Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (102)

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY OF THE POWER ENGINEERING CONSULTING JOINT STOCK COMPANY No.1 (PECC1) IN THE PERIOD OF 2011-2015 Group Number: Student’s name: Dang Trung Kien Le Minh Tuan Do Huy Cong Tran Thi Ngoc Tai HANOI 2011 i ACKNOWLEDGEMENTS This capstone project of our group would not have been possible without the support and encouragement of many people We would like to express, first and foremost, my sincere gratitude to our supervisors on strategic management, who have supported us throughout our study with their patience and knowledge Their encouragement, supervision and supports enabled us to complete this paper successfully Special thanks to all of the lectures and staff at Global Advanced MBA program (GaMBA), Vietnam National University There are not enough words to describe your excellent work Last but not the least, we are deeply grateful thanks to Power Engineering Consulting JSC No1’s colleagues for the trust and supports that they sent us the opportunity to carry out this research, and for their ongoing interest in our writing Their valuable insights and perceptive comments are big help for us ii TABLE OF CONTENTS ACKNOWLEDGEMENTS ii TABLE OF CONTENTS iii LIST OF TABLES .iv LIST OF FIGURES, GRAPHS iv INTRODUCTION 1 The necessity of the research Objectives and Expected result .1 Research method, Data resources and processing .2 Scope of work and Limitations .2 The structure of the writting CHAPTER 1: THEORIETICAL BASIS OF BUIDING BUSINESS STRATEGY OF COMPANY 1.1 Strategy 1.2 Business strategy 1.3 Strategic management process CHAPTER 2: STRATEGIC ANALYSIS AND BUSINESS STRATEGY FORMULATION 14 2.1 About the Power Engineering Consulting service and the Power Engineering Consulting Joint Stock Company No.1 .14 2.2 External analysis of PECC1 .17 2.3 Internal analysis of PECC1 26 CHAPTER 3: STRATEGY SELECTION, RECOMMENDATIONS AND CONCLUSION 41 3.1 Briefing about SWOT of PECC NO.1 in the period of 2011-2015 41 CONCLUSION 52 APPENDIX REFERENCES 53 APPENDIX QUESTIONAIRE .54 APPENDIX PECC1, ACHIEVEMENTS AND REWARDS 56 APPENDIX SOME TYPICAL PROJECTS COMPLETED BY PECC1 .57 APPENDIX PECC1- CAPABILITY OF INVESTIGATION EQUIPMENT, TESTING.58 iii LIST OF TABLES Table Table 1.1 Table 1.2 Table 1.3 Table 1.4 Table 1.5 Table 2.1 Table 2.2 Name of table Example of possible factors in a PEST analysis Industry’s entry and exit barriers Bargaining power of buyers Bargaining power of suppliers GREAT model Several financial figures of PECC1 from 2005-2010 The demanded growth of electric to the growth of GDP from Page(s) 6&7 9 12 17 23 Table 2.3 2011-2015 External environment assessment for the industry power 29 Table 2.4 engineering consulting service in Vietnam by the end of 2010 Several key financial criterions of PECC1 in 2008, 2009, 30 Table 2.5 2010 The proportion of Human resource on Field of jobs, PECC1- 34 Table 2.6 Table 2.7 2010 The allocation of Human resource on branches, PECC1 2010 34 Human resource training condition of power engineering 35 Table 2.8 Table 2.9 Table consulting companies, Vietnam-2010 KSF selection results KSF Assessment results Strengths and Weakness conclusion 40 41 42 2.10 Table 3.1 Table 3.2 Table 3.3 Table 3.4 SWOT matrix for PECC1 by 2011 Strategy assessment/selection using GREAT model Plan of action for differentiation strategy Plan of action for the strategy of maintaining the possessing 44 45 48-50 52-54 key success factor-HR LIST OF FIGURES, GRAPHS Figure Figure 1.1 Figure 1.2 Figure 1.3 Figure 1.4 Figure 1.5 Name of figure Michael E Porter’s generic strategies Formulation strategy chart Porter’s five forces diagram M Porter’s Value chain SWOT analysis framework Page(s) 10 11 iv Figure 1.6 SWOT matrix 11 Graph Graph 2.1 Graph 2.2 Graph 2.3 Graph 2.4 Graph 2.5 Name of graph Organizational Structure of PECC1 Vietnam GDP growth Power consumption by economic sector Market share Revenue per person Page(s) 17 24 26 28 37 v INTRODUCTION The necessity of the research The power engineering consulting is one of the very specific technological services Currently, the power engineering consulting industry is no longer a monopoly in Vietnam Since 2008, PECC1 is no longer the preferential appointed bidder in the field of power engineering consulting in Vietnam when it was equatized The integration process to WTO of the Vietnam economy leads to the rush of foreign firms operating in all areas, power engineering consulting is not an exception Thus, the rivalry of completion is increasing, not only in terms of market share occupying but in terms of attracting and maintaining effective human resource of one another as well Despite of that fact, most of the participating companies have been without a longterm strategic development but based on the relationship with the authorities and some customers in the market Once there was a research named “Building strategy for PECC1” in 2005 but on the standpoint of a state-owned company in a monopoly market, the writing