(LUẬN văn THẠC sĩ) building business strategy in real estate for company 59, the ministry of defense

Overview of the research status

Since the early 1990s, the real estate sector has significantly expanded, becoming a crucial component of the national economy This sector represents approximately 40% of the country's wealth, with real estate-related activities contributing to 30% of overall economic activity In developed nations, mortgage lending through real estate constitutes over 80% of banks' total loan portfolios, highlighting the sector's vital role in converting assets into financial resources for socio-economic growth, particularly in infrastructure development Consequently, numerous studies have been conducted in this field, showcasing various case studies.

 Competitive environment of real estate sector - strategy of Binh Chanh Construction Investment Shareholding (BCCI) for the period of 2010 - 2015; Author’s group of the University of Economics Ho Chi Minh City

This study examines the evolution of Vietnam's real estate market following its accession to the World Trade Organization (WTO), highlighting its rise from a non-ranked transparency index to one of the most transparent markets The WTO commitment has facilitated the growth of real estate developers like Savills, Colliers, and CBRE Additionally, the authors conduct a SWOT analysis of Binh Chanh Construction Investment Shareholding, identifying its strengths, weaknesses, risks, and external challenges to enhance its competitive advantage However, the study does not assess the development of specific real estate business strategies within the company, leaving potential solutions untested in the company's operational context.

 Preparation of a real estate investment strategy at Vinapol Joint Stock Company; Cao Xuan Cuong (2010)

The author successfully systematized the theoretical framework of real estate investment strategies, evaluated the current capabilities of the business, and explored investment opportunities within the real estate market while analyzing potential challenges Utilizing this theoretical foundation, the author applied a real estate investment strategy for Vinapol Joint Stock Company over the next decade and proposed solutions for effective strategy implementation However, the research is limited as it did not include external and internal matrix analyses, resulting in a somewhat superficial and undetailed SWOT analysis of opportunities, challenges, strengths, and weaknesses.

 Real estate business in Vietnam, current situation and solutions; Nguyen

The study provides comprehensive insights into the real estate sector, covering essential aspects such as general information about real estate and its business operations, market regulations, and the interconnections between real estate and other industries It also examines international experiences in real estate, offering valuable lessons for Vietnam While the author suggests strategies to enhance the real estate business, the research primarily focuses on a macro level and does not develop a tailored business strategy that considers the specific strengths, weaknesses, opportunities, and challenges within the Vietnamese context Instead, the author draws on global experiences to inform potential business strategies for Vietnam's real estate market.

 Establishment of a strategy for the development of the Company 59 of Ministry of Defense by 2015; Ngo Vinh Tu (2007), master thesis,

University of Economics Ho Chi Minh City

In this essay, the author has codified the rationale for business strategy in general and has come up with strategies:

• Strategy to maintain and increase market share

• Strategy for enhancement of competitiveness

• Strategy for development of new product

This study emphasizes the creation of a collaborative development strategy for Company 59 of the Ministry of Defense, rather than exploring real estate business strategies Furthermore, it highlights the necessity of updating the research from 2007 to align with contemporary circumstances.

Accordingly, after studying the previous works, the author will synthesize the success of the works that continue to study the “gaps” to complete the subject in his research.

Objectives of the research

General objectives

Set up a real estate business development strategy at the Company 59 of Ministry of Defense for the five years from 2018 to 2022.

Specific objectives

(1) Systematize the theoretical basis for strategy and strategy development The concept of real estate business strategies, factors influencing the construction business strategies of real estate

(2) Analyze internal and external factors affecting the real estate business of the Company 59 of Ministry of Defense

(3) Make proposal of strategy for real estate business development at Company 59 of Ministry of Defense and propose several conditions to implement the strategy.

Subjects of the research

Business strategy in real estate for Company 59, the Ministry of Defense

Scope of the reseach

For space: The study was conducted at the Company of Ministry of Defense For time: Data was collected over the last five years (2014, 2015, 2016, 2017); The given strategy is valid until 2022

A successful real estate business strategy encompasses the buying and selling of land and properties, investment activities aimed at leasing, and fundamental construction operations By integrating these key activities, real estate professionals can effectively navigate the market and maximize their investment potential.

