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2010  GLOBAL ADVANCED MBA PROGRAM GRADE GeMBA01 V02 GROUP CAPSTONE PROJECT REPORT Title: DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY (PTC) from 2010 to 2015 GROUP No.: STUDENT'S NAME: Nguyễn Việt Phú (C) Lê Văn Trung Nguyễn Đăng Tịnh Nguyễn Văn Hải (1) GRADE : GeMBA01.V02 NGHE AN, 2010 -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 TABLE OF CONTENT TABLE OF CONTENT ACKNOWLEDGEMENT TABLE OF ABBREVIATIONS LIST OF FIGURES INTRODUCTION CHAPTER 1: THE RATIONALE OF BUILDING THE STRATEGY 11 1.1Theory of building the strategy: .11 1.2 Analysis of business strategy categories 12 2.1 Introduction of Phuong dong Petroleum Tourism Joint-stock company 33 CHAPTER 3: BUILDING BUSINESS STRATEGY FOR PERIOD OF 2010-2015 AND SOLUTIONS 68 3.1 Strategic options for Phuong Dong Petroleum Tourism Company for period of 2010-2015 68 3.2 Propose of functional strategies 77 3.3 Solutions to implement basis strategies by differentiation concentration method from 2010 to 2015 83 PROPOSAL 92 Proposals to Government, General Directorate of Tourism and other related units 92 Proposal to Vietnam Petroleum Group 92 CONCLUSION 93 REFERENCES .94 -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 ACKNOWLEDGEMENT First, we would like to express our sincere thanks to the training programme of International MBA, which is linked between the Griggs University and Hanoi National University, creates good conditions for us to attend this course and complete this assignment Second, we would like to thank the Board of Directors and staffs of PTC who warmly welcomed us and helped us to have sufficient information for this assignment during our practical time at the company The topic of the assignment is "Building the development strategies of PTC " One member of our group is a staff of PTC therefore it is convenient to grasp reality and approach the data directly Although, we have tried our best to complete this assignment most successfully, surely this assignment still has some evitable shortcomings We would like to receive your valuable opinions so that this assignment will be useful for us and be chosen by the Company Vinh city, 2010 Group of GaMBA01 V02 -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 TABLE OF ABBREVIATIONS MICE INBOUND ISO: OUTBOUND PTC USD VND WTO Meeting, Incentive, Convention, Exhibition Business Tour with foreigner customers in Vietnam International Standards Organization Business Tour with Vietnamese customers in abroad Phuong Dong Petroleum Tourism Joint-stock Company Dollar Vietnam dong World Trade Organization -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 LIST OF TABLES Table Table1: General strategies in five competitive forces Quote Competitive strategy in model of Michael Porter theory of Michael Table 2: Comparing characteristics of general strategies Porter Internet in five competitive forces environment Table 3: Profile matrix Table 4: SWOT matrix Internet "Strategy management" -Curriculum of Griggs University Table 5: QSPM Matrix Table 6: Profile matrix comparing companies having Group competitive ability Table 7: Lists of hotels, restaurants and travel agencies in Report of Nghe An Vinh city department of Culture, Table 8: Personnel situation of PTC for years Sports and Tourism PTC department of organization and Table 9: Quotations of financial reports from 2007 to 2009 Table 10: Spreadsheet of financial ratio Table 11: QSPM matrix Table 12: Targets of strategy Table 13: Estimated data from 2010 - 2015 Table 14: SWOT matrix model Table 15: Distribution sheet of detail strategy administration Financial department Group Group Group Group Group implementation -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 LIST OF FIGURES Figures Figure 1: Describe business environment Quote "Strategy management" -Curriculum of Griggs University -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 Figure 2: Chart of five competitive forces model of "Strategy Michael Porter management" -Curriculum of Griggs Figure 3: Chart of PTC's organization University PTC department of organization and Firgure 4: Vinh acient city Figure 5: Hue ancient capital - Hội An old town Figure 6: Vac village festival - Nghia Dan district Figure 7: Hùng temple and Chùa Hương festival Figure 8: Weaving brocade –Thái people Figure 9: Images of H’Mông and Chămpa people Figure 10: Caves and beaches in Nha Trang - Khánh Hòa Figure 11: Snowing in Sapa and telpher in Bà Nà Figure 12: Traveling in Red river – Hà Nội and Hot spring administration Internet Internet Internet Internet Internet Internet Internet Internet Internet in Bình Châu – Vũng tàu Figure 13: Swallow wharf in Thanh Hóa Mangrove Internet forest in Cà Mau Figure 14: Pumat national forest - Nghe An Figure 15: Popular hotels in Vinh Figure 16: Labor forces chart in period of 2008 – 2015 Internet Internet Based on PTC's and orientation to 2025( Persons) documents and Figure 17: Logo of PTC Figure 18: Logo of ACCOR proposals of group PTC company Accor supplied -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 INTRODUCTION • The necessary of the research: In market economy, production and trading efficiency is not only a measure reflects management's ability and standard but also a factor decides the life of a business Therefore, to improve production and trading efficiency, every business must be careful to determine steps, which are appropriate and strategic from organization and management to market exploitation With increasing competitive speed, building strategy for PTC in the present is very essential