was more like a plan of action to achieve the assigned duties, which is not appropriate with the current circumstance any more The reasons above lend us the strong stage enough to choose “Building Business Strategy for PECC1 in the period 2011-2015” to be our capstone project Objectives and Expected result Aiming to contribute to PECC1’s competitive and sustainable development by suggestions related to business strategy, the objectives of this research are: - Review the theory of building business strategy Present about PECC1 and analyze its business environment Formulate an appropriate business strategy for PECC1, with corresponding detailed plan of action There might be a following research on assessing the implemented strategy in order to have certain adjustment Research method, Data resources and processing Case study and Descriptive analysis method is applied to analyze and build business strategy for PECC1 - Secondary data from Industry/company report, internet, newspaper - Primary data from Interviews with Focus group and a group of interviewees selected Scope of work and Limitations - Research on PECC1 in the industry of Power engineering consulting service - A business strategy for PECC1 in the period of 2011-2015 is recommended The research is limited in terms of case study approach that allow the writer to skip the preciseness in detail in analyzing on existing competitors of PECC1, though that is not change the final conclusion of the paper The result of this project is not directly applicable for companies operating in other industry The structure of the writting Excluding the Table of content, Introduction, Reference and Appendices, The Project covers main parts as below: Chapter 1: A fundamental review of strategy theory focusing on building business strategy Chapter 2: Strategic analysis on external as well as internal environment of PECC1 to identify opportunities and threats as well as strengths and weaknesses that are based to build the company’s business strategy Chapter 3: Formulation of an appropriate business strategy and suggestions of strategy implementation CHAPTER 1: THEORIETICAL BASIS OF BUIDING BUSINESS STRATEGY OF COMPANY The importance of strategy and strategic management for organizational success is now recognized in both the literature and practice Strategy and strategic management are necessary for an organization to achieve its objectives, enhance competitive advantages and improve its value This chapter provides the basic understanding of strategy, business strategy and strategic management The chapter focuses on strategy formulation as a part of the strategic management 1.1 Strategy Strategy may be understood in different ways and in various contexts; Strategy, in this paper, describes the way that the organization will pursue its goals, given the threats and opportunities in the environment and the resources and capabilities of the organization According to this definition, the organization’s strategies are based on the result of analyzing the external environment, the internal environment, and the goals that are being pursued Strategies exist at several levels in any organization ranging from the overall business entity to individuals working in it Depend on the scope of strategy there are corporate strategy, business strategy, and functional strategies 1.2 Business strategy 1.2.1 Business Strategy Most businesses have strategies which may not be formally written but still exist Business strategy is a plan for how a firm will compete, what its goals should be and what policies will be needed to achieve goals Business strategy is narrower in scope than corporate strategy but bigger than functional strategies It is a combination of the investment decision and the development of a sustainable competitive advantage 1.2.2 Three Competitive Strategies of Michael Porter Competition is inevitable in almost every industry around the world According to Michael E Porter, competitive strategy is the search for a favorable competitive position in an industry, the fundamental arena in which competition occurs Competitive strategy aims to establish a profitable and sustainable position against the forces that determine industry competition Therefore 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 Michael E Porter presents the three generic strategies: Broad Competitive advantage Low cost High cost Narrow Competitive scope Figure 1.1 Michael E Porter’s generic strategies Overall cost leadership Cost focus Differentiation Differentiation focus Source: [2, P.39] 1.3 Strategic management process A company has competitive advantage whenever it can attract customers and defend against the competitive forces better than its competitors Companies should aim to develop competitive advantages that are sustainable Figure 1.2: Formulation strategy chart Vision/ Mission External Analysis Opportunities and Threat - Macro Analysis - Industry Analysis Formulation and choice of appropriate strategy Internal Analysis Strengths and Weakness - Value Chain Model - Process to Identify Sustainable Competitive Advantages Competitive Strategy - Cost Leadership Strategy - Differentiation Strategy - Focus Strategy Strategy Implementation and Adjustment Source: [2, P.44] 1.3.1 Vision and Mission Before build up any strategy for a company, the important thing is that we must clearly understand what the vision and mission of that company are Vision describes aspirations for the future without specifying the means to achieve desired ends A vision becomes more visible when it is expressed in the form of a mission statement Meanwhile, mission describes the company’s business vision, including the unchanging values and purposes of the firm and forward-looking visionary goals that guide the pursuit of future opportunities Table 3.4: Plan of action for the strategy of maintaining the possessing key success factor-HR # Strategy\ Objectives Department in Estimated Strategic solutions charge Standardize the system of job -A clarified system of job titles covers A task force team cost 200 million title in the scale of the whole the dongs company, in which job competencies job description, required with the support Time months from the Board of description including core Management, HR competency requirements department and other functional departments A system of corresponding -Afford aiming to the most appropriate HR department income, reward/allowance to treatments to the contribution of labors each job title approved by the 50 million weeks dongs board of management 50 # Strategy\ Objectives Department in Estimated Strategic solutions charge Build up and public the -Motivate the employees by a clear and The task force cost 80 million career route in PECC1 dongs fair enough route to attempt and above with the contribute at work Time month support of HR department and approved by the Board of management Detail and clarify reward -Show off the recognition, appreciation, HR department , system for motivating in time, respect of recognition; contributors the company to the approved by the appropriate allowance weeks Board of management Short coaching course/ trip to -Enhance the corporate culture and HR department 100-150 enhance million/year the culture in PECC1 teamwork leadership, started from the level of Continually teams -Spread the proudness of being a member of PECC1 51 CONCLUSION The power engineering consulting is one of the very specific technological services with historical development The power engineering consulting industry is no longer a monopoly in Vietnam and PECC1 was equitized after the economy joining WTO The integration process has witnessed not only the rush of foreign firms but the significant renovation of other domestic ones Thus, the rivalry of completion is higher than ever before, not only in terms of market share occupying but in terms of attracting and maintaining effective human resource of one another as well Being aware of that fact, the writers choose building strategy for PECC1 as the group capstone project, aiming to contribute to the long-term development of the company Being named: “Building Business Strategy for PECC1 in the period 2011-2015”, the paper is expected to be a useful reference for other organizations operating in the same industry as well In this writing, literature relevant to building business strategy was briefed and adapted to analyze external environment as well as internal factors of PECC1 in order to propose the appropriate business strategy for PECC1 in the period of 20112015 with corresponding specific plan of actions With the trained knowledge and working experience, this capstone project was completed with a big attempt of group members However, there are still unavoidable limitations of our writing that really hope to achieve comments from professors and colleagues to be better Sincerely thank you very much! 52 APPENDIX REFERENCES Documents written in English Alex Miller, Gregory G Dess (1993), Strategic management, The McGraw-Hill Companies, Inc Michael E Porter (1980), Competitive strategy, The Free Press, A Division of Macmillan Publishing Co., Inc Philip Kotler (2003), Competitive strategy, The McGraw-Hill Companies, Inc Documents written in Vietnamese EVN (2010), Báo cáo quy hoạch điện lực Việt Nam theo kịch tăng trưởng kinh tế Quốc hội giai đoạn 2010-2020 PECC1 (2005, 2008, 2009, 2010), Báo cáo tài kiểm tốn PECC2 (2005, 2008, 2009, 2010), Báo cáo tài kiểm toán PECC3 (2005, 2008, 2009, 2010), Báo cáo tài kiểm tốn PECC1, (2010), Báo cáo phịng nhân cơng ty PECC1 Website www.pecc1.com.vn 10 Website www.hnx.vn 11 Phạm Lan Anh (2006), Quản trị chiến lược, NXB Khoa học kỹ thuật 12 Phạm Văn Được, Đặng Thị Kim Cương (2008), Phân tích hoạt động kinh doanh, NXB Tổng hợp tp.HCM 13 Nguyên Thảo, Trung Nguyên (2009), Quản trị kinh doanh, NXB Lao động xã hội 14 Tôn Thất Nguyễn Thiêm (2008), thị trường, chiến lược, cấu: cạnh tranh giá trị gia tăng định vị phát triển doanh nghiệp, NXB Trẻ 53 APPENDIX QUESTIONAIRE This survey is conducted by a group of MBA students