factors (IFE) ...................................................................... 40 2.5.1. Executive capability ............................................................................................... 40 2.5.2. Human resources .................................................................................................... 41 2.5.3. Marketing activities ................................................................................................ 43 2.5.4. Financial situation of ATS ..................................................................................... 44 2.6. Identification of ATS‟s strengths and weakness........................................................... 44 2.7. Matrix of the internal factor analyzation (IFE) ............................................................. 45 2.8. SWOT matrix of ATS law firm .................................................................................... 46 2.9. The current business strategy of ATS ........................................................................... 48 CHAPTER 3: PROPOSAL OF SOME SOLUTIONS TO IMPLEMENT THE COMPETIVE STRATEGY IN THE PERIOD 2018-2022 ................................................. 49 3.1 Orientation of the Government on the economic development by 2025 and expectation of changes on environment and market, and the development of the lawyer profession .... 49 3.2. Development orientation and operation target of ATS law firm in the period of 20182022 ..................................................................................................................................... 50 3.3. Competitive strategy of ATS in the period of 2018-2022 and the action plan. ............ 50 3.3.1. Building the competitive strategy of ATS in the period of 2018-2022.................. 50 3.3.2. Competitive strategy of ATS in the period of 2018-2022 and action plan ............ 55 3.4. Appraisal of the supervision and result of the action plan ............................................ 59 3.5. Suggestion to ATS ........................................................................................................ 59 3.6. Disadvantage of the thesis and the possible next coming research .............................. 59 CONCLUSION .................................................................................................................... 60 LIMITATION ...................................................................................................................... 61 IMPLICATION ................................................................................................................... 62 REFERENCE....................................................................................................................... 63 ANNEX 1 ............................................................................................................................ 65 iv LIST OF TABLES Table 2.1 Revenue in period 2014-2016 ............................................................................. 29 Table 2.2 Matrix evaluation of the external factors of ATS law firm ................................. 39 Table 2.3: Partners/Consultants/lawyers qualification analyzation sheet ............................ 41 Table 2.4: Partners/Consultants/Lawyers professional analyzation sheet ........................... 42 Table 2.5: Partners/Consultants/Lawyers hospitality analyzation sheet .............................. 42 Table 2.6. Financial situation of ATS ................................................................................. 44 Table 2.7: Internal factor analyzation matrix ....................................................................... 45 v LIST OF FIGURES Figure 1.1. Traditional process of providing values to customers ...... Error! Bookmark not defined. Figure 1.2. Modern process of providing values to customers ........... Error! Bookmark not defined. Figure 1.3 Strategy management model of F.David ............ Error! Bookmark not defined. Figure 1.4 Five-competitive pressure model of M.Porter .... Error! Bookmark not defined. Figure 2.1 Organizational structure of ATS law firm .......... Error! Bookmark not defined. Figure 2.2 : Vietnamese GDP over the recent years ............ Error! Bookmark not defined. vi THESIS STATEMENT 1. Necessity of the thesis: The thesis is necessary, because the competition in the legal industry is very hard. The barrier entry of the industry is very low. Due to the low investment cost for such an intangible service industry, it is very easy for the new competitor to join the industry. Besides, there are many law firms who have the similar strategy and market share. They focus on the foreign direct investment, commercial and enterprise law consultancy, and providing such services to the foreign invested companies, and the large or medium Vietnamese companies. Meanwhile, the demand for the legal service has not developed significantly over the recent years.The acknowledgement of the public in general and the enterprise community about the importance of law compliance and role of lawyers is not high. The enterprise community, sometimes, dare to violate the laws, and when they have to face with the penalties from the government authorities, they are ready to pay the under the table lobby fee to the government officers, rather than fully comply with the laws, or hiring the lawyers to protect themselves. Due to the Vietnamese old fashion culture of respecting the “friendly and emotional relationship, and avoiding solving the dispute or conflict through legal proceeding or lawyers”, they see the lawyer fee is an unnecessary They just find lawyers after already facing with the troubles or dispute, instead of seeking the assistance from lawyers in advance, for avoiding any possible risk in the future. Due to the economic crisis which has been happening over nearly ten years, both the foreign investment volume into Vietnam, and the domestic economic investment or commercial activities reduced or standstill, resulting in the significant reduction of demand for lawyer services. Otherwise, the legal consultancy industry is saturated, after nearly sixteen years of development. Therefore, for surviving and developing in such hardship situation is the critical target, for not only the long term established law firms, with the large market share, but also the young and medium- size law firm like ATS. From the above reasons, the writer decides to choose the topic “Building the 1 competitive strategy for ATS law firm in the period 2018-2022” with aims to find out the effective strategy for the stronger stability of the law firm in the current situation, and its development in the future. 