so that managers of PTC could understand markets, position of products, evaluate market segmentation, make business plans, restructure organizational structure and improve planning in order to increase competitiveness, create strength and influence of the PTC to market PTC owns Phuong Dong hotel that is a public relation place of Nghe an province Nghe An people committee assigns PTC to welcome politicians, businesspersons, foreign delegations, etc when they come to Nghe An to travel or invest Therefore, PTC's developing will be premise for tourism development in Nghe An province and to attract other economic structural development • The purpose of research topics Business strategy within five years is based on the actual situation of the company, market evaluation comparison, location of capability correlation among the company and other units on areas and in abroad The purposes are to make forecasts, investment plans, production and business in order to promote sustainable development of the company and to help managers operating macro-control economic activities • Subject and scope of research Subject : Phuong Dong Petroleum Tourism joint-stock company (PTC) Address: No –Trường Thi Street –Vinh city– Nghệ An province Business sectors are trading in hotels, restaurants, tourism and commerce in -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 which restaurants and tourism are main sectors bringing biggest profits Scope: Subjects and scope of this Capstone project research are in hotels, restaurants and tourism business Proposed period to build strategy is years from 2010 to 2015 and oriented to 2025 Period of research is years from 2007 to 2009 • Method of research Data include primary data and secondary data Secondary data are taken from various sources such as Phuong Dong Petroleum Tourism joint-stock company, Vietnam Petroleum Technical Services Company, Vietnam Petroleum Group, Ministry of Culture, Tourism and Sports, Ministry of Construction, Ministry of Trade and Industry, Ministry of Planning and Investment, Technology Security Bureau, other department,s newspapers and Internet Primary Data are taken by directly exchanging, working and investigating with managers in the company These detail information were not presented in the annual reports We also heard the managers reporting a few strategic direction of the Company in subsequent years • Technical analysis: The data are processed by the comparison, analysis and synthesis methods, which were used QSPM matrix, SWOT model and the PEST year competitive pressure model by Michael Porter Besides the introduction, conclusion and references, the research is structured into three main chapters as follows: CHAPTER 1: THE RATIONALE OF BUILDING THE STRATEGY CHAPTER 2: ANALYSIS OF ENVIRONMENT AND BUSINESS PERFORMANCE OF PHUONG DONG PETROLEUM TOURISM JOINTSTOCK COMPANY CHAPTER 3: BUILDING BUSINESS STRATEGY FROM 2010 TO 2015 AND GIVING SOLUTIONS -Group – GeMBA 01.V02 Page 10 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 plans close to the business strategy and overall business Investme strategy of each nt month, quarter, year coordinat Strategy 3: Develop products and services es with Board of Solution: Directors Improve the - Strengthening supervision and X X X X X X evaluation and Chiefs of quality of departme products nts and - Maintaining PTC's services trademark and image - Reforming system Solution: of report - Promoting research Diversific and development to ation of design new products products and services such as and food tourism, services adventure tourism, X X X X X X The whole company X X X Board of 1.5 Directors tourism associated with major events (fashion, Miss Vietnam, holidays.) -Group – GeMBA 01.V02 Page 85 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 Departme nt of Planning and Applying new technologies in providing services to Investme X X customers nt; Departme 0.2 nt of Organizat ion Administ ration Proposing plans for merged hotels Departme directly under nt of Vietnam Petroleum Group to form X connections on a X X Planning and Investme network of hotels, nt services and travel across the country Promoting X X Board cooperation programs Directors; with The Accor group Departme to build a network of nt of deluxe hotels Planning and Investme nt; -Group – GeMBA 01.V02 Page 86 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 Directors of the units Strategy 4: Developing human resources Recruiting a trading representative staff X for the company Strengthening staffs for marketing activities both in and X X outside the country Recruiting Heads of Solution: Departme nt of Representative Office Recruitm in Hanoi, Da Nang, ent Ho Chi Minh Recruiting Deputy director of tourism Recruiting Chief X English, French, and Organizat X ion X ration X X X X Solution: Chinese fluently Training staff with Departme Training the goal of at least nt of 10% are fluent in 0.2 Administ Accountant Recruiting guiders who can speak Thai, X X X X X X X Organizat 0.2 foreign languages, ion - English is a priority; Encourage staff to Administ X X X ration 0.6 participate in training programs and -Group – GeMBA 01.V02 Page 87 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 improve their professional Solution: Maintain and develop the cultural environm Going a picnic X X X X X X X X X X X X 1.2 Holding festivals, conferences and seminars - Have uniforms - Encourage staffs to have the initiatives The 0.6 whole X X X X X X company 1.2 X X X X X X 0.3 ent Strategy 5: Restructuring the organization Changing company Board of structure under the plan