Methods of the research

Use the case study method at the Company 59 of Ministry of Defense; thesis mostly uses qualitative methods In addition, use the method of comparison and synthesis

Secondary data collection involves gathering information from various sources such as books, newspapers, magazines, and industry statistical reports This foundational research, particularly from strategic management literature, supports the development of the theoretical framework in Chapter 1 Additionally, data sourced from the company, departmental reports, and performance evaluations under the Ministry of Defense contribute to a comprehensive understanding of the organization's operations.

 Primary data collection: The author combines a variety of methods including in-depth interviews with experts and sociological survey methods

In-depth interview methodology: Expert method is used to interview experienced professionals in the field of real estate and management of Company

The expert interview aims to gather insights on the current real estate business environment, focusing on both internal and external factors, as well as competition Additionally, discussions with the management of Company 59 - Ministry of Defense will provide a comprehensive overview of the company's real estate activities Furthermore, strategic management specialists, including instructors and consultants, will contribute their expertise to enhance understanding of the sector.

Sociological survey method (questionnaire) with experts and board of company, customers The number of votes is 100, the number of votes is 87 votes Questionnaires were divided into 2 groups:

 Group 1: Company leaders and experts: 33 questionaire forms

 Group 2: Corporate customers: 54 questionaire forms

The thesis is structured into three chapters, namely:

THEORETICAL BASIS OF BUSINESS STRATEGY IN REAL

The general theories of business strategy

1.1.1 Concept of strategy and business strategy

The term "strategy," rooted in ancient military art, has evolved to encompass both macroeconomic contexts, such as nations and governments, and microeconomic settings, like businesses Economists have varied perspectives on strategy depending on research goals and economic conditions However, in business research, there is a consensus that strategy is synonymous with business strategy Traditionally, Alfred Chandler (1962) defined strategy as the establishment of long-term business goals and the allocation of necessary resources to achieve them This approach views strategy as a framework of long-term objectives, key policies, and measures focused on production, finance, and human resources for business growth In contrast, modern interpretations, such as McKinsey's (1978) definition, emphasize strategy as a series of activities aimed at creating sustainable competitive advantages.

According to Scholes (1999), strategy encompasses the long-term direction and scope of an organization aimed at achieving a competitive advantage by effectively utilizing resources in a dynamic market environment The modern perspective on strategy views it as a comprehensive system of objectives, policies, and solutions designed to optimize resource use and leverage organizational strengths and opportunities This approach not only focuses on achieving specific goals but also fosters competitiveness and positions that contribute to sustainable development for businesses.

Most economists agree that business strategies are closely linked with business development strategies, forming a crucial part of a company's overall strategy This includes secondary components such as marketing, financial, and research strategies A well-defined business strategy creates favorable conditions for establishing competitive advantages Essentially, a business strategy encompasses the long-term goals, policies, and solutions related to production, finance, and personnel, aiming to enhance the quality of business operations In summary, a business strategy serves as a comprehensive action plan designed to achieve specific objectives within a defined timeframe.

A business strategy outlines the long-term objectives and direction of a company, typically spanning five to ten years It encompasses all production activities, aiming to foster favorable conditions that enhance competitive advantage and ensure the sustainable growth of the enterprise.

A business strategy serves as a roadmap for a company's future, detailing essential goals and the methods required to reach them It is crucial for businesses to integrate both strategic and situational objectives, as well as align their strategies with tactical actions, to effectively balance short-term and long-term aims This comprehensive approach enhances operational efficiency and helps mitigate any deviations from the planned strategy.

Key decisions in formulating, implementing, and evaluating business strategies should center around the highest leader to ensure accuracy and confidentiality in long-term decision-making.

A successful business strategy relies on identifying and leveraging comparative advantages To achieve this, companies must thoroughly evaluate their production and business conditions, recognizing their strengths and weaknesses Additionally, it is essential to continuously monitor internal factors throughout the strategy's implementation to ensure ongoing effectiveness and adaptability.