2. Objective of the research Purpose of the research: Basing on the theories on the business strategy management on designing the practical business strategy, and analyzing the actual impact of the business environment on the company business operation, as well as basing the future business operation of ATS law fim in the period of 2018-2022, with aims to enhance its competitive advantages and development in the situation of harder competition and international economic integration. Research duties: The specified duties that the thesis aims to is as of follows: 1) Why is it necessary to research the business strategy design in ATS law firm ? The answer of this question serves the identification of the necessity and meaning of the research purpose, research situation, the approaching method, as well as using of research methodology for achieving the planned target. 2) What is the theoretical bases of the business strategy design? Which theretical models are used for analyzing and defining the business strategy of ATS law firm? The answer of the research aims to identify the theoretical bases for defining ATS law firm‟s business strategy by using models such as five forces, value chain, SWOT matrix, etc.. 3)Which factors that can impact the actual business operation of ATS law firm in the period 2014-2017? Strenghth, weakness, opportunities and threats that ATS has and faces with? The question is answered by developing the theoretical bases in Question 2 above for collecting information, analyzing data for identifying the business strategy of ATS. 4) What is the competitive strategy of ATS in the future? What are the solutions for implementing the future competitive strategy? This part will solved by suggesting the optional competitive strategies for ATS, as well as its action plan in the next coming time. 3. Subject of the research Subject of the research include the following factors: (a) Analyzing the current internal and external factors impacting to ATS law firm. 2 (b) Analyzing the current strategy applying in ATS law firm, finding out its advantages and disadvantages. (c) Suggesting the solution for improving the disadvantages of the current strategy of ATS law firm. (d) Overseeing the future socio-economic development in the period of 2018-2022. (e) Building the future strategy for ATS law firm in the period of 2018-2022. 4. Scope of the research The scope of the research is within ATS law firm, its external and internal aspects in the period of 2014-2017, and suggestion for the period 2018-2022. 5. Research methodology The methodology of the thesis is based on the view of dialectical materialism, historical materialism to link theory to reality. 5.1 Data collecting methods Collecting and researching the primary information throughconducting the survey through circulating the questionnaires to the targeted groups such as the researched object (ATS law firm), the direct competitor group, the indirect competitor group (the replacing service), the targeted client group, and the management government authority. The planned survey questionnaires to be circulated shall be about 20-30 interviewees. The survey shall be done as follows: Direct interview: with ATS law firm. It is the face to face interview with the directors of ATS, for collecting the necessary information. Indirect interview through sending the questionaires to emails of the interviewees. Location: Hanoi, Vietnam Time for conducting the survey: October 2016-January 2017 Targeted interviewees: ATS‟s clients, including main groups of clients such as Japanese, Korean enterprises, Vietnamese giant corporations and state owned companies. Collect the secondary information resources such as annual comprehensive data report of law firms and transactions issued by Ministry of Justice, annual report on socio- economic development of Vietnam in period 2014, 2015 of General Statistic Bureau, Vietnam economic situation in 2015 reported by World Bank, online articles 3 on business development strategies and marketing tips for law firms. 5.2 Data analyzation methods The writer uses 2 data analyzation methods: quantitative methods using excel software for evaluation through the statistical survey questionnaire; qualitative methods such as analysis of rules, synthesis, interpretation, inductive, comparative. 6. Thesis structure The thesis structure is as following: Chapter 1: Theories on building the competitive strategy Chapter 2: Assessing the current situation and current competitive strategy of ATS law Firm Co., Ltd Chapter 3: Proposal of some solutions to implement the compettive strategy of ATS law firm in 2018-2022 4 CHAPTER 1 BASIC THEORIES ON BUILDING THE BUSINESS COMPETITIVE STRATEGY 1.1. Basic definitions 1.1.1. Competitive strategy and its classification It is easily to see the appearance and establishment of new business in many industry every day, as well as the hard competition between the competitors. Some of them exceed comparing with the other players, but many of them are left behind and many others disappear from the market. So what is the difference between the winner, the existing one, and the loser in a market, or an industry? The answer could be the talent of the leaders of the company, their cabilities, the unluckiness that the companies may face with, etc… However, one of them, the most important factor is the business strategy that the company applies. The reason why having an effective strategy is so important is because it gives business time to get some sense of how they are performing, what their capabilities are, and if these capabilities are able to help them grow. A business strategy, in a simple term, is a documented plan on how an organization is setting out to achieve their goal. A business strategy contains a number of key principles that outlines how a company will go about attaining these goals. For example, it will explain, how to deal with your competitors, look at the needs and expectations of customers, and will examine the long term growth and sustainability of their organization. The business strategy is an interesting topic and paid much attention by different scholars and researchers, along with the historical development of business administration. The definition of strategy are also paid much attention by the famous business strategist, Micheal Porter, in his book “Competitive strategy” “competitive strategy is a combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there” Developing the definition, as well as connecting the strategy with the competitive advantages, Brace Henderson, the strategist, as well as the founder of Boston Consulting Group, stated that “Strategy is the prudent seeking of an action plan for developing and combining the competitive advantages of an