to complete their capstone project submitted as partial requirement for the degree of Master of Business Administration at the Griggs University The purpose of the survey is to gather assessment of experts to formulate business strategy for PECC1 To make the acquired information secret, your response will be kept confidential Your answer will be combined with those of other respondents Your help is vitally important for us to obtain a valid result of the study Thank you so much for your support I Please kindly select among these below factors that you assess as the key success factors (KSF) for PECC1 in compare to other competitors in the industry of power engineering consulting: # Criterions Market Share Service quality and differentiation Procurement R&D Customer relation Brand name & loyalty Human resource Financial capacity Motivation, Leadership & corporate culture KSF Note 54 II Please kindly evaluate the following factors related to the operation of several Power engineering consulting companies mentioned below according to criterions in the table by scale 1-10 (higher mark means better service) PECC1 # Criterions Market Share Service quality & differentiation Procurement R&D Customer relation Brand name loyalty Human resource Financial capacity Motivation, Leadership & corporate culture PECC2 PECC3 PECC4 IE Fichtner Poyry & 55 APPENDIX PECC1, ACHIEVEMENTS AND REWARDS • Labor Hero in the renewal process in 2005 • A Second - Class Independent Medal in 1994 • 30 Labor Medals including the first, second and third grade • 245 Diplomas of Merit from Primer Minister, Ministries and Sectors • Triumphant banners of occasion from Government and EVN 56 APPENDIX SOME TYPICAL PROJECTS COMPLETED BY PECC1 Hoa binh Hydropower Project: Labor medals of the third grade in1983, 1984, 1985, 1986, 1987, 1989, and 1995 North- South 500KV high voltage transmission line (circuit 1): Second- class Independent medal in 1994, labor medals of the First and Second grades in 1994 Yaly Hydropower Project: Labor medal of the third grade in 2002 Song Hinh Hydropower Project: Diplomas of merit and Triumphant banners of occasion from Primer Minister Pleyku-Phu lam, Pleyku-Doc soi-Da nang and Ha tinh- Nho quan- Thuong tin 500KV high voltage transmission line: Labor medal of the third grade in 2006, Diploma of merit from Prime Minister 2006 57 APPENDIX PECC1- CAPABILITY OF INVESTIGATION EQUIPMENT, TESTING I II II-1 II-2 II-3 II-4 Name of equipments Quantity TOPOGRAPHY Leveling apparatus- NA Total station (NIKO, LEICA) Electinic theodolite Receiver GPS-trimble GEOLOGY DRILLING MACHINES Long year 38 CKB-4 Nl26 GX,XY,XJ Sample testing drilling machine Rock hydraulic drilling machine GEOPHYSICAL SURVEY STRATAVISOR- NZ 24 KAPOTA WELLMAKLI Electric detector ADITS Generators 7.5KVA Air compressors 10AT Pneumatic hammers LABORATORY Triaxial testing apparatus -55770(10Kg) CBR,JYE200,50-c46G2- Testing China compressive durability WE-3008-Testing compressive, China tensile durability MEBT-400-Testing China durability HS-40-Concrete absorbability LONGGANGELES-Grinding Italy USA machine Set of extensometers Device measuring density and Italy Italy compressive Manufacturers Japan Japan Japan USA France Russia Japan China USA Russia USA Sweden China China Canada China 58 10 11 humidity by radioactive Apparatus testing rock stresses Apparatus testing concrete setting Multipurpose tensile bending 12 13 machine 30 tones C430-Absorbability apparatus Thermometer Beckmann 82207(0- III 5oC) HYDROLOGY Depth echo- receiver Flow meter ADCP-WHR600 Velocity meter LS2S-1A China Italy Italy 59 PECC1- SOFTWARE OF CONSULTING SPECIALITIES NAME OF SOFTWARES GEO.SLOPE FEATURES SLOPE/W: Geotechnique of soil ORIGINE Canada SLEEP/W: Leakage SIGMA/ W: Stresses PLAXIS QUAKE/W: Seismic Geotechnique of Soil & rock, vision of Netherlands (DINAMICS users, 3D modulus 3D FOUNDATION, 3D TUNNEL) ContesPro Solvia Thermal analysis Sweden Static and dynamic analysis of concrete Sweden Microstation gravity dam 3D topographical mapping USA (GeaPak Site GeaPak Survey Inter Plot) MIKE 11 HD: Hydraulic modeling, GT, ST & ACS, Demark PHASE 26.0 reservoir sedimentation Stresses in rock mass, Tunneling supports and rock slopes SWEDGE & ROCK- Sliding stability PLANE 2.0 Examine 3D4.0 Unwedge 3.0 FENAS E.F Auto CAD Auto Revit PSS/E PROMIS-E CDEGS STRUCAD EMTP-RV Canada Underground structures, 3D Canada Stability, consolidation of cupola and wall Canada of underground structures method for analysis of structures Canada Regime of electric power system Design Secondary electric power system Earth connection Architectures of power house Electromagnetic transition zone USA USA USA UK Canada 60 SISYFHE BOCAD STEAM PRO Analysis of power load curve France Design in detail of steel structure Belgia Computation of steam cycle of thermal USA power project 61 ... this paper successfully Special thanks to all of the lectures and staff at Global Advanced MBA program (GaMBA), Vietnam National University There are not enough words to describe your excellent