A successful business strategy is fundamentally tailored to align with specific business lines, specialized areas, and the unique strengths and traditions of an enterprise This strategic approach ensures that the business is positioned effectively within the market, allowing it to select and implement strategies that leverage its prepared capabilities and inherent strengths.

1.1.3 The role of business strategy

The development and execution of a business strategy is crucial to a company's survival and growth, playing a pivotal role in its existence and development According to Ngo Kim Thanh (2011), a well-crafted business strategy serves four primary functions, underscoring its significance for enterprises.

Effective business strategies provide clarity on goals and direction, enabling executives to assess the organization's trajectory and determine the timeline for achieving desired outcomes.

Effective business strategy analysis and planning enable companies to identify their strengths and weaknesses, as well as current and future opportunities and challenges By leveraging these insights, businesses can capitalize on opportunities while mitigating risks, ultimately enhancing their competitive edge in the market.

- The business strategy helps administrators use and allocate existing resources in an optimal way as well as effectively coordinate organizational functions to achieve common objectives

- The business strategy creates strong bases to help businesses proactively work out solutions to market fluctuations, as the basis for their R & D activities

According to Johnson, Scholes and Whittington (2008), the organization has different levels of strategy It is possible to distinguish at least three levels of strategy as follows: a Company-level strategy

Company-level strategy encompasses the overall scope of an organization and its approach to creating value across various business units Key considerations include geographic reach, product or service diversity, and resource allocation among different segments This strategy often involves significant decisions such as mergers, acquisitions, or market entry and exit It reflects the expectations of shareholders and the stock market, typically articulated through a mission statement Understanding company-level strategy is crucial, as it defines the business's scope and serves as the foundation for subsequent strategic decisions.

Businesses are leveraging every opportunity to enhance their market-driven products or services by learning from better-performing companies This approach is part of their growth strategies, which aim to maximize potential in existing markets.

+ Centralized Growth Strategy: A strategy that seeks to increase market share of existing products or services in existing markets through strong marketing efforts Specifically:

 Market entry strategy: It is a strategy to find ways to grow by penetrating into new markets to sell products and services currently being produced or supplied by enterprises

 Market development strategy: It is a strategy to find ways to grow by penetrating into new markets to consume products and services currently being produced or supplied by enterprises

 Product development strategy: A strategy to find ways to grow through the development of new products and services for consumption in markets where the business is operating

 Vertical integration: A strategy of self-sufficiency in production and supply of inputs to the production process or the self- consumption of products

 Horizontal integration: A strategy to find ways to grow through mergers, acquisitions or joint ventures with competitors

 Diversification: is the diversification into new business that is related to current operations or business activities by analogy of production, marketing, technology and others

 Diversification is to seek the methods to grow by targeting new markets with new products that are technologically unrelated to the products that businesses are producing

Stability strategy is the strategy of maintaining business scale as well as stability in the strategic period

 Business field is slowing down or slowing down

 Expenses for market expansion are too high to be effective

 Scale of small business, weak potential

 Enterprises go deep into specialization serving narrow markets

 Encounter unusual fluctuations in the market

 Cost-cutting strategy: This is a temporary short-term strategy aimed at reducing ineffective parts or temporary problems related to environmental conditions

Strategic return on investment involves selling or closing a business to fundamentally transform operations and recover investment capital This approach enables the reallocation of resources, revitalizing existing businesses or creating new opportunities for growth.

 Harvest strategy is a strategy that seeks to maximize the flow of money, without further investment

An effective exit strategy focuses on maximizing returns by selling a business before industry downturns occur This approach emphasizes the importance of a well-defined business unit-level strategy to ensure optimal timing and profitability.

The process of building business strategy of enterprises

Business strategy is crucial for the long-term sustainability and growth of enterprises Developing an effective business strategy goes beyond mere intuition; it necessitates a rational, scientific, and technical approach According to Ngo Kim Thanh, the strategy formulation process consists of seven interconnected and continuous steps.

Figure 1.1 The process of building business strategy of enterprises

Source: Ngo Kim Thanh (2011); Strategic Management Course - National Economics University

1.2.1 Identification of the mission, the current business objectives of the business

Defining the mission and current business objectives is crucial for developing an effective business strategy A clear mission fosters alignment around common goals within the organization and provides a foundation for management to set appropriate objectives and allocate resources effectively Additionally, a well-articulated mission statement serves as a guide for managers in planning the most suitable business strategies.