organization”. Analyzing the above mentioned definitions, we can see the main common features as 5 follows: - Identifying the long term target of the enterprise/organization. - Setting up the comprehensive action plan. - Choosing the performance policies, mobilizing the resources for implementing the target. Competitive strategy can be classified as follows : (a) Managing classification: Basing on the managing level, strategies are classified into 3 following groups: (i) Corporate level The corporate level strategy has the below contents: - Identifies the target and core business activities of a corporation. - Creates the important policies and plans for achieving the corporation‟s target, mobilizing the resources among different business activities. (ii) Corporate level strategies apply to the whole corporation. Divisional level The divisional level has the below contents: - Idenfies the specified products/services or markets within the internal of the corporation. - The participation that each division of the corporation has to fulfill for contributing the corporate level strategy. (iii) Functional level The functional level has the below contents: - Focusing on assisting the corporate level strategy. - Focusing on specified operating activities. (b) Development orientation classification Basing on the functions, the strategies could be classified as follows: (i) Combination strategy group Combination strategy group includes the forward strategy, the backward strategy, and the horizontal strategy. Forward strategy: The enterprise increases expands or increase its ownership to the distributors or retailed sale agencies, with aims to get better profit margin. Backward strategy: the enterprise expands or increase its ownership to the supplier, 6 with aims to control the input expenditures. Horizontal strategy: the enterprise has its own ambition to merger & acquisition with the other competitors in the same industry, for focusing the resources; expanding the scope of business activities and increasing the competitiveness of the enterprise. (ii) Intensive strategies There are following intensieve strategies: Market penetration strategies: A market penetration strategy involves focusing on selling the existing products or services into the existing markets to gain a higher market share. Market development strategies: Market development is a growth strategy that identifies and develops new market segments for current products. A market development strategy targets non-buying customers in currently targeted segments. It also targets new customers in new segments. Product development strategies: This strategy is employed when a company's existing market is saturated, and revenues and profits are stagnant or falling. A product developmentdiversification strategy takes a company outside its existing business and a new product is developed for a new market. (iii) Diversification strategies Diversification strategies include the following: Concentric diversification strategy: Concentric diversification is a type ofbusiness strategy where a company acquires or creates new products or services to reach more consumers. These new products and services usually are closely related to the company's existing products and services. Horizontal diversification: The horizontal diversification is a type of business strategy where the company provides the new products and/or services which are not related to the current products/services to the current targeted customers Mixed activity diversification: the mixed activities diversification is a type of business strategy where the company provides the new products, services without any relation to the current products or services to the current market share. 1.1.2. Roles of competitive strategy (a) Role of targeting and orientation: 7 Competitive strategy plays an important role in mapping out the target and development orientation of the enterprise. It helps the executives to identify the roadmap the enterprise should go, as well as its expected outcome. (b) Role of forecasting: The enterprise exists and operates in an evolving environment, and is impacted significantly by many economic, political, social, technology factors, etc. Therefore, it is necessary to forecast the change of such factors, with aims to find the possible solutions for preventing risks arising from such change, as well as amending the strategy of the enterprise, for take advantage effectively from the change. (c) Role of management: Apart from setting up the orientation and roadmap for achieving it, it is necessary for the executive of the enterprise to mobilize, arrange and use the necessary resources effectively for implementing the action plan and obtaining the expected result. 1.1.3. Competitive strategy of the business unit Competitive strategy of the enterprise includes two following groups: the comprehensive competitive strategy, and the grow strategy. 1.1.4. Comprehensice competitive strategy of the business unit According to Micheal Porter, there are four types of comprehensive competitive strategies: low cost; diversification; focusing; and fast reaction) (a) Low cost strategy: The purpose of the enterprise that follows the low cost strategy is to compete by providing the products or services with lower cost compared with the same one of the similar competitors. (i) The low cost strategy has the following features: - Focuses on renovating the technology and management process for reducing cost. - Do not focus on the diversification or differentiation. - Do not focus on R&D activities for creating the new functions of the products and/or services. - The targeted customers shall be the low- end or mid- end level who concern very much on their expenditures for buying products or services. (ii) - Advantages of the low cost strategy: Strong competitiveness with the replacing products and/or services. 