of parent Directors, X Chief of company and its Solution Organizat subsidiaries Changing human organization appropriate to the new situation - Reorganizing the company ion X X X X X X Administ ration Departme X X X X nt Strategy 6: Changing Technology Solutions Basic renewal of X X Chief of management and Organizat training of human ion - resources in tourism; Administ Renewal of programs, ration content and training Departme 0.2 -Group – GeMBA 01.V02 Page 88 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 methods complies with national standards for the tourism industry; associate theory with practice and training with research To promote basic research and research nt of scientist application of advanced technologies, creating new and effective development Applying of Smile software for hotel management; X 0.1 X 20 upgrading accounting Cybersoft software Strategy 7: Financial Strategy Solutions Increasing the to charter capital generate according to the plan capital in which assets of X Quynh Luu Plaza are contributed from -Group – GeMBA 01.V02 Page 89 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 Powerland from 150 billions dong to 175 billions dong Coordinate with agencies to enhance collecting of bad X X X X X X 56 debts Borrowing capital by mobilizing loans from officers and X employees with 10 preferential interest rates Borrowing from Vietnam Petroleum Group through business assistance X programs with preferential interest rates Strategy 8: Develop infrastructure Using Minimize the bank capital loans Rebuild Quynh Luu Plaza into Quynh Luu Petroleum star Hotel Rebuild Truong Thi Financial X X X 11 Restaurant -Group – GeMBA 01.V02 Page 90 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 Open a representative office for the International X X X 03 X X X X X X Travel Center Complete the lease and plans to attract investments in two industrial projects in Nghi Son (Thanh Hoa) and Vung Ang (Ha Tinh) Manage capital tightly X X X -Group – GeMBA 01.V02 Page 91 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 PROPOSAL Proposals to Government, General Directorate of Tourism and other related units - The legal system in tourism needs to be standardized to ensure the development of business tourism; - Vietnamese tourism needs to receive sufficient supports of international acceptance and international experiences, learn from lessons of developed countries to shorten time and to avoid damage and unfortunately mistakes - To actively promote Vietnam's image in new era, reduce form of advertising on heroism in Vietnam, led to misunderstanding of foreign guests was still the country of Vietnam war - To actively monitor the activities of hotels and travel centers in the market, prevent dumping and using criteria indiscriminately - Support businesses in the construction of their culture Proposal to Vietnam Petroleum Group - Pay close attention to each member - It had better to constitute Tourism Corporation, which helps tourism system to increase cohesion and competitiveness -Group – GeMBA 01.V02 Page 92 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 CONCLUSION Tourism is an attractive business sector so competitive pressure in doing tourism business is very high Integration into the world economy will bring both opportunities and threats to businesses Competitive challenges are always the first challenges that businesses have to confront and overcome to survive In fact, tourism businesses in Viet Nam have not enough profession and management skills while the market requires highly qualified products and services PTC has more than 10 years of experience in businessing tourism They also have remarkable results that have created backgrounds of development and sustainable development In the future, PTC surely will develop faster and stronger With the Capstone project report “ Building business strategies for PTC in period of 20102015”, we hope that this project will bring useful values for company, improve the company’s economic effectiveness, create more jobs for employees and contribute to Nghe An tourism development -Group – GeMBA 01.V02 Page 93 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 REFERENCES A.M BRANDENBURGER –B.J NALEBUFF (2006) “Game theory in business” , Tri thuc Publisher Blue Ocean Strategy - Kim and Mauborgne, Knowledge Publishing House Competitive Strategy in Theory of Michael E Porter-Truong Ngoc Dung, 2006, General Publishing House, Ho Chi Minh City Marketing Strategy - Michael E Porter, 2000, General Publishing House Dist Ho Chi Minh City Methods of building and choosing product strategy of industrial businesses Pham Van Minh- National Economy University - Ministry of Education and Training Strategic Management - Dr Ngo Kim Thanh, Le Van Tam Strategic Management - Associate professor Le The Gioi, PhD Nguyen Thanh Liem and the MA Tran Huu Hai; The World is Flat by Thomas L Friedman; References from PTC; 10 References from Culture, Sports and Tourism Department 11 Some other documents 12 Eferences from Internet - Business World Portal: bwportal.com - Vinh City www.vitinfo.com Information - Government Information www.chinhphu.vn - Economic Information http://chungta.com -Group – GeMBA 01.V02 Page 94 ... of GaMBA01 V02 -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 -Group – GeMBA... – GeMBA 01.V02 Page 31 DEVELOPMENT STRATEGY OF PHUONG DONG PETROLEUM TOURISM JOINT STOCK COMPANY 2010 – 2015 External factors - 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Group 92 CONCLUSION 93 REFERENCES .94 -Group – GeMBA 01.V02 Page DEVELOPMENT STRATEGY OF PHUONG DONG