According to Philip Kotler (2003): “The mission of a company is its manifesto for society, which proves usefulness and meaning in the existence of the

Identification of missions and objectives

Implementation of strategy Establishment of strategic methods

Analysis and selection of strategy

The inspection and evaluation of a company's implementation within society highlight its mission, which embodies the business's purpose and significance for its existence This mission reflects the company's commitment to corporate social responsibility and its role in contributing positively to the community.

In crafting a business mission, it is essential to consider not only the aspirations of leadership but also the internal dynamics of the company's products and services, as well as external factors such as customer needs and competitive landscape This holistic approach ensures that the business's contributions to both the market and society are meaningful, reinforcing its commitment to a clear motto and solidifying its position in the industry.

To effectively pursue their mission, businesses must establish long-term goals that align with their corporate statement to society, as these goals define the necessary accomplishments over an extended operational period These objectives should clarify the business's core activities, the products or services offered, the target customer group, and the market demand It's essential that these goals reflect the business's aspirations and are characterized by specificity, consistency, measurability, feasibility, challenge, and flexibility to ensure success.

1.2.2 Assessment on the external environment of the business

Figure 1.2 Model of external environment analysis (business environment)

Business environment analysis involves evaluating various external factors that impact an organization, enabling it to identify significant opportunities and threats By conducting this analysis, managers can formulate strategies to capitalize on opportunities and mitigate the effects of potential threats The analysis encompasses macro-environmental factors, the micro-environment (also known as the sectoral or operational environment), and the internal environment of the enterprise.

External environment of business, region and worldwide

10 Government a Analysis on the macro environment of the business

The macro environment comprises various factors that indirectly influence an enterprise's operations through their impact on industry dynamics A key tool for macroeconomic analysis is the PESTEL model, which effectively identifies external environmental forces affecting organizations These forces can present both opportunities and challenges The PESTEL model categorizes macroeconomic factors into six elements: Political (P), Economic (E), Social Cultural (S), Technological (T), Environmental (E), and Legal (L).

Figure 1.3 PESTEL model of macro environment analysis

Economic factors play a crucial role in shaping business dynamics, often presenting both opportunities and challenges due to their unpredictable nature Companies closely monitor these macroeconomic variables, such as growth rates, to navigate the complexities of the economic environment effectively.

BUSINESS trend of GDP, economic development, interest rates, exchange rates, inflation, Balance of payments, monetary and financial policies and others

Political and legal factors significantly influence business performance, presenting both opportunities and challenges Companies must assess the political stability and legal framework of their operating environment, which encompasses regulations, policies, taxation, labor laws, and environmental standards Understanding these elements is crucial for effective strategy development, as they can either facilitate growth or pose threats to business operations.

Cultural and social factors significantly influence societal consumption trends over the medium to long term These factors encompass various elements, including population demographics, customs, beliefs, values, attitudes, and lifestyle choices that shape people's views on consumption.

Technological factors significantly influence the business strategies of enterprises, particularly in high-tech industries The emergence of new technologies enhances product superiority, making offerings more comprehensive and competitively priced Consequently, strategic planning must account for rapid technological advancements, necessitating substantial investment in research and development to leverage technological benefits and boost enterprise competitiveness.

Ecological factors play a crucial role in human life and serve as essential inputs for various industries While elements of the natural environment are typically stable, negative trends such as global warming, biodiversity loss, resource depletion, and rising pollution levels pose significant challenges for businesses Consequently, it is imperative for enterprises to thoroughly analyze and assess the opportunities and threats presented by the natural environment during their strategic planning processes.

The micro-environment, also known as the sectoral environment, plays a crucial role in shaping a business's performance, investment climate, competitive strength, and industry profitability According to Michael Porter's Competitive Forces model, various forces significantly impact the overall context of a business environment.