8 - Good negotiation position with the suppliers. - Create the barrier to market entry. (iii) Risks of the low cost strategy: - Huge investment in technology for manufacturing mass production with low cost per unit - It is possible to be copied or imitated. - Just focusing on the basic demands of the customer, and does not take care of the added value of the products and/or services to be provided to the customer. (b) Differentiation The purpose of the enterprise that follows the differentiation strategy is to compete by creating the unique and different features of the products, services, and satisfying the customer‟s demands exceeding what the other competitors cannot provide. (i) - Features: The enterprise can charge higher price of the products and/or services, compared with other competitors. - Focusing on the differentiation. - Classifying the market into different segments. (ii) Advantages: - Creating brand loyalty. - Strong negotiation force with the suppliers and customers. - Create significant market entry. - High competitiveness with the replacing products. (iii) Risks: - It is very challenging to remain the unique features of the products and/or services. - Face with the imitation of the competitors. - The customers may not be always faithful to the products and/or services. - Too unique more than what the customers want. (iv) The relation between the differentiation and the customer’s demands - The differentiation must satisfy the specified demands of the customers, and may be modified for the particular customer segments. Beside, it must create better or more interesting features of the products and/or services, compared 9 with the (similar) products and/or services of the competitors. - The differentiation must create the unique features of the products and/or services that the competitors cannot imitate. (c) The differentiation must be based on the particular advantages of the enterprise. Focusing strategy Focus strategy is only to meet specific needs of a particular market segment by geographic feature, customer or product characteristics that specifically meet these specific needs. (i) Features: - Can explore special capabilities of the company. - Can pursue product differentiation strategy. - Focus on the target segment. (ii) Advantages: - Can provide unique, special products or services that other competitors cannot. - Understand clearly the target segment. (iii) Risks: - No advantages in the company‟s relationship with the suppliers. - High production cost. - Changes in technology or customer taste. (d) Quick response strategy In the competition, companies often start with low cost strategy, and then turn into differentiation strategy, and later on, the combination of these two strategies. Today, many companies gain competitive advantages by focusing on timely delivery. This is reflected in the following aspects: - New product development. - Product personalization. - Existing product improvement. - Purchase order based product distribution. - Adjustment of marketing activities. - Taking care of customer‟s requirements. 10 1.1.5. Growth strategies of business units There are three growth strategies, including intensity strategy (market penetration, product development, market development), integration strategy (forward integration, backward integration and horizontal integration); diversification strategy (concentric diversification, horizontal diversification, and conglomerate diversification) (a) Intensity strategy (i) Market penetration Market penetration strategy is a strategy of increasing sales and profits by striving to sell more existing products on current markets through marketing activities. With this strategy the company can increase its market share by strategic solutions: Increase the purchasing power of customer The purchasing power of customer is expressed in the relation between the purchasing frequency and the purchasing volume. In order to increase the purchasing power of customer, the company can select suitable solutions such as product differentiation, packaging improvement, marketing & promotion, and other solutions to minimize production cost in order to have a reasonable pricing, etc. Attract competitor’s customers The company can attract customers from competitors if it can enhance its special capabilities and especially focus on marketing activities such as product improvement, packaging, pricing, distribution system, etc. The company may consider seeking to retain greater control by acquiring one or more competitors. Under the regulation of the law on free competition protection, caution must be given when choosing this strategy to avoid violation against antitrust laws. However, as mentioned above, companies rarely choose this strategy to maintain corporate culture. On the other hand, market penetration may also include the increase in the overall market size by making new customers (in the existing market) be familiar with the company‟s products. (ii) Product development Product development strategy is a strategy to increase sales and profits by developing new products for sale in the current markets of the company. New products that can be selected under this strategy are improved products and brand-new products (designed by 11 R&D department of the company or the patent is bought from a research institution), new products emulated from leading companies in the national or international market (socialized copyrights). In fact, the strategy of improved products is the first priority of most companies in the world and becomes a driver of the competitive advantage in the market. It is necessary to diversify products and services in order to make use of strong capital and available human resources along with a distribution network throughout the provinces and cities. Better care and services are required to satisfy the customers‟ demand. Market opportunities are growing. Therefore, the company has launched many service packages appropriate with customer demands as well as expanded many business areas to take advantage of all capacity of the company to occupy the market and become the leading supplier in several advantageous areas. (iii) Market development strategy Market development strategy is a strategy to increase sales and profits by selling existing products in new markets. Under this strategy, when the demand of the current market decreases, the company needs to find new markets to sell products with the following solutions: - Find new markets in new area, including other territories and countries This solution is selected by many companies in developed countries all over the world to boost their sales and profits. However, when deciding to develop new markets, it is important to consider the opportunities and threats as well as strengths and weaknesses of the company against its competitors. Also, income, expense and market development opportunities are worth considering. On the other hand, the company needs to pay attention to the marketing strategy to develop new market successfully. Nowadays, many enterprises in our countries have various opportunities to develop new markets in this direction, thanks to the Government‟s diplomatic activities and the enterprise‟s efforts to find new customers. - Look for new target customers. This solution includes looking for new target customer groups in the existing markets. When designing its original products, many companies only targeted one or several target customers. During its development, marketing executives and salesmen found out that other audiences might also have demand for these 12