MARKET DEVELOPMENT STRATEGY FOR REAL ESTATE BUSINESS OF FPT CORPORATION IN THE SOUTH-EAST OF VIETNAM DURING 2012-2016

INTRODUCTION

RATIONALE OF STUDY

FPT Corporation, a leading private company in Vietnam, has consistently ranked among the top five in recent years Originally established as a government entity in 1988, FPT transitioned to a private company in 2001 and was subsequently listed on the Ho Chi Minh Stock Exchange (HOSE) in 2006 Renowned as a prominent ICT company in Vietnam, FPT boasts several core competencies that contribute to its success.

- Software development outsourcing services: Focus on Japanese market and

EU, America recently FPT is the biggest player in this area in Vietnam today

- Informatics System Integration: Provide system integration for domestic market (Government Agency and B2B business) This is very strong competence of FPT and FPT is market leader

- Telecommunication services: Provide Internet and ADSL services, IP Phone, Game online, social network as www.banbe.vn, online magazine as www.vnexpress.net or www.ngoisao.net , etc

- Education: FPT University especially focuses on Informatics science

Informatics and telecom equipment trading is a crucial sector for FPT Corp, significantly contributing to the company's annual revenue As one of FPT's traditional business areas, it plays a vital role in the organization's overall success.

After a decade of development, FPT achieved significant milestones in its core business by 2006, with an impressive average annual revenue growth rate of 60%-70% from 2002 to 2006, mirroring its profit growth With this strong performance, FPT accumulated surplus capital and chose to diversify into new business sectors However, despite years of investment in short-term services, FPT faced an uncertain long-term financial position due to a lack of long-term investments and assets on its balance sheet, potentially raising concerns among investors regarding the company's market value growth opportunities.

Therefore, FPT joined into real estate market in the end of year 2006

In 2006, FPT made a significant investment in a major real estate project in Da Nang, known as FPT City Da Nang Spanning approximately 181 hectares, this extensive development is representative of a medium-sized town in Vietnam.

The Vietnamese real estate market experienced significant prosperity in 2007; however, it has faced a recession since 2008, leaving many newcomers struggling, including FPT's real estate business, which has not been immune to these challenges.

FPT remains committed to its real estate ventures, despite facing challenges and a negative perception in the market While the FPT City Da Nang project stands out as a significant achievement, the company's real estate operations are largely on hold as it monitors opportunities in Vietnam's key markets, Hanoi and Ho Chi Minh City The launch of FPT City Da Nang marks a crucial milestone for FPT as it navigates the competitive and risky landscape of the Vietnamese real estate sector.

The question of whether FPT Corporation can succeed in the real estate market remains a significant challenge, as the company currently lacks a clear strategy or concrete plans for this sector Despite this ambiguity, FPT continues to invest in real estate, albeit with uncertain returns anticipated in the near future Therefore, conducting a thorough study is essential for FPT to make informed decisions regarding its real estate ventures.

PROBLEM STATEMENT

In Vietnam, land is considered a national resource, making it a crucial asset for businesses due to its limited availability Companies that secure land ownership face both significant opportunities and risks; during market growth, they can rapidly increase their value, while economic downturns can lead to substantial losses Despite these challenges, investing in real estate in Vietnam remains a vital and profitable avenue, particularly when viewed from a medium to long-term perspective.

In late 2006, FPT entered the real estate market amidst a vibrant economic landscape, where many players were reaping substantial profits However, as a newcomer, FPT struggled with a clear business direction and lacked a strong understanding of its core competencies in this competitive arena The subsequent economic crisis adversely impacted the real estate sector, leading to a contraction over the following years As a result, FPT's real estate ventures have stagnated, leaving them at a standstill in this market.

FPT's entry into the real estate market is significant, yet it appears that the company has not adequately prepared for this venture This oversight has resulted in critical challenges, prompting essential questions about their strategy: "What steps can FPT take to succeed in the real estate sector?" and "How can they effectively develop and sustain this new business in the near future?"

Southern Vietnam, particularly Ho Chi Minh City (HCMC) and its surrounding areas, serves as a key economic hub with dynamic growth potential FPT has been active in the real estate sector in HCMC since 2007, anticipating that this region would offer valuable pilot opportunities due to its vibrant market Despite the current economic crisis leading to a slowdown in the Southern real estate market, it still holds significant growth potential For FPT to replicate its success in real estate as it has in other sectors, a thorough examination of the Southern Vietnam real estate market is essential.

Therefore, this study project is to formulate the market development strategy for FPT real estate business in period 2012 – 2016 in South-East of Vietnam

Specially, this study is to concentrates:

- To evaluate External and Internal environment of FPT Land

- To create Strategy options and defined suitable one for FPT Land

- To recommendation idea to successful in implementation strategy

That is reason why this study needs to answer question as below:

- How can FPT enter to these emergent areas?

- What are kinds of real estate product that FPT should invest?

- What are core concepts of products that FPT should determines to coherence with strategy of FPT in corporation level?

SCOPE AND LIMITATION OF STUDY

This study analyzes the current environment of FPT Corporation to develop a strategic market plan for its real estate business over the next five years However, it is important to note that the study's focus is limited to the South-East region.

STUDY FRAMEWORK

This study is to solve business problem Thus the chosen methods must comply with objectives of study as formulating strategy in the 1.2 The study framework formulated as below:

- Collect second data and analysis

- Conduct in-deep interview with experts and managers of company

This paper analyzes secondary data on micro and macroeconomic environments, employing Michael Porter’s five forces model to assess the external factor evaluation (EFE) matrix Additionally, it utilizes the Resource-Based View method to evaluate the internal factor evaluation (IFE) matrix.

After building EFE and IFE matrix is combination of EFE matrix and IFE matrix into SWOT matrix and evaluate factors of SWOT matrix

Last step of this research is use Quantitative Strategic Planning matrix to evaluate strategies and make a choice of suitable strategies for the firm

All above step flow to framework of comprehensive strategic management model by David (1988)

STRUCTURE OF RESEARCH

This study comprises six chapters, beginning with an introduction to the research rationale, problem, objectives, and questions The second chapter offers a literature review on strategy formulation concepts and definitions Chapter three analyzes external factors impacting FPT's real estate business in the Southeast Vietnam market Chapter four presents an overview of FPT Corporation and its real estate operations, followed by an internal factors analysis and SWOT assessment The fifth chapter proposes a suitable strategy for FPT to enhance its market presence in Southeast Vietnam Finally, the concluding chapter summarizes the findings and provides recommendations for successful strategy implementation.

LITERATURE REVIEW

STRATEGY AND STRATEGIC MANAGEMENT

In contemporary discourse, strategy and strategic management are defined in various ways; fundamentally, strategy can be understood as a long-term action plan aimed at achieving specific goals Alternatively, it can be described as a method or plan selected to realize a desired future, whether that involves reaching a particular objective or solving a problem.

Strategies of organization are things related to actions of organization that aims to pursue firm’s targets

Strategic management involves significant directional shifts for businesses, aligning with their unique objectives These objectives are essential for a company's ongoing operations and serve as a roadmap for its future However, as the business environment and activities evolve, companies must adapt to these changes This dynamic interplay between internal goals and external conditions compels organizations to adjust their strategies to remain competitive and responsive to market fluctuations.

Successful companies align their strategies with the specific circumstances they encounter, ensuring they are feasible given their resources and capabilities, and appealing to their stakeholders Essentially, an effective strategy focuses on the compatibility between an organization’s resources and its target market, while also maintaining this alignment over time and amidst changing conditions.

In summary, strategic management does not only aim to establish and build strategy of company but must drive strategy in coherence with the business circumstance also.

TYPE OF STRATEGIES

Based on purpose of strategy, Fred R David (2009) categorized the strategies into 11 types of alternatives strategies that enterprise could pursue They are:

3 John L Thomson; Frank Martin (2005), Strategic management the 5 th edition, Thomson Learning,

UK forward integration; backward integration; horizontal integration; market penetration; market development; product development; related diversification; unrelated diversification; retrenchment; divestiture and liquidation

Forward integration, backward integration, and horizontal integration are often grouped under the term vertical integration, enabling companies to enhance their control over suppliers, distributors, and competitors Additionally, market penetration, market development, and product development are collectively known as intensive strategies that help firms increase their market share against competitors.

Related and unrelated diversification are two key strategies for expanding a business's scope and managing risk These approaches enable firms to grow their operations by either entering new markets that are connected to their existing products or services, or by venturing into entirely different industries.

The last three strategies—retrenchment, divestiture, and liquidation—are considered defensive strategies for firms These approaches help organizations mitigate market threats and address internal weaknesses, ultimately enhancing their competitiveness through restructuring efforts.

Michael Porter (1985) identified three primary bases for an organization's competitive advantage: cost leadership, differentiation, and focus He categorized these approaches into three generic strategies: cost leadership strategy, differentiation strategy, and focus strategy.

A cost leadership strategy aims to offer products at low unit costs, catering to price-sensitive customers and driving sales volume This approach includes two alternative strategies: the low-cost strategy, which focuses solely on minimizing costs, and the best-value strategy, which balances cost with quality to provide superior value.

A differentiation strategy focuses on creating unique products or services that stand out in the market and are challenging for competitors to replicate This approach targets customers who are less sensitive to price, emphasizing quality and distinctiveness over cost.

A focus strategy involves creating products tailored to the specific demands of a targeted customer group It can be categorized into two types: low-cost focus strategy and best-value focus strategy This approach is particularly effective when customers have unique performance requirements, and competitors are not actively entering the market segment Companies aiming to penetrate or develop a market are advised to adopt a focus strategy for optimal results.

In this paper, generic strategy concept was applied to formulate alternative strategies for FPT.

STRATEGIC MANAGEMENT PROCESS

In strategic management, there are two primary approaches: the prescriptive approach and the emergent approach The prescriptive approach focuses on aligning a company's external environment with its internal capabilities to enhance its market position, product offerings, and organizational structure Conversely, the emergent approach acknowledges that the final objectives may be uncertain, allowing for the strategy to evolve as it unfolds (Tsutomu Mishina, 2004).

One of popular prescriptive approach model of strategic management process is a comprehensive strategic-management model (David, 1988)

Figure 2.1: A Comprehensive Strategic management model

Source: Fred R David, “Strategic Management concept and case” (2009): page 47

To effectively formulate and implement a strategy for a firm, seven key steps must be followed: (1) conduct an audit of external environmental factors to identify opportunities and threats within the industry; (2) assess internal resources and environmental factors to determine the firm's strengths and weaknesses; (3) establish long-term objectives; (4) develop alternative strategies and select the most suitable one; (5) address management issues during strategy implementation; (6) execute the strategy across various functions such as Marketing, Finance, Accounting, and R&D; and (7) measure and evaluate the performance of the chosen strategy This structured approach is illustrated in the comprehensive strategic management model.

This paper utilizes a model to address study-related challenges, emphasizing the significance of auditing both the external and internal environments Based on these audits, a SWOT matrix is developed, serving as a foundation for formulating alternative strategies for the firm.

A clear and suitable vision is crucial for guiding an organization's business direction, while an inappropriate vision can lead to misalignment and confusion It is essential for managers and executives to reach a consensus on the long-term vision the company aims to achieve A well-defined vision statement effectively addresses the question, "What does the company want to become?" By establishing a clear vision, a company lays the groundwork for developing a comprehensive mission, ultimately fostering growth and success.

A well-crafted mission statement serves as a clear response to the question, "What is the organization's business?" while also addressing the values the organization aims to promote for its stakeholders.

A well-defined vision and mission statement can significantly benefit an organization by serving as essential documents for strategic management These statements guide the organization in setting specific targets based on its objectives and desired outcomes, while also outlining the methods to achieve these goals within a defined timeframe.

The creation of a clear vision and mission is essential for founders and leaders, as well as all members of the organization A deep understanding of these guiding principles fosters a sense of belonging and shared responsibility among employees, aligning their dreams, passions, and beliefs This collective commitment enhances organizational activities and maintains focus on achieving common goals.

A company's vision and mission statements serve as long-term guides, but they should not remain static To remain relevant in a changing economy, these statements must be regularly reviewed and updated Particularly during economic downturns, companies should reassess their visions, while also considering adjustments during prosperous times to ensure continued alignment with their goals and market dynamics.

Strategists hold the primary responsibility for crafting a company's vision and mission, which serve as essential guiding principles, much like a compass for a sailor These statements provide the initial insight into the company and communicate its core values to stakeholders, helping to distinguish it from competitors.

Companies operate within specific economic and social environments, which significantly impact their business activities The environment of an enterprise is categorized into internal and external factors Analyzing a company's environment involves auditing each element that influences its operations and overall success.

The primary goal of an external audit is to identify a limited set of opportunities that can benefit a firm and threats that should be avoided Instead of attempting to compile an exhaustive list of every potential factor affecting the business, the external audit focuses on key variables that allow for actionable responses Companies can then devise strategies to either capitalize on external opportunities or mitigate the impact of possible threats (David, 2009).

According to David (2009), five key external factors influence businesses: economic forces, social and cultural demographic forces, political and legal forces, technological forces, and competitive forces These factors can be categorized into two groups: macroenvironment elements, which include the first four forces, and microenvironment elements, represented by competitive forces Analyzing the external environment leads to identifying the opportunities and threats that businesses face, often summarized in an external factors evaluation matrix.

2.3.2.1: Macro Environment Analysis Economic factors: This mentions about behavior and certain market interest rate; inflation; money exchange rate; taxation changes and economic growth These elements affect to profitable; economic benefit and expected growth of organization business

Social, cultural, demographic, and natural factors significantly impact the demand for a company's products, customer behavior, and workforce dynamics These social elements can either enhance or hinder a company's competitiveness in the market.

Political, government, and legal factors play a crucial role in shaping the economic landscape A stable political environment and a robust legal system provide significant advantages for businesses in their planning and operations When the government prioritizes specific industries, it creates additional opportunities for companies engaged in those sectors to grow and thrive.

ANALYSIS OF FPT’S REAL ESTATE BUSINESS’S EXTERNAL

MACRO ENVIRONMENT ANALYSIS

This section analyzes macro environment of real estate business of FPT Following topics will analyze deeply macro environment factors affecting to this business of FPT

Vietnam has maintained a stable political environment for several decades, providing a favorable backdrop for long-term investments in the real estate sector Since the economic reforms initiated in 1986, Vietnam has transitioned from a centrally-planned to a market economy, a period referred to by the government as the transitional phase Despite over 25 years of this transition, Vietnam is still classified as a non-market economy by many, although the Vietnam Chamber of Commerce and Industry (VCCI) reports that 23 countries recognize its market economy status Nevertheless, Vietnam continues to make significant strides towards fully embracing a market economy each year.

The real estate sector in Vietnam has garnered significant attention from the government over the past two decades due to its crucial role in the economy and its influence on investment activities Following the economic reform in 1986, Vietnam saw limited changes in land property regulations until the approval of the first Land Law in 1988, which focused on governing agricultural land use In 1993, the National Assembly ratified the revised Land Law, which officially recognized private land ownership for the first time, establishing land property rights as marketable assets.

In 2003, the Law of Land amended and had been effective until now

10 See appendix 1: List of countries that recognized Vietnam as market economic until 10/2011

On 29 th November 2005, the Vietnam Law on House was approved by National Assembly and took effect on 1 st July 2006 To go along with procedure of housing law, on 21 st June 2006, Vietnam National Assembly passed the law of real estate business and this law took effect on 1 st January 2007 Under this law, individuals, organizations, foreigners and overseas Vietnamese (the Vi t ki u) are authorized to offer real estate services including brokerage and agency, appraisal, marketing, and consultancy Last but not least, on 18 th June 2009, the Law on house and the Law of Land were amended by National Assembly These amendments are important with the real estate market in Vietnam because they open more for overseas Vietnamese to have change to own hose and use residential land in Vietnam Things did not happen in the past of Vietnam (in Socialism Republic) officially The conditions to have the right to own house of overseas Vietnamese became easy and clearly and the right to use residential land of them were established This was first time that the right to own house and use residential land of overseas Vietnamese are non- discrimination beside domestic citizens

Over the past two decades, the Vietnamese government has increasingly prioritized the real estate market, implementing a range of laws to support its development The government aims to establish a comprehensive legal framework that encourages growth in this sector Despite having a variety of laws governing real estate, the enforcement and adaptability of these regulations remain insufficient Consequently, the effectiveness of the legal system related to real estate is low, indicating that further changes and improvements are likely in the near future.

Figure 3.1: History of legal about Land and REB in RSV

Source: Collected information from NA of SAV: www.na.gov.vn

The current state of land law and real estate regulations is incomplete, leading to ongoing debates regarding property rights As discussions evolve, potential changes to these laws may impact the real estate sector in the coming years This uncertainty poses a significant threat to the real estate business, which relies heavily on stable legal frameworks for long-term success.

This section regard to demography, urbanization, housing and trend of migrant in both Vietnam and South-East

As of 2009, Vietnam's population reached 87 million, characterized by a youthful demographic The country is home to approximately 23 million households Over the past decade, urbanization has surged, leading to a significant increase in the urban population across six distinct regions in Vietnam.

Figure 3.2: Urban population divided to geographic region (in million)

(Source: Population statistic of Vietnam 2009-2010, www.gso.gov.vn)

Figure 3.2 illustrates that the Southeast region of Vietnam, including Ho Chi Minh City, has consistently had the highest urban population in the country for many years This area has been the most dynamic in Vietnam and continues to play a leading role in the nation's economic market The population growth in this region is primarily driven by immigration.

The South-East region of Vietnam comprises six provinces, with Ho Chi Minh City (HCMC) serving as the political and economic hub Alongside Dong Nai and Binh Duong, these three provinces form a significant economic triangle in Southern Vietnam, playing a crucial role as a key market not only in the South but also within the entire country.

The southeastern region of Vietnam, particularly Ho Chi Minh City, Dong Nai, and Binh Duong provinces, has long been recognized as a hub for industrial parks and the financial market These areas are home to some of the earliest industrial parks established in the country, playing a crucial role in Vietnam's economic development.

In 1986, the Mekong Delta experienced significant industrial growth, with manufactories in industrial zones creating numerous job opportunities for young laborers in Vietnam These industrial parks became attractive hubs for youth seeking employment, prompting migration from Northern, Central, and Mekong Delta provinces to Ho Chi Minh City and its surrounding areas This trend of immigration to Southeast Vietnam has persisted for over two decades, playing a crucial role in the region's urbanization.

The population of the South-East region of Vietnam is rapidly increasing each year, while the proportion of urban residents has remained stable over the past 15 years According to Figures 3.2 and 3.3, this region has experienced the fastest population growth in Vietnam, with the highest urbanization rate in the last decade compared to other regions.

Figure 3.3: The ratio of urban population in regions of Vietnam

(Source: Population statistic of Vietnam 2009-2010, www.gso.gov.vn)

The demographic landscape of the South-East region is marked by significant inequality, particularly among its six provinces Despite covering only 9% of the region's total area, Ho Chi Minh City (HCMC) is home to 51% of its population, highlighting a stark urban concentration where 74% of the region's urban residents reside in HCMC.

South-East Red River delta Northern Midland

Middle Shore Highlands Mekong Delta

The urbanization trends in Southeast Asia vary significantly among provinces, with Ho Chi Minh City (HCMC) experiencing rapid growth HCMC's urban population is not only substantial in size but also expanding quickly due to enhanced infrastructure and a significant influx of immigrants from other provinces.

Figure 3.4: Scale of urbanite in provinces of South-East Vietnam

(Source: Population statistic of Vietnam 2009-2010 www.gso.gov.vn )

The rapid urbanization and high population density in Ho Chi Minh City (HCMC) have led to significant infrastructure strain, resulting in challenges such as traffic congestion, pollution, and inadequate health, education, and housing services This overburdened infrastructure negatively impacts the quality of life in HCMC, prompting a trend towards investment in suburban areas and nearby provinces like Thu Thiem, District 9, Binh Duong, and Dong Nai The development of new satellite cities around HCMC aims to alleviate the urbanization pressures experienced over the past decade.

The Southeast region of Vietnam, encompassing Bình Phước, Tây Ninh, Bình Dương, Đồng Nai, Bà Rịa - Vũng Tàu, and Ho Chi Minh City, exhibits varying population densities across its provinces This demographic analysis highlights the significant pressure on infrastructure in Ho Chi Minh City, stemming from its rapid urbanization and population growth.

Table 3.1: Demography density of South-East region

No Province Area (Km2) Population

(Source: Population statistic of Vietnam 2009-2010 www.gso.gov.vn )

MICROENVIRONMENT ANALYSIS

3.2.1: Real estate market over view

Since 1993, the Vietnamese legal system has officially recognized land and land use rights as exchangeable goods in the market Prior to this, an unofficial market for land existed long before the legal acknowledgment The Law of Land 1993, along with its subsequent revisions, was enacted by the National Assembly to formalize and regulate the real estate market in Vietnam.

The recognition of the legal system in Vietnam from 1993 to 1995 spurred rapid growth in the real estate market, significantly increasing housing prices and residential land values This marked the first real estate boom in the country, which, however, resulted in an imbalanced investment structure and potential issues within the banking and monetary systems In response, the government implemented administrative policies to regulate the market Additionally, the Asian financial crisis of 1997-1998 further impacted investment activities in Vietnam, contributing to a downturn in the sector.

1996 to the end of 2000, the real estate market was frozen The time from 1990 to

2000 was ten years of rudimental phase of real estate market of Vietnam Until year

2000, there were approximate 200 real estate companies in whole market only (see Figure 3.8)

From 2001 to 2003, Vietnam experienced a second real estate boom driven by economic recovery following the 1997 crisis and the 2001 commercial agreement with the United States, which revitalized investment flows into the market The implementation of the Law of Land 2003 further enhanced property rights, stimulating market growth However, this period was characterized by speculative transactions, with most successful deals involving residential land in new projects converted from agricultural land, often lacking adequate infrastructure Consequently, the market growth during this time can be classified as a bubble.

In an effort to manage the market's inflationary trends, the Government has implemented a policy prohibiting the sale of residential land within real estate projects Real estate companies must now focus on selling completed houses to consumers, rather than land This means they are required to construct houses on land they have purchased or leased from the state Consequently, land rights in real estate projects are now viewed as essential assets for real estate operations rather than commercial commodities.

The market felt down again from 2004 to end of 2006 This is second time of recession of real estate market

In late 2006, Vietnam's stock market experienced a significant boom, fueled by a surge in foreign direct investment (FDI) following the country's accession to the WTO This led to a revitalization of the market, with a notable growth phase occurring from 2007 until mid-2008 During this time, the real estate market saw a rapid increase and diversification of products, primarily featuring luxury apartments, villas, and townhouses, largely driven by major real estate projects concentrated in dynamic regions such as Hanoi, Ho Chi Minh City, Da Nang, Dong Nai, Long An, and Binh Duong Despite the soaring prices of these properties, which created a substantial gap between average incomes and property costs, most investment capital was sourced from the banking system Additionally, a new lifestyle emerged among Vietnamese youth, who began to favor apartment living over traditional houses or townhouses, further propelling the growth of the apartment market.

The global financial crisis, coupled with vulnerabilities in the real estate market, an imbalanced banking structure, and a declining stock market, led to the real estate sector experiencing its third recession since the end of 2008.

Real estate market was dynamic in period from 2006 to 2008 All market segments appeared in this time Some of them were new segment on the market

According to practice of market, real estate market of Vietnam can divide in to segments:

Household resident land is a unique asset owned by families, primarily located in established towns This land has served as a long-term living space, reflecting the significance of residential stability and community roots.

 Segment of Resident land in new urban projects: it is new land area for resident purpose

 Segment of Townhouse: Houses from real estate project of developers

The pricing range of products is categorized into four sub-segments: low price, middle price, high price, and luxury However, classifying concrete products within these sub-segments can be challenging due to the lack of standardized pricing criteria.

Over the past decade, Vietnam's real estate market has evolved into its third phase of maturity, transitioning from a centralized phase to the monetization stage Currently, a significant portion of investment capital is sourced from banks and financial institutions.

Vietnam's real estate market is currently experiencing its fourth recession, with little positive economic support for recovery in the near future Historically, market trends suggest that growth may not resume until at least the end of 2013.

Figure 3.7: 20 years development of real estate market in Vietnam

Figure 3.8: Number of real-estate enterprise from year 2000 to 2009

Source: www.gso.gov.vn

Table 3.5: Contribution of real estate industry to whole economy of Vietnam in nine years at the beginning of 21 century

Contribution of real estate industry to whole economy

Reve- nue Profit Tax paid

Year 2000 0.47% 0.32% 2.39% 5.11% 0.37% -1.85% 0.75% Year 2001 0.58% 0.35% 2.49% 5.11% 0.45% -0.79% 0.64% Year 2002 0.70% 0.39% 2.59% 4.76% 0.62% 0.93% 0.74% Year 2003 0.77% 0.36% 2.47% 4.17% 0.70% 1.60% 0.76% Year 2004 0.89% 0.36% 2.42% 3.95% 0.72% 2.24% 1.16% Year 2005 1.03% 0.46% 2.64% 3.94% 0.78% 2.80% 1.81% Year 2006 1.21% 0.50% 2.64% 3.37% 0.72% 2.50% 1.47% Year 2007 1.38% 0.51% 3.29% 3.82% 0.78% 3.09% 1.23% Year 2008 1.55% 0.63% 4.85% 6.14% 0.78% 3.77% 1.64%

Although there are many unstable factors of development of real estate market in Vietnam this is developing and promising market

The rapid growth in the real estate market over the past decade, particularly between 2000 and 2008, has led to the establishment of numerous profitable real estate enterprises.

Combining the Figure 3.8 and Table 3.5, the trend showed that investment to real estate industry was a real promising business activity in period from year 2005 to

The rapid growth of the real estate industry in Vietnam has resulted in a significant disparity between its increasing number of enterprises and their contribution to total economic revenue, which remains lower than the profit generated This indicates that the real estate sector is characterized by high profit margins within the Vietnamese economy Furthermore, there exists a correlation between the long-term investment contribution rate, capital resources, and the profit efficiency of real estate businesses, aligning with overall economic investment trends.

The real estate market in Southeast Vietnam has been the most dynamic sector over the past twenty years, particularly during periods of economic growth Major projects are primarily concentrated in the central region, especially in Ho Chi Minh City (HCMC), where new urban areas like Phu My Hung have emerged during this time.

During the booming market period, Ho Chi Minh City resembles a vast construction site, with numerous buildings rising from the Central Business District to rural areas This real estate investment wave has also spread to neighboring regions, including Binh Duong and Dong Nai provinces.

Ho Chi Minh City (HCMC) faces significant infrastructure strain due to its high population density, particularly in the Central Business Districts As the economic hub of southern Vietnam, HCMC experiences elevated housing and land prices that exceed the average affordability of residents This challenging situation has given rise to a new trend in living arrangements.

SUMMARY OF COMP ANY’S OPPORTUNITIES AND THREATS

The Southeast Region is experiencing a significant demand for affordable townhouses due to a growing young population and rapid urbanization However, this high housing demand is met with low purchasing power among customers, leading to a mismatch between housing demand and supply, as market prices remain elevated.

 There is a trend of migrant from center of HCMC to suburban and vicinity town of HCMC because of overload infrastructure of HCMC

The congested and chaotic traffic in major cities like Ho Chi Minh City has created significant pressure on both central and local governments In response, there is a growing interest in investing in transportation infrastructure, including highways and metro systems This trend not only addresses current traffic challenges but also supports the migration of populations from urban centers to neighboring towns.

The ongoing freeze in the real estate market has led to a significant decrease in land prices, creating valuable opportunities for buyers seeking affordable housing This shift allows for a potential narrowing of the gap between demand and supply prices, making homeownership more accessible than ever.

Vietnam's economic growth is expected to remain robust in the medium term, creating favorable conditions for attracting foreign direct investment (FDI) This trend presents significant opportunities for collaboration between domestic companies, which possess valuable land resources, and foreign investors, who bring essential capital.

 New technology of building material (like unbaked material) and construction will save cost and time to deploy real estate project

The majority of real estate offerings in Southeast Asia cater primarily to residential demand, highlighting a significant gap in products focused on living space and quality of life This presents a unique opportunity for differentiation strategies, making it an attractive prospect for new entrants in the real estate market who recognize this demand.

The government is promoting a new type of real estate that emphasizes energy efficiency, environmental friendliness, and green urbanization This shift presents opportunities for new entrants who are knowledgeable about contemporary living trends.

 There are opportunities to merge and acquisition (M&A) with other players, who is being stuck on the market due to crisis

 Vietnamese Government reinforces in management of real estate market It aim to reduce speculating transaction on the market and create sane environment for real estate market

Access to bank loans for real estate business activities has become increasingly restricted, creating challenges not only for investors seeking to operate their businesses but also for customers with genuine needs to purchase homes for living purposes.

The current economic landscape is marked by an unusually high cost of debt, ranging from 22% to 26% per year, which has deterred investors from seeking profits and significantly reduced the number of individuals able to borrow money for home purchases.

The legal framework governing land and real estate is set to undergo significant changes in the near future Currently, it lacks stability and is heavily influenced by the perspectives of local government authorities.

Incumbent government officials in local administrations significantly influence town planning, leading to instability in long-term strategies Each new chief introduces their own plans, resulting in frequent changes and a lack of continuity in urban development.

Obtaining an investment license from local government can be a lengthy process, often characterized by an unstable submission schedule Investors frequently find themselves waiting for extended periods and may need to amend their documents multiple times.

Due to ineffective national land use planning, agricultural land is diminishing, leading to significant failures in land resource management As a result, securing land for residential purposes has become increasingly challenging.

The real estate market is experiencing a significant slowdown, leading to low liquidity and increased pressure on companies facing potential bankruptcy This situation poses challenges not only for existing players but also creates psychological barriers for new entrants looking to enter the market.

EXTERNAL FACTOR EVALUATION MATRIX

The external factor evaluation (EFE) will be developed based on a comprehensive analysis of the company's opportunities and threats, assessing its responsiveness to both micro and macro environmental factors Each opportunity and threat will be assigned a weight from 0.0 (not important) to 1.0 (very important), reflecting their relative significance in achieving success within the real estate industry This weighting system is specifically tailored to the industry's unique dynamics.

Each key factor of opportunities and threats is assigned a rating between 1 and

4 The rating indicates how effectively the firm’s current strategy responds to the factor, where 4 = response is superior, 3 = response is above average, 2 = the response is average and 1 = response is poor The weigh are collected from interview directly with expert of real estate business inside and outside of FPT Corporation to make external factor evaluation matrix more objective

Table: 3.9 External Factor Evaluation (EFE) Matrix of FPT

No Key External Factors Weight Rating Score

- It is large demand of housing, especially demand of tow house, which is house and land attached because of young population and high speed of urbanization in South-

- There is a trend of migrant from center of

HCMC to suburban and vicinity town of

HCMC because of overload infrastructure of

- Crowded and chaotic traffic in big city as

Ho Chi Minh City (HCMC) is facing pressure from the central government to enhance local infrastructure, particularly in transportation, such as highways and metro systems This focus on improving transportation infrastructure aligns with the growing trend of population expansion from major urban centers to neighboring towns.

- Price of Land is cheaper and cheaper because of frozen real estate market This is opportunities for buyers, who want to own his house with low expensive than normal

- Vietnam economic growth will still high rate within medium-dated and this condition is advantage to attract capital from FDI flow

This trend creates opportunities to co-op between domestic companies and foreign investors

- New technology of building material (like unbaked material) and construction will save cost and time to deploy real estate project

- There is lack of popular product in

South-East concerned about living space and living condition Therefore, there are opportunities to think about strategy to serve this demand

The government is promoting a new type of real estate product that emphasizes energy efficiency, environmental friendliness, and green urbanization This shift presents opportunities for industry players who are knowledgeable about sustainable living styles.

- There are opportunities to merge and acquisition (M&A) with other player, who is standstill because of crisis

- Vietnamese Government reinforce in management of real estate market It aim to reduce speculating transaction on the market and create sane environment for real estate market

Access to bank loan resources for real estate business activities has become increasingly restricted, creating challenges for both investors and customers Investors are facing a scarcity of capital to support their operations, while individuals with genuine housing needs are struggling to secure financing for purchasing homes.

The current economic climate is characterized by an unusually high cost of debt, with interest rates ranging from 22% to 26% per year This situation has deterred investors from seeking profits, resulting in a significant decline in the number of individuals able to borrow money for home purchases.

The legal framework governing land and real estate is set to undergo significant changes in the near future This system is currently unstable, with its functioning heavily influenced by the perspectives of local government authorities.

Incumbent government officials in local administrations significantly influence town planning, as new leadership often brings new strategies This constant change in management leads to instability in long-term urban planning efforts.

- It takes a long time to submit investment license to local government and most of case, submitting schedule is not stable

Investors have to spend time to wait, amendment document multi times

- Because of unsuccessful master plan of

National land using, the land for agriculture purpose is narrowing, many failed in land resource management so opportunities to have land for resident is harder and more difficult

The real estate market is currently experiencing a freeze, characterized by low liquidity, which is placing significant pressure on real estate companies facing potential bankruptcy This situation not only creates challenges for existing players but also serves as a psychological barrier for new entrants looking to enter the market.

The total weighted score of the External Factor Evaluation (EFE) matrix for FPT is 2.91, slightly above the average score of 2.5, indicating a positive response to industry opportunities and threats While FPT is recognized as a leader in Vietnam's ICT sector, it lacks experience in the real estate market, presenting a potential opportunity for expansion However, with a score below 3, there remains significant potential for FPT to enhance its strategies, allowing for a more effective response to external factors and an improved weighted score.

ANALYSIS OF INTERNAL ENVIRONMENT OF REAL ESTATE

INTRODUCTION TO FPT CORPORATION

FPT Corporation, established in 1988, is a leading player in Vietnam's ICT industry Founded by a group of 13 young scientists and state officers from the Technology Institute of the Ministry of Science and Technology, the company is currently led by its president, Mr Truong Gia Binh.

Initially, FPT focused on Food Processing Technology, addressing Vietnam's food insufficiency in 1988 Despite the pressing need for improved food products, FPT struggled to succeed in this sector and ultimately exited the food processing business in 1992.

In its second stage, FPT shifted its focus to trading activities, initially offering typewriters and computers from Olivetti, as well as servers and computers from Compaq and IBM During this period, FPT was a pioneer in the ICT equipment trading market in Vietnam From 1995 onwards, leveraging its position as a first mover, FPT established itself as a distributor and strategic partner for leading global ICT and telecommunications brands, including IBM, HP, Compaq, Acer, Samsung, and Nokia This evolution led to a rebranding of FPT to signify Financing and Promoting Technology Additionally, with the shift from ICT equipment trading and the opportunities presented by Vietnam's open economy, FPT diversified into various ICT sectors, including Information Integrated Services, software development, Internet service provision, and ICT education.

Until 2001, FPT operated as a small state-owned company in Vietnam's emerging ICT market In late 2001, FPT transitioned to a private company through securitization By the end of 2006, FPT was listed on the Ho Chi Minh Stock Exchange (HOSE), becoming a public company Today, FPT's stock is recognized as one of the blue-chip stocks in Vietnam's stock market.

Since 2000, FPT has pursued international expansion into markets such as the US, India, the EU, and Japan, primarily through software outsourcing services Despite facing numerous challenges and setbacks, a significant opportunity arose in 2003 with a partnership from a Japanese company, marking a pivotal moment for FPT's globalization efforts This year not only solidified software outsourcing as their key service but also paved the way for FPT to become a regional ICT service provider in Eastern Asia By 2006, FPT further diversified its operations into sectors like fund management, stock exchange, real estate, and banking, evolving into a multi-industry company Today, FPT categorizes its activities into core and non-core businesses, with core operations focusing on ICT and non-core activities primarily encompassing investments and real estate ventures.

In 2010, FPT unveiled a new logo, shifting from a representation of firmness to one of lissomeness, alongside a revised slogan and brand identity This transformation, referred to as the "Go Mass" objective, aims to enhance the widespread and deep market presence of FPT's products and services Figure 4.1 illustrates the before and after of FPT's logo, brand identification, and slogan.

Figure 4.1 Changing of identification factors of FPT

Sologan SUCCEED TOGETHER ENERGIZING LIFE

With two decades of growth and development, FPT has established itself as the second-largest non-state company in Vietnam, according to the VNR500 rankings since 2009 With a book capital value of approximately 5,400 billion VND and 215.9 million common stocks listed on the stock exchange, FPT's market value reached around 10,700 billion VND as of December 31, solidifying its strong position in the Vietnamese market.

FPT is a leading brand in Vietnam, primarily recognized for its ICT products and services Despite diversifying into other sectors, the FPT brand remains strongly associated with ICT, posing challenges in the real estate market where it recently entered As a newcomer in this industry, FPT faces a lack of expertise in real estate, which could hinder its success in this distinct market.

ORGANIZATION STRUCTURE OF FPT CORPORATION

FPT has structured its organization along two key dimensions: business field and geography, with the business field serving as the primary dimension As illustrated in Figure 4.2, the current organizational chart of FPT highlights its focus on various business areas Notably, the real estate sector is categorized under FPT Investment, as depicted in the chart below.

FPT has established subsidiary companies to manage various business sectors across Vietnam and international markets Depending on local business regulations, these subsidiaries either create branches or form independent legal entities to engage in the market FPT employs a unified organizational structure, known as the Fractal concept, which ensures consistency across all branches This fractal approach allows each entity within FPT to maintain a coherent structure while adapting to specific regional needs.

Corp is the same That is concept FPT when they organize their company by geography The typical structure of subsidiary company of FPT is shown in Figure 4.3

Figure 4.2 Organization chart by business field of FPT

Source: FPT Corporation annual repot 2010

Figure 4.3: A typical organization chart of subsidiary company of FPT

4.2.2 Corporation strategy and Management system

In 2010, FPT introduced its new corporate strategy, "One FPT," which serves as a comprehensive plan for the company from 2011 to 2024 This mega strategy encompasses three significant milestones set for the years 2014, 2019, and 2024, building upon FPT's prior strategic initiatives.

From 2005 to 2010, FPT implemented the E-Citizen strategy, aiming to lead in infrastructure development and e-services for the E-citizen community The company recognizes IT and telecommunications as crucial foundations for digital convergence, ensuring the delivery of convenient products and services to E-citizens This focus on enhancing digital accessibility is a key component of FPT’s development strategy.

The internet has fundamentally transformed the world, presenting Vietnam with a unique opportunity for global integration While essential human needs remain constant, the methods of fulfilling these needs have evolved significantly due to the internet's expansive influence E-services will play a crucial role in enabling organizations to compete effectively, enhancing comfort and convenience in daily life FPT's One FPT initiative outlines a clear strategy for success in the realm of E-social, as illustrated in Figure 4.4.

Figure 4.4: One FPT strategy and milestones

Source: FPT’s internal training document.

FPT recognizes that internet technology is increasingly essential not only for economic transactions but also for infrastructure and social development From its inception, FPT has articulated a vision that underscores this commitment.

FPT is dedicated to technological innovation and prioritizes customer satisfaction, aiming to contribute to national prosperity The company also focuses on creating a supportive work environment that empowers employees to achieve their professional and personal growth.

Source: FPT Corporation annual report, 2010

FPT's vision statement functions more like a mission statement, resonating deeply with current and former employees They recognize and believe in the company's unwavering commitment to its defined direction, which aligns with the essence of its vision statement.

To deploy One FPT strategy FPT listed one target and three directions and ten programs that FPT must do as showed in figure 4.4

 One target is One FPT way

 Three directions are three ways to achieve target of one FPT strategy,

(1) Go mass, (2) Synergy and (3) Best In Class

The deployment consists of ten programs, with an equal division between back-office and front-office activities Specifically, five programs are dedicated to back-office functions, represented by blue shapes, while the remaining five programs for front-office operations are illustrated with chartreuse shapes in Figure 4.4.

FPT has established a robust management system aligned with its vision statement, achieving ISO 9001:2000 certification for all subsidiaries, and CMMI certification for those in software development Beyond mere certification, FPT excels in implementing and maintaining its management system, which has become a valuable knowledge asset By sharing this expertise with interested external companies, FPT aims to foster a modern community of enterprises in Vietnam, reinforcing its position as a market leader in the ICT industry This initiative not only strengthens Vietnamese ICT companies but also enhances opportunities for the entire sector, benefiting FPT in the process.

The fractal concept simplifies the setup and customization of FPT's management system for new subsidiaries, ensuring a well-structured and effective management framework across all organizational levels.

FPT is experiencing significant growth but faces challenges due to bureaucratic management structures among leaders and middle-level managers This presents obstacles in their decision-making processes Additionally, FPT's lack of expertise in the real estate sector creates a knowledge gap between their existing management system and the demands of the industry These factors highlight FPT's weaknesses in effectively competing in the real estate market.

4.2.3 Human Resource and corporate Culture

At the end of December 2011, FPT had about 13,000 employees in total Figure 4.5 shows the growth of human resource of FPT

Like a consequence of vision statement, human is momentous resource of FPT This concept is not only on word but also on practice in FPT

Between 2003 and 2007, FPT experienced significant growth in its human resources However, in 2008, the company reduced its workforce due to a crisis and internal restructuring Since 2009, with the exception of a brief spike in 2010, FPT's human resource growth rate has slowed considerably and stabilized This trend is largely attributed to the economic crises affecting both Vietnam and key international markets, including Japan, the EU, and the US.

In Vietnam, FPT is well known as exciting environment for employee In fact, the most of attractive point of working environment in FPT is training and coaching policy

Source: www.fpt.com.vn

All new employees at FPT undergo a comprehensive orientation program that covers essential topics such as an overview of the company, details on employee compensation and benefits, equipment operation instructions, work assistance, professional work routines, and workplace rules and regulations.

For managers, the Company builds its own training programs such as Leadership Building – which offers the Mini MBA program, training courses, and field trips abroad 20

By internal training system, FPT has succeeded in building up skillful and loyal human resource This is strong point of FPT Corporation

Besides good training policy, compensation policy of FPT is good, too

FPT policies on employee compensation, benefits, and promotion follow four criteria: merit-based, competitive, fair, and transparent The Company provides a comprehensive compensation package that includes the following:

• Base salary: each employee receives 13 months of salary per year, depending on the position

• Allowance: allowances vary depending on the job and position.

• Bonus: bonuses are awarded based on each employee’s performance and on the Company’s overall business performance.

•Other benefits: vacation allowances, health insurance for FPT’s staff and relatives (FPT Care) and employee discount when purchasing FPT’s products and services 21

FPT faces a significant challenge in developing an effective employee performance assessment within its compensation policy Despite investing early in a performance evaluation system grounded in modern human resource management theories, the current approach lacks the effectiveness needed to fully motivate all employees.

FINANCIAL ANALYSIS

FPT is a leading blue-chip company on the Vietnamese stock market, recognized for its impressive annual revenue exceeding one million US dollars As a prominent public company, FPT plays a significant role in the country's economy.

Table 4.1: FPT’s revenue in last five year 23

In recent years, Nokia mobile phone distribution has been the primary revenue driver for FPT, accounting for 67% of the company's total revenue over the past five years This significant contribution has led many investors to perceive FPT more as a trading company rather than an ICT firm, highlighting a disparity between revenue and profit dynamics.

Table 4.2: FPT profit before tax in last five year 24

23 Collect from consolidate financial statement of FPT Corp

24 Collect from consolidate financial statement of FPT Corp

Year 2007 Year 2008 Year 2009 Year 2010 Year 2011

REVENUE Unit: Million VND Trend

Year 2007 Year 2008 Year 2009 Year 2010 Year 2011

PROFIT BEFORE TAX Unit: Million VND Trend

Over the past five years, FPT Corporation's distribution business accounted for 25% of its total profit before tax, while other ICT services and products contributed 71% However, the contribution from the distribution sector has been declining annually and is expected to continue this downward trend due to its dominant position in Vietnam's ICT and mobile equipment market In contrast, FPT's other ICT sectors are poised for growth, driven by the significant potential for increased computerization in Vietnam's economic management Following the crisis period, a rise in computerization management is anticipated Additionally, software outsourcing, educational services, and telecommunications have seen rapid profit growth, averaging an 85% increase over the last five years This surge has contributed to an average annual profit before tax increase of approximately 60% for FPT during the same period, marking a significant growth rate in Vietnam's economy.

This is excellent result of any company in Vietnam in last difficult period of economic

FPT demonstrates a robust financial performance, consistently generating profits while maintaining a healthy cash flow Over the past five years, the company has enjoyed stable positive cash from operating activities, effectively financing most of its investment needs Despite a yearly increase in working capital, profits from operations have outpaced the growth in working capital requirements, ensuring continued financial stability.

Over the past five years, FPT has significantly invested its profits in land acquisition and fixed asset construction, primarily focusing on office buildings in Hanoi, Da Nang, and Ho Chi Minh City Notably, the 181-hectare real estate project in Da Nang represents FPT's largest investment in the real estate sector to date.

FPT's real estate investments are primarily funded by its operating profits, providing a significant advantage during the current recession in the real estate sector and the tightening of banking credit in Vietnam This strong financial position alleviates any pressure related to capital requirements However, investing in large-scale projects, such as new urban developments, demands substantial capital that exceeds FPT’s annual profit margins.

Table 4.3: Brief of Cash flow of FPT in last five yeas 25

25 Collect from consolidate financial statement of FPT Corp

Year 2007 Year 2008 Year 2009 Year 2010 Year 2011

I Cash flow form operating activities

2 Operation profit before movement in working capital

3 Cash from movement of working capital (489,190) (234,740) (1,499,540) (1,589,767) (1,438,305)

4 Net cash from operating activities 785,338 1,370,636 523,274 485,515 1,457,430

II Cash flow from investing activities

1 Acquisition and construction fix assets and other long-term asset

2 Payment for investment in other entities

3 interest earned, dividiends and profit received

4 Other in/out flow from investing activities 1,679 37,080 (2,647,912) 310,776 (280,685)

5 Net cash flow (use in) investing activities (841,264) (683,115) (1,904,049) (1,478,913) 257,520

III Cash flow from financing activities

2 Capital contribution in subsidiaries attributable to minority interess

3 Capital withdrawals, buying treasury shares and proceeds from share re-issued

7 Net cash flow from financing activities 281,989 (340,533) 2,448,782 119,015 (250,689)

IV Net increase/(decrease) in cash

FPT demonstrates a robust financial position, characterized by a significant growth rate in its core business and strong profitability This advantageous position enhances FPT's ability to attract capital from the stock exchange market Notably, in 2008, FPT successfully issued five-year convertible bonds, raising 1,800 billion VND from investors.

OPERATION OF REAL ESTATE BUSINESS OF FPT CORPORATION

4.4.1: Goal of real estate business

In 2007, FPT ventured into the real estate sector, marking a significant diversification for the company Despite internal disputes regarding this unfamiliar business direction, FPT recognized the lucrative opportunities presented by Vietnam's booming real estate market at the time Subsequently, in June 2007, FPT established FPT Land Ltd Co., with its headquarters in Hanoi and a branch in Ho Chi Minh City, solidifying its presence in the competitive real estate landscape.

Figure 4.6: Goals of Real estate Business of FPT

FPT aims to revolutionize the real estate sector by integrating ICT technology into its offerings, creating smarter and more user-friendly properties that prioritize customer satisfaction through innovation This long-term vision is defined by three concrete targets that guide FPT's strategic direction in the real estate market.

 Real estate activities business serves for internal demand of FPT as Corporate Building management service; manage internal construction projects; serve for internal workspace demand

 Research and seek fitting opportunities, which are medium-term project of real estate product for living purpose

FPT Urban aims to develop medium-sized towns in key economic regions of Vietnam, focusing on local government collaboration These towns will feature a core ICT education campus and attract ICT companies, reflecting FPT Real Estate's ambitious vision for urban development.

Initially, FPT did not thoroughly assess its opportunities in the real estate market, which was experiencing peak development Many investors, both individuals and organizations, were achieving success in this booming sector Given the market conditions, FPT was confident it could replicate the success of other players without a clear focus on market segmentation However, as a well-known brand in Vietnam, the Board of Directors recognized the potential to invest in high-value real estate products.

Between 2008 and 2011, the real estate market experienced a decline In 2010, leveraging insights from the FPT City Da Nang projects, FPT reassessed its investment strategies and established a clear direction for its real estate business.

It has focused on developing new urban or new Central Business Districts of city This is guideline for real estate business in One FPT strategy

Base on One FPT strategy, the main segments of real estate are:

 Resident land and downtown house

 Luxury multifunction building at Central Business Districts of cities

In the upcoming year, FPT plans to explore investment opportunities in new real estate projects located in provinces near Hanoi, Ho Chi Minh City, and Da Nang, where land prices are more affordable compared to the central areas of these cities.

FPT is strategically focusing on developing affordable products that align with the market's payment capabilities, a key aspect of its One FPT strategy The company recognizes the advantage of its workforce, which consists of 13,000 employees, predominantly young and highly educated, with half being software engineers This demographic has a significant housing demand, yet many struggle to afford homes in major cities like Hanoi and Ho Chi Minh City This internal demand has motivated FPT to invest in creating a new urban development, known as FPT City, to address these housing needs.

 The urban of ICT service including ICT education

 Most of inhabitant in FPT city work for ICT companies and education inside of FPT city

 Education and software development center will core of urban Most of business in urban will related to two kinds of service

 FPT city must at least solve problem of housing for FPT employee who works for FPT organizations, which locates inside of FPT city and near neighbor place

FPT strategically targeted a niche market, recognizing the absence of similar products in the industry This decision stemmed from the rapid growth of human resources and the strong commitment of FPT's leadership to their vision While this segment may not offer optimal economic benefits, it presents significant eco-social advantages.

FPT's significant strength in the ICT market lies in its strong brand recognition and its positive impact on the eco-social environment in Vietnam This advantage enables FPT to attract other ICT companies to FPT City, fostering the development of a vibrant ICT community Such a community enhances the collective capabilities of the ICT sector, positioning FPT to compete effectively in the global ICT market, particularly in software development services.

Suppliers of FPT in real estate business are local government and companies, which relates to business with real estate like banks, urban planning, construction companies, etc

Local governments play a crucial role in the real estate sector by providing substantial land necessary for the development of projects like FPT City They serve not only FPT but also other real estate developers, highlighting their significant influence in the industry Beyond merely selling land, local governments establish regulations that dictate land usage, ensuring that all real estate companies adhere to the same legal requirements This regulatory power reinforces the local government's strong position within the real estate market.

FPT is a relatively new entrant in the real estate sector, facing challenges in gaining recognition and securing deals with local governments for land acquisition However, the company's innovative vision for developing a new city centered around ICT aligns with modern trends in the real estate industry and presents an ambitious opportunity This type of city promises to enhance local eco-social development, featuring low pollution levels, a highly educated populace, and a robust industrial and business structure These attributes are particularly appealing to provinces like Da Nang, Dong Nai, and Quang Ninh Additionally, FPT's established presence and strong historical relationships with various provinces, stemming from its provision of diverse ICT services to government entities, position the company favorably in its real estate endeavors.

FPT employs a bidding mechanism to select suitable suppliers for construction, planning, architecture, and other real estate-related services However, the company's lack of experience and management system knowledge in the real estate sector presents challenges in the bidding process, resulting in longer decision-making times compared to competitors and lower supplier confidence Despite these issues, FPT's bidding process is distinguished by its absolute transparency and fairness, setting it apart positively from other players in Vietnam's real estate industry.

FPT is a reputable name in Vietnam's finance and banking sector, known for its strong financial position The company has established solid long-term relationships with major Vietnamese banks, including BIDV, VCB, and Techcom Bank Additionally, FPT maintains positive connections with foreign investment funds from Japan, further enhancing its credibility in the market.

FPT has established a robust relationship with local governments, which are vital suppliers of essential materials for the real estate sector While there are some weaknesses in their management system, these do not significantly impact their real estate operations However, the low recognition of the FPT brand within the real estate industry remains a critical challenge for the company.

FPT's real estate business has strategically aligned its services and products to meet internal demands, focusing on areas such as workspace solutions, building management, and construction project management Although the current internal demand is not substantial, it plays a crucial role in sustaining FPT's real estate operations Looking ahead, as FPT accelerates investment in FPT City, these internal demands are expected to grow, presenting more lucrative opportunities in the medium to long term.

SUMMARY FPT’ SW OT OF REAL ESTATE BUSINESS

By analyzing of internal factors of FPT, there are some strengths and weaknesses pointing out which are considered as critical points of FPT in real estate business

FPT has established a robust operational framework over its 22 years of experience, demonstrating expertise in setting up new businesses and implementing management standards This extensive experience enables FPT to effectively deploy management practices tailored for emerging enterprises.

 FPT has clearance of Vision, Mission and Core Value This helps FPT to determine direction of new business including real estate business consistently

FPT is a leading brand in Vietnam's ICT market, widely recognized for its significant contribution to the country's economy Its prominence in the ICT sector instills confidence in customers, encouraging them to embrace FPT's embedded ICT solutions, which enhance the intelligence, user-friendliness, and utility of its products.

FPT has established strong relationships with financial organizations and investment funds both in Vietnam and abroad, which provide significant advantages in mobilizing capital for effective long-term investments This strategic collaboration enhances FPT's financial structure and management expertise, playing a crucial role in their real estate investment endeavors.

Financial transparency is a core value of FPT, earning the trust of investors and facilitating the issuance of securities for capital enhancement and bidding purposes.

FPT excels in fostering strong relationships with government entities at both central and local levels, which enables the company to effectively seize investment opportunities arising from the government's economic development policies.

With extensive expertise in project management and experience as a distributor for major players in the ICT sector globally, I possess a unique advantage that can be effectively applied to the real estate business This field demands strong project management skills, making my background particularly relevant and beneficial.

 FPT is low recognition of brand in real estate industry and investment

 FPT has lack of knowledge about real estate and construction industry

 Mechanism to make decision in real estate business is rigid and over conservative as well as it take a long time to make it

 FPT is less focusing on feasibility assessment of real estate investment opportunity Lack of standard or key performance index of this field of business in FPT

 FPT has not much knowledge of mechanism of real estate market

 FPT has lack of good expert for real estate business in its current workforce

FPT has diversified its investments into banking and security services while simultaneously seeking funding, making it challenging to mobilize capital for large-scale real estate projects as per its strategic direction.

INTERNAL FACTORS EVALUATION (IFE) MATRIX

The Internal Factor Evaluation (IFE) matrix assesses a company's internal strengths and weaknesses in the real estate sector Each factor is rated on a scale from 0.0, indicating minimal importance, to 1.0, signifying high importance The weights assigned reflect the relative significance of these factors for achieving success in the real estate industry.

Each key factor of strengths and weaknesses is rated on a scale from 1 to 4, where 4 represents a major strength, 3 a minor strength, 2 a minor weakness, and 1 a major weakness To ensure a more objective assessment, the rating matrix was shared with 11 key managers at FPT, whose responsibilities are aligned with the company's real estate business and strategic initiatives.

Table 4.4: Internal factors evaluation matrix (IFE Matrix)

No Strengths Weight Rating Weighted

1 - Healthy standard of mechanics of operation 0.05 3 0.15

2 - Clearance of Vision, mission and core value 0.06 4 0.24

- Brand name FPT is top of mind brand name in ICT market in Vietnam and high recognition of Vietnam economy

- FPT has good relationship with partners, who are financial organization or investment fun in

- Finane transparence is one of value of spirit of FPT Has respect from investors and not difficult to issue securities to inreace capital purpose or bidding process

Maintaining strong relationships with government entities at both national and local levels is crucial for fostering investment opportunities that align with the economic development policies of the government This engagement enables FPT to effectively navigate and capitalize on emerging investment prospects.

- High expertise in project management skill and know-how in Trading as distributor for many big player in ICT worldwide

1 - FPT is low recognition brand in real estate industry and investment 0.07 1 0.07

2 - FPT has lack of knowledge of technology about real estate industry 0.08 2 0.16

- Mechanics to make decision in real estate business is rigid and over conservative and take a long time to make it

- It is low objective in feasibility assessment of real estate investment opportunity Lack of standard or key performance index of this field of business in FPT

5 - FPT has low knowledge of mechanics in real estate market 0.07 2 0.14

6 - Lack of good expert for real estate business in its current workfore 0.08 2 0.16

FPT has diversified its investments into banking and security services while simultaneously seeking funding, making it challenging to mobilize capital for its large-scale real estate projects.

The IFE matrix indicates that FPT has a weighted score of 2.48, positioning it as an average performer in the real estate industry While FPT enjoys strong brand recognition in the Vietnamese economy, its low visibility within the real estate sector and its diversification into non-core businesses are significant weaknesses Given these strengths and weaknesses, FPT has the opportunity to develop strategies that enhance its competitive edge and improve its performance in the real estate market.

FORMULATING MARKET DEVELOPMEN T STRATEGY FOR FPT’S

SWOT ANALYSIS

Based on EFE matrix and IFE matrix from previous chapter, the SWOT analysis is going to form in below

The Southeast Region is experiencing a significant demand for affordable housing, particularly low-priced townhouses, driven by a growing young population and rapid urbanization.

 There is a trend of migrant from center of HCMC to suburban and vicinity town of

HCMC because of overload infrastructure of HCMC

Traffic congestion in major cities like Ho Chi Minh City places significant pressure on both central and local governments In response, the government is prioritizing investments in transportation infrastructure, including highways and metro systems This initiative aligns with the growing trend of population expansion from urban centers to neighboring towns.

 Price of Land is cheaper and cheaper because of frozen real estate market

This is opportunities for buyers, who want

FPT boasts a robust operational framework, honed over 22 years of experience in establishing management systems This extensive expertise enables FPT to effectively set up new businesses and implement management standards tailored for their successful deployment.

 FPT has clearance of Vision, mission and core value This help FPT consistent to determine direction of its new business including real estate business

FPT is a leading brand in Vietnam's ICT market, known for its strong recognition within the country's economy As a top-of-mind brand in the ICT sector, FPT instills confidence in customers regarding the integration of ICT solutions into their products, making home ownership more affordable This approach helps bridge the gap between demand and supply prices, enhancing accessibility for consumers.

 Vietnam economic growth will still high rate of 7% of GDP growth in average within medium-dated and this condition is advantage to attract capital from FDI flow

This trend creates opportunities to co-op between domestic companies, which have advantage of resource of land and foreign investors, who have advantage of capital

 New technology of building material (like unbaked material) and construction will save cost and time to deploy real estate project

 Lack of popular product concerned about living space and living condition

Therefore, there are opportunities to think about differentiating strategy and this is attracting way for new players in real estate industry if they concern this point of market

The government is promoting a new generation of real estate products that prioritize energy efficiency, environmental friendliness, and green urbanization This initiative presents opportunities for newcomers who are knowledgeable about contemporary living trends.

 There are opportunities to merge and intelligent, friendly and useful

FPT has established strong relationships with financial organizations and investment funds, both in Vietnam and internationally This network provides FPT with a competitive edge in mobilizing capital for effective long-term investments, while also improving its financial structure and management expertise These factors are crucial for success in real estate investment.

Financial transparency is a core value of FPT, earning the respect of investors and facilitating the issuance of securities for capital enhancement and bidding purposes.

 FPT is good in maintain contact and relationship with Government at both countrywide and local level

It help for FPT has approach to investment chance that is consequence of economic development policy of Government

With extensive expertise in project management and a strong background in trading as a distributor for major players in the global ICT sector, we possess a unique advantage that can be effectively leveraged in the real estate industry This sector often necessitates numerous mergers and acquisitions, particularly with companies facing market challenges due to crises.

The Vietnamese Government is strengthening its management of the real estate market to curb speculative transactions and foster a healthier environment for project management skills.

Tightened bank loans for real estate business activities have led to a scarcity of capital for investors, impacting their operations This situation also affects customers with genuine needs, making it difficult for them to secure financing for purchasing homes for living purposes.

The current economic climate is characterized by an unusually high cost of debt, ranging from 22% to 26% per year This has led to a significant decline in investor interest and a marked decrease in the number of individuals able to secure loans for purchasing homes.

The legal framework governing land and real estate is expected to undergo significant changes soon Currently, it lacks stability and is heavily influenced by the perspectives of local governments.

The influence of incumbent government syndics on local town planning significantly impacts its stability, as each new administration tends to implement its own strategies This constant change in leadership leads to a lack of continuity in town planning, resulting in an unstable development framework over time.

 It takes a long time to submit investment

 FPT is low recognition of brand in real estate industry and investment

 FPT has lack of knowledge of technology about real estate and construction industry

 Mechanics to make decision in real estate business is rigid and over conservative and take a long time to make it

 It is low objective in feasibility assessment of real estate investment opportunity Lack of standard or key performance index of this field of business in FPT

 FPT has a little knowledge of mechanics in real estate market

 FPT has lack of good expert for real estate business in its current workforce

 FPT diversified investment in to license to local government and most of case, submitting schedule is not stable

Investors have to spend time to wait, amendment document multi times

 Because of unsuccessful master plan of

National land using, the land for agriculture purpose is narrowing, many failed in land resource management so opportunities to have land for resident is harder and more difficult

The real estate market is experiencing a freeze, leading to low liquidity and increasing bankruptcy pressures on real estate companies This situation poses significant challenges not only for existing players but also creates psychological barriers for new entrants Additionally, banks and security services are facing difficulties in mobilizing capital, making it challenging to fund large-scale real estate projects, such as those directed by FPT.

SWOT STRATEGY

 SO strategy (uses strengths to take advantage of opportunities)

- To use prestige of FPT brand name and relationship with government in local or central level to approach to opportunities in trend of urbanization in vicinity city of

Ho Chi Minh City as Binh Duong, Dong Nai, Ba Ria Vung tau

- To deploy exciting core value of FPT in to its real estate project to make difference for FPT’s real estate products

- To take advantage of financial situation and relation with financial partners of FPT to mobilize capital for new project

- To use experience of FPT in ICT to form ideas about smart and green urban, which applies ICT in urban management

 WO strategy (Strategy to take advantage of opportunities to overcome weakness)

To capitalize on the urbanization trend, it's essential to focus on identifying suitable opportunities in emerging areas Acquiring land in these locations is often more cost-effective than purchasing in city centers This advantage allows for the development of real estate products that align with the financial capabilities of a broader range of buyers.

To enhance our expertise in the real estate sector, FPT aims to collaborate with experienced foreign partners who possess valuable insights and knowledge in the industry This strategic partnership will help us address our current knowledge gaps and strengthen our position in the real estate market.

 ST strategy (Strategy to take advantage of Strength to eliminate threats)

- To issue securities as convertible bond or common stocks to mobilize capital for real estate project instead of ask bank loan

- To systemize all processes of real estate business activities to avoid risks from legal factors and change of urban planning from local government

 WT strategy ( Strategy to minimize weakness and counter threats)

- Enhance effectiveness of feasibility study to avoid turbulence of market and better in predictability of changes of external environment’s elements especially legal system about land and real estate.

STRATEGY FORMULATION AND CHOICE

This section is formulation of Vision and mission and potential strategies that FPT can apply for real estate market in South-East of Vietnam until year 2016

From 2012, FPT will combine their knowledge on real estate industry and trend of economic growth to take care investment opportunities that it got in last some year

FPT is focusing on the rapidly developing Long Thanh district in Dong Nai province, located 60 kilometers from Ho Chi Minh City (HCMC) A new highway, the Long Thanh Dau Giay highway, is currently under construction and is expected to be completed by the end of 2014, reducing travel time to approximately 30 minutes This improvement will make Long Thanh an attractive destination for real estate investors aiming to develop affordable urban complexes As a result, the area is becoming increasingly appealing to young professionals seeking better living conditions while maintaining proximity to HCMC for work opportunities.

In addition to the highway project, Vietnam's largest airport will be constructed in Long Thanh district, significantly enhancing the region's infrastructure These developments are expected to facilitate a wave of new migration from Ho Chi Minh City to Long Thanh and its surrounding areas in the near future.

FPT's mission and vision for its real estate business in Southeast Asia focus on investing in the development of innovative, smart, and eco-friendly towns Key elements driving this initiative include a commitment to advanced technology integration and sustainable practices.

- FPT University and other ICT training centers will be organized as center of FPT urban area

FPT's software development business will serve as the cornerstone of FPT Urban, aiming to establish a vibrant hub that attracts other players in the software development industry This initiative is designed to foster a robust community of software enterprises within FPT Urban.

- ICT universities and software enterprise will be core of FPT urban Other business activities inside of FPT urban will related to ICT industry or serves for this industry

- Because of large community of people who work in ICT industry, FPT aims to deliver standard of living with interested in quality of living

As a specific factor in vision of FPT in real estate industry, FPT should think that people would do not by a house; they buy living opportunities in their life

5.3.2: Market development Strategy for FPT’s real estate in South-East region of Vietnam

This section uses generic competitive strategy model of (Michael Porter, 1985) to form strategies for FPT to develop market in business of real estate

In the dynamic market of Ho Chi Minh City, FPT has the opportunity to implement a cost leadership strategy due to the disparity between high real estate prices and customers' payment capabilities Various factors influence the cost of real estate products, including economic elements such as land acquisition and financial management, as well as non-economic aspects like architectural planning, project management, and social communication solutions.

In Vietnam, the significant disparity between real estate prices and customer purchasing power stems from prolonged speculation in the market, particularly concerning raw land Many real estate projects have allocated substantial investments towards raw land, driven by short-term price increase expectations To address these challenges, FPT can adopt a cost leadership strategy by leveraging market opportunities to mitigate its weaknesses through a WO strategy.

- Acquiring primary land in suburban areas which are destinations of migrant trend

- Use strength of standard mechanics of operation to eliminate waste cost in deployment of projects

Leveraging transparency in financial activities is essential to mitigate internal corruption and fraud in real estate project deployments In Vietnam's construction industry, corruption and fraud pose significant challenges, particularly in cost-saving measures Implementing transparent practices can effectively address these issues, ensuring integrity and accountability throughout the project lifecycle.

To optimize human resources, FPT should prioritize outsourcing activities by developing a skilled expert team specializing in various aspects of the real estate industry This expert team will effectively manage the bidding process to select the most suitable suppliers for each project component.

- Utilize current ICT base in management to manage real estate project to reduce operation cost

- Set up long-term partnership with architect planning providers, who are full experience and knowledge about low-cost civil construction planning

- Build up some building design as standard of products and use them in many projects to save cost of design and time to deliver product

The Leadership in Cost Strategy aids FPT's real estate business by addressing customer price sensitivity However, as analyzed in chapter 3, customer bargaining power is heavily influenced by the real estate market's condition During a market downturn, it is uncertain whether customers will increase their purchases despite lower prices Conversely, in a market upturn, speculators often enter the primary market to acquire products, later selling them at higher prices in the secondary market, undermining the viability of low-cost products.

Table 5.1: Benchmark key requirement of overall cost leadership strategy

I Commonly required Skills and Resource

1 Substained capital investment and access to capital Yes

3 Intense supervision of labour No

4 Products designed for ease in manufacture No

5 Low-cost distribution system Yes

2 Frequent, detail control report Yes

3 Structured organization and responsibilities Yes

4 Incentive base on meeting strict quantitative targets No

Table 5.1 indicates that FPT may find itself in a challenging position with its Leadership in Cost strategy, as its advantageous resources are counterbalanced by similar disadvantages Implementing this strategy in the South-East market poses significant risks for FPT, given its status as a new entrant with limited industry knowledge Therefore, relying solely on this strategy may not guarantee FPT's success.

FPT can leverage its strengths in the ICT market to create a unique differentiation in the Vietnamese real estate industry through the SO strategy By integrating ICT into real estate products and township infrastructure, FPT has the opportunity to develop innovative smart real estate solutions While the use of ICT in high-end properties has been limited to security and control functions, there is significant potential for embedding ICT in infrastructure management, such as traffic control and energy efficiency The combination of low land costs in the Southeast region and the creation of smart townships presents a unique opportunity for FPT to diversify into real estate Although real estate is not FPT's traditional business, its expertise in ICT can lead to the development of distinctive real estate products by merging construction technology with advanced ICT solutions.

Table 5.2: Benchmark key requirement of differentiate strategy

I Commonly required Skills an Resource

4 Strong capability in basic research No

5 Corporate reputation for quality or technology leadership Yes

6 Long traditional in the industry and unique combination of skills draw from other business Yes

7 Strong cooperation from chanels Yes

1 Strong cordination among function in R&D,

Products development and marketing No

2 Subjective measurement and incentives instead of quantitative measurement Yes

3 Amenities to attract high skill labor, scientists, or creative people Yes

The benchmark table indicates that FPT's current strategy aligns more closely with a differentiation approach, as it meets seven out of ten key requirements This suggests that a differentiation strategy is more suitable for FPT compared to a leadership in cost strategy.

By integrating both SO and WO strategies, FPT can adopt a focused approach to develop ICT-centric cities, such as townships designed for the ICT market This strategy is appealing as the ICT sector benefits from government support Establishing new towns as communities for ICT enterprises will enhance the competitiveness of Vietnam's ICT industry, which is recognized as a promising sector with significant global potential However, the Vietnamese ICT industry remains relatively small on the world stage, with local enterprises primarily engaged in software development outsourcing and integration services rather than advancing new technologies The government is actively fostering this industry by establishing high-tech industrial zones, such as the Hoa Lac High Tech Park.

Ha Noi and Sai Gon High Tech Park in Ho Chi Minh City currently face low occupancy rates To successfully establish a township catering exclusively to ICT companies, FPT must navigate strong competition from existing high-tech industrial zones Implementing a differentiation strategy is essential, offering not just workspaces and job opportunities, but also quality living environments for ICT professionals By integrating these elements, FPT can foster a unique offline social community in Vietnam, specifically designed for ICT engineers.

In conclusion, adopting a focus strategy can significantly enhance FPT's traditional business expansion, particularly in the real estate sector By leveraging its position as a market leader in ICT, FPT can effectively attract a larger community of ICT professionals to its real estate projects.

5.4: Strategy evaluation – Quantity strategic planning matrix

IMPLEMENT STRATEGY

Now, diversification business by expansion of investment activities into non- core business of FPT is adventurous business decision that FPT determines to take

FPT is venturing into an unconventional industry for the first time, marking a significant shift in its long-term investment strategy The company aims to diversify its operations and establish itself as a multi-industry entity, leveraging its core strength in ICT to create distinctive and valuable products.

Proposed focus strategy for real estate business of FPT, this section will suggest some solution to implement strategy successfully

The commitment of the board of directors is crucial when considering investments in non-core businesses, particularly in the real estate sector, due to the inherent risks and lengthy business cycles Overcoming technological challenges and conservative attitudes among management at all levels is essential for success Therefore, the board must establish a clear and strong determination to pursue such ventures, ensuring that the organizational structure supports these strategic decisions.

FPT does not require major structural changes in the coming years; however, it is crucial to improve the investment decision-making process Streamlining the delegation structure within this area of business will enhance operational efficiency by reducing decision-making time.

To thrive in the real estate sector, FPT requires specialized human resources, particularly legal and construction experts The scarcity of these professionals poses challenges in accessing vital information necessary for making informed investment decisions and developing subsequent products.

Acquiring land and managing compensation in Vietnam's real estate sector is a complex challenge due to the intricate land laws and chaotic urban planning This process often consumes a significant portion of the total investment in real estate projects To streamline land acquisition and reduce costs, FPT can explore resettlement strategies that involve reallocating local demographics while adhering to their new urban planning Rather than providing full cash compensation for land, FPT could implement a mechanism allowing local residents to contribute a portion of their compensation as equity in FPT projects This approach offers several advantages over traditional compensation methods currently prevalent in the market.

 Local people still live in their familiar space but better infrastructure and living condition

 It keeps local community; therefore it can keep local culture value and support to enhance value of living condition for new urban in term of culture and social also

Local governments can minimize time and costs associated with land acquisition and compensation, thereby reducing corruption and bureaucratic hurdles This efficiency allows FPT to gain greater support for its development projects, highlighting the company's commitment to social responsibility.

Local communities can experience lasting advantages from new urban projects, providing them with opportunities to improve their lives significantly This represents another positive impact of such initiatives.

FPT's approach to land acquisition and compensation involves a trade-off with their profits from real estate projects; however, this strategy allows them to save both time and initial costs Consequently, it alleviates the pressure on investment capital, which is a significant advantage, particularly in the current challenging banking and financial market.

A comprehensive feasibility study is crucial for success in the real estate business, yet FPT currently faces challenges due to its low performance in this area To improve outcomes, it is essential to strengthen the expert team, streamline procedures, and establish clear benchmarks tailored to FPT’s specific needs in the real estate sector.

To enhance its market position, FPT should establish long-term strategic partnerships with leading suppliers in the construction and real estate sectors In these competitive industries, collaboration is key, as it enables companies to leverage each other's strengths By fostering these partnerships, FPT can mitigate its weaknesses in non-core areas such as real estate and construction knowledge, ultimately driving growth and innovation.

FPT aims to strengthen its relationships with ICT enterprises in Vietnam and the regional area, particularly with international partners By fostering a robust community of ICT businesses, FPT seeks to inspire collaboration and promote the vision of an ICT city that aligns with its strategic goals.

 Marketing and public relation: Intensify public relationship activities and build marketing strategy for this business especially build a storyline about type of city that FPT wants to develop

To maintain its market leader position in core businesses, the company will focus on sustaining substantial cash flow over the coming years, replicating the success achieved in the past five years.

 Maintain relationship with banks and financial organizations

 Build long-term master plan of cash flow, which including dividend paid planning and issuance securities to mobilize capital need

 Build up scenario of share properties of real estate business

 Re-evaluate strategy and adjustment

FPT, like many companies venturing into unfamiliar industries, may encounter challenges in executing its real estate strategy due to differing opinions within the organization However, with Vietnam's economy projected for significant growth in the coming years, FPT must align with this trend to achieve its One FPT strategy goals Consequently, real estate is identified as a crucial business area that will enable FPT to expand its operations Successfully implementing a development strategy in the real estate market will bolster FPT's confidence in reaching its objectives.

CONCLUSION AND RECOMMENDATION

The real estate industry is currently experiencing a period of stagnation, with housing prices having decreased by nearly half compared to four years ago Despite this decline, prices remain unaffordable for many potential buyers Consequently, numerous real estate investors find themselves in precarious situations, grappling with inadequate capital, low liquidity, and payment challenges that threaten their financial stability Nevertheless, the demand for housing persists, particularly in major cities and among the younger generation.

HCMC is facing significant infrastructure overload, prompting a shift in urbanization from the city center to its suburbs and surrounding areas This trend is encouraging migration from central HCMC to nearby towns Additionally, the development of traffic and eco-social infrastructure in these vicinities is creating new opportunities for real estate investment in suburban and connected regions of HCMC.

FPT's real estate business is poised to capitalize on opportunities in Southeast Vietnam, leveraging its strengths for growth This article outlines a strategic plan for market development aimed at advancing FPT's real estate initiatives through 2016.

The ICT city represents a unique and challenging concept to replicate, given its significant requirements such as prestige in the ICT market, leadership roles, and community relationships This paper proposes a focused strategy to clearly identify target customers while leveraging differentiation strategies for competitive advantage.

Developing an effective strategy for a company can be challenging, especially when entering unfamiliar industries FPT Corporation's foray into the real estate sector represents a bold venture, as the company lacks established advantages in this new market To differentiate itself, FPT plans to leverage its expertise in ICT by creating an ICT-focused urban environment tailored for the ICT community, a novel concept in Vietnam The company's strong position as a market leader in the ICT sector will aid its performance in real estate; however, careful execution of the strategy is essential, particularly in gaining the support of the ICT community, which poses a significant challenge for FPT.

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(Ph m Ng c Thúy và ctv d ch), NXB Khoa h c và k thu t, TP HCM

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B S Vi t Nam – nhìn l i 20 n m qua: Nh ng th ng tr m

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Danh sách khu công nghi p,

H i ngh Quy ho ch phát tri n nhân l c các tnh vùng ông Nam B giai đo n 2011-2020, B k ho ch đ u t , 2010,

K t qu toàn b T ng đi u tra Dân s và Nhà Vi t Nam n m 2009,

Quy ho ch thành ph H Chí Minh đ n n m 2020,

LIST OF COUNTRIES RECOGNITION VIETNAM HAS MARKET

Appendix 1: List of countries recognition Vietnam has market economy

5 The kingdom of Brunei Darussalam May-07

7 The People's Republic of China Oct-10

8 The Kingdom of Combodia May-07

10 Republic of the United States of Indonesia May-07

12 Lao People's Democratic Republic May-07

14 Republic of the Union of Myanmar May-07

17 Republic of the Philippines May-07

20 Republic of South Africa May-07

21 The kingdom of Thailand May-07

23 Bolivarian Republic of Venezuela May-07

LIST OF INTERVIEWEES FOR SWOT MATRIX

1 Lê Thành ô Manager of Construction Project of FPT building in Sai Gon High Tech Park

2 Nguy n Th H ng Hà Vice of FPT's Quality Assurance Depatment

3 Nguy n H u Thái Hòa Strategic Management Director of FPT Corp

4 T Huy Hoàng Head of Construction Department of Dong Nai

Huân Real estate investment taskforce staff

6 Nguy n ình Hùng Head of Accounting Department of FPT HCMC

7 Lê H u Hùng Real estate investment taskforce staff

8 Ph m Tùng Lâm Real estate investment taskforce staff

9 Nguy n V n L c Vice Director of FPT Land Co.Ltd

10 Lê ình L c Vice Director of FPT Land Co.Ltd

11 Hoàng Nam Ti n General Director of FPT Land Co.Ltd

SAMPLE OF INTERVIEW FOR WEIGHTED SCORE OF EFE MATRIX

I am Trinh Ngoc Bien, a student in the MBAVB4 program, which is a collaborative initiative between Solvay Business School and Ho Chi Minh Open University This interview serves as a component of my final project, and the information gathered will be utilized solely for the purposes of the MBAVB4 course.