Figure 1.4 Model 5 Competitive Force M Porter

Source: M Porter’s Five Forces (1979) Harvard Business Review

- Competition among competitors in the industry: The first force that

M Porter mentions in the model is the competition among competitors in the industry Competitors are constant pressure and direct threats to the company The increasing competition of existing companies in the industry threatens the company's profitability, survival and development Because of this competition, the company has to increase its investment costs in order to differentiate its product or service from accessing the market or reducing its cost Therefore, the process of

Competition among competitors in industry

In today's business landscape, enterprises must prioritize analyzing competitive threats from substitute products and services Key factors to consider in this competitive analysis include the number of industry competitors, industry growth rates, competitor diversity, product and service characteristics, fixed costs and inventory levels, as well as barriers to entry and exit Understanding these elements is crucial for developing effective business strategies.

CURRENT SITUATION OF THE COMPANY'S REAL ESTATE

About the Company 59 of Ministry of Defense

2.1.1 Introduction of Company 59 of Ministry of Defense

Company 59 is under the Ministry of Defense The Company has a wide scope of activities in the country, has many years of experience in the field of construction, has implemented many large construction projects of the State and the Ministry of Defense

 Name of the company: Company 59

 Type of ownership: state-owned enterprise

 Company 59 is established under Decision no 628/1999/QĐ-BQP dated 12/05/1999 of Minister of Defense on the basis of consolidation of company

 Head office: Floor 10 th , no 9 Dinh Tien Hoang, District 1, Ho Chi Minh City

 Hanoi branch: 36A Ly Nam De – Hoan Kiem district – Hanoi

 Subordinate units: Factory 159, factory 259, factory 359, factory 559, Department of domestic business

Table 2.1 Major business lines of the company 59

1 Construction of houses of all kinds

2 Construction of other civil engineering works

3 Construction of railways and road projects

9 Real estate business, land use rights owner, owner or rent

10 Consulting, brokerage, auction real estate, auction land use rights

11 Architectural and engineering related activities in detail: Architectural design of civil and industrial projects

12 Wholesale of machinery, equipment and spare parts

13 Wholesale of metals and metal ores

14 Rental of machinery, equipment and other tangible goods

16 Installation of water supply, drainage, heating and air conditioning

17 Installation of other system construction systems

18 Production of building materials from clay

19 Production of concrete and products from cement and plaster

22 Wholesale materials and other installation equipment in construction

23 Exploitation of stone, sand, gravel and clay

24 Installation of machinery and industrial equipment

26 Restaurant and catering services for mobile

Source: Business Registration Certificate - Company 59

A number of typical works that Company 59 has implemented in the past (details in the Appendix)

Table 2.2 List of typical works have been implemented

No Name of works Contract value

Source: Profile of construction experience, company 59 2.1.2 Organizational structure of company 59, Ministry of Defense

Source: Department of Personnel Organization - Company 59

OF REAL ESTATE BUSINESS & MANAGEMENT

The organizational structure of Company 59 includes a Board of Directors and various departments, necessitating a diverse team of professionals This team comprises construction engineers, architects, construction machinery engineers, economics graduates, and business management experts proficient in foreign languages Most of the technical and management staff are highly educated, having graduated from both domestic and international universities, and are committed to effectively fulfilling their assigned responsibilities.

Table 2.3 List of capacity of technical workers

No Business fields Quantity Notes

6 Civil and industrial electrical engineer 14

Source: Department of Personnel Organization - Company 59 (2016) 2.1.3 Functions and missions of the Company 59 under Ministry of Defense

Company 59 is specialized in the field of construction, investment consulting and business development housing fund In addition, the company has the right to do business in other areas depending on the capacity at the time allowed for implementation

As a state-owned enterprise under the Ministry of Defense, Company 59 not only meets its obligations like any other business but also plays a crucial role in national defense by providing employment for defense workers and generating revenue for the defense budget Each unit operates as an engineering brigade, prepared to transition to combat service in times of war The company is authorized to conduct production and business activities as outlined in its business license.

The Company ensures the effective management of state-allocated funds, including cash, assets, and land, in accordance with legal requirements and the directives of the Ministry of Defense It adheres to all tax and financial obligations, with annual financial