The table below outlines 17 key factors identified as opportunities and threats for FPT's real estate business Please provide a weighted score for each factor to evaluate their impact effectively.

In the real estate industry, each factor's weighted score reflects its relative importance to achieving success A higher weighted score indicates a greater significance of that factor Additionally, the cumulative weight score of all 14 factors must be equal, ensuring a balanced evaluation of their contributions to success in the field.

Your answer will greatly assist me complete my study

1 - It is large demand of housing, especially demand of tow house, which is house and land attached because of young population and high speed of urbanization in Southeast Region

2 - There is a trend of migrant from center of HCMC to suburban and vicinity town of HCMC because of overload infrastructure of

3 - Crowded and chaotic traffic in big city as HCMC is pressure of

Governments at all levels are increasingly focusing on investments in transportation infrastructure, such as highways and metro systems This trend not only enhances connectivity but also facilitates the expansion of populations from major cities to neighboring towns, promoting regional development and economic growth.

4 - Price of Land is cheaper and cheaper because of frozen real estate market This is opportunities for buyers, who want to own his house with low expensive than normal

Vietnam's economic growth is expected to remain robust in the medium term, creating favorable conditions for attracting foreign direct investment (FDI) This trend presents opportunities for collaboration between domestic companies, which possess valuable land resources, and foreign investors, who bring essential capital to the table.

6 - New technology of building material (like unbaked material) and construction will save cost and time to deploy real estate project

The majority of real estate products in Southeast Asia cater to residential demand, highlighting a significant gap in offerings related to living space and quality of living conditions This presents an opportunity for differentiation strategies, making it an attractive prospect for new entrants in the real estate industry who are mindful of these market needs.

The government is promoting a new type of real estate that emphasizes energy efficiency, environmental friendliness, and green urbanization This shift presents opportunities for emerging players who are knowledgeable about modern living trends.

9 - There are opportunities to merge and acquisition (M&A) with other player, who is being stuck on the market because of crisis

10 - Vietnamese Government reinforce in management of real estate market It aims to reduce speculating transaction on the market and create sane environment for real estate market

Access to bank loan resources for real estate business activities has become increasingly restricted, creating challenges for both investors seeking to finance their ventures and customers with genuine needs to purchase homes for residential purposes.

The current economic climate is characterized by an unusually high cost of debt, ranging from 22% to 26% annually This situation has deterred investors from seeking profits and significantly reduced the number of individuals able to secure loans for purchasing homes.

The legal framework governing land and real estate is expected to undergo significant changes in the near future, reflecting its current instability and the varying perspectives of local governments.

Incumbency thinking among government officials in local government significantly impacts town planning The introduction of new leadership often leads to new plans, resulting in instability in long-term town planning efforts.

5 - It takes a long time to submit investment license to local government and most of case, submitting schedule is not stable

Investors have to spend time to wait, amendment document multi times

The ineffective implementation of the national land use master plan has led to a reduction in agricultural land, resulting in poor land resource management and making it increasingly challenging to secure land for residential purposes.

The real estate market is experiencing a freeze, with low liquidity leading to increased pressure on companies facing bankruptcy This situation not only poses challenges for existing players but also creates psychological barriers for new entrants in the market.

Please check total score as 100 points Thank you very much!

SAMPLE OF INTERVIEW FOR WEIGHTED SCORE OF IFE MATRIX

I am Trinh Ngoc Bien, a student in the MBAVB4 program, which is a collaborative initiative between Solvay Business School and Ho Chi Minh Open University This interview is conducted as part of my final project, and the information gathered will solely be utilized for the purposes of the MBAVB4 course.

The table below outlines 14 factors identified as Strengths and Weaknesses of FPT in the real estate industry Please provide a weighted score for each factor based on its significance.

In the real estate industry, each factor's weighted score reflects its relative importance to achieving success A higher weighted score indicates a greater significance of that factor It is essential that the total weighted score of all 14 factors equals a consistent value, ensuring a balanced assessment of their contributions to success in the field.

Your answer will greatly assist me complete my study

1 - Healthy standard of mechanics of operation

2 - Clearance of Vision, mission and core value and good management system

3 - Brand name FPT is top of mind brand name in ICT market in

Vietnam and high recognition of Vietnam economy

4 - FPT has good relationship with partners, who are financial organization or investment fun in Vietnam and foreign also

5 - Finance transparence is one of value of spirit of FPT Has respect from investors and not difficult to issue securities to increase capital purpose or bidding process

Maintaining strong relationships with government entities at both national and local levels is essential for FPT, as it facilitates access to investment opportunities that arise from the government's economic development policies.

7 - High expertise in ICT and project management skill and know- how in Trading as distributor for many big player in ICT worldwide

1 - FPT is low recognition brand in real estate industry and investment

2 - FPT has lack of knowledge of technology about real estate industry

3 - Mechanics to make decision in real estate business is rigid and over conservative and take a long time to make it

4 - It is low objective in feasibility assessment of real estate investment opportunity Lack of standard or key performance index of this field of business in FPT

5 - FPT has low knowledge of mechanics in real estate market

6 - Lack of good expert for real estate business in its current workforce

FPT's diversified investments in banking and security services, along with simultaneous funding efforts, create challenges in mobilizing capital for large-scale real estate projects aligned with its strategic direction.

Please check total score as 100 points Thank you very much!

RESULT OF INTERVIEW FOR WEIGHTED SCORE OF SWOT MATRIX

- It is large demand of housing, especially demand of tow house, which is house and land attached because of young population and high speed of urbanization in Southeast Region

2 - There is a trend of migrant from center of HCMC to suburban and vicinity town of HCMC because of overload infrastructure of HCMC 0.05 3 6 6 5 5 3 6 6 4 6

- Crowded and chaotic traffic in big city as HCMC is pressure of

Governments at all levels are increasingly focused on investing in transportation infrastructure, such as highways and metro systems This investment trend aligns with the growing population shift from major cities to neighboring towns, facilitating better connectivity and access.

- Price of Land is cheaper and cheaper because of frozen real estate market This is opportunities for buyers, who want to own his house with low expensive than normal

Vietnam's economic growth is expected to maintain a high rate in the medium term, creating favorable conditions for attracting foreign direct investment (FDI) This trend presents significant opportunities for collaboration between domestic companies, which benefit from local resources, and foreign investors, who bring capital expertise.

6 - New technology of building material (like unbaked material) and construction will save cost and time to deploy real estate project 0.05 7 5 4 5 6 5 4 7 5 4

The Southeast real estate market predominantly caters to residential demand, highlighting a significant gap in popular products focused on living space and conditions This presents a unique opportunity for differentiation strategies, making it an attractive avenue for new entrants in the real estate industry to explore.

- Government advocates for new style of real estate product, which are smart in energy usage, friendly with environment and green urbanization

This is opportunities for new players, who have known-how about new trend of living style

9 - There are opportunities to merge and acquisition (M&A) with other player, who is being stuck on the market because of crisis 0.04 3 3 5 4 6 7 3 3 5 3

- Vietnamese Government reinforce in management of real estate market

It aim to reduce speculating transaction on the market and create sane environment for real estate market

Access to bank loan resources for real estate business activities has become increasingly restricted, creating challenges not only for investors seeking to operate their businesses but also for customers with genuine needs for purchasing homes for residential purposes.

The current economic climate is marked by an unusually high cost of debt, ranging from 22% to 26% annually This situation has led to a significant decline in investor activity, as opportunities for profit diminish Consequently, there is a notable scarcity of individuals willing or able to borrow money for home purchases.

The legal landscape governing land and real estate is poised for significant changes in the near future Currently, this system lacks stability and is heavily influenced by the perspectives of local governments.

The prevailing mindset of government officials in local administrations significantly impacts town planning Each new leadership brings forth its own vision, leading to frequent changes in plans and a lack of long-term stability in urban development.

Submitting an investment license to local government can be a lengthy process, often characterized by an unstable submission schedule Investors frequently find themselves waiting for extended periods and may need to amend their documents multiple times.

Due to the ineffective implementation of the national land use master plan, agricultural land is diminishing, leading to poor land resource management As a result, securing land for residential purposes has become increasingly challenging.

The real estate market is currently experiencing a freeze, characterized by low liquidity, which is placing significant pressure on real estate companies facing potential bankruptcies This challenging environment poses not only disadvantages for existing players but also creates psychological barriers for new entrants looking to enter the market.

1 - Healthy standard of mechanics of operation 0.05 6 4 6 4 7 4 5 5 5 6

2 - Clearance of Vision, mission and core value and good management system 0.06 5 5 6 6 8 6 6 6 6 6

3 - Brand name FPT is top of mind brand name in ICT market in Vietnam and high recognition of Vietnam economy 0.09 10 9 6 10 10 10 10 7 8 9

4 - FPT has good relationship with partners, who are financial organization or investment fun in Vietnam and foreign also 0.08 7 8 7 8 7 9 8 9 10 10

- Finance transparence is one of value of spirit of FPT Has respect from investors and not difficult to issue securities to increase capital purpose or bidding process

FPT excels in fostering strong relationships with government entities at both national and local levels, which enhances its ability to identify investment opportunities that align with the government's economic development policies.

7 - High expertise in ICT and project management skill and know-how in

Trading as distributor for many big player in ICT worldwide 0.06 5 5 6 7 6 5 6 5 7 5

1 - FPT is low recognition brand in real estate industry and investment 0.07 7 8 6 7 8 6 7 8 7 5

2 - FPT has lack of knowledge of technology about real estate industry 0.08 10 9 9 6 7 7 7 8 5 8

3 - Mechanics to make decision in real estate business is rigid and over conservative and take a long time to make it 0.08 5 9 9 9 8 9 7 6 6 8

- It is low objective in feasibility assessment of real estate investment opportunity Lack of standard or key performance index of this field of business in FPT

5 - FPT has low knowledge of mechanics in real estate market 0.07 7 8 8 6 6 7 6 7 6 5

6 - Lack of good expert for real estate business in its current workforce 0.08 10 5 9 8 7 8 9 9 7 10

FPT has diversified its investments into banking and security services while simultaneously seeking funding, making it challenging to mobilize capital for large-scale real estate projects aligned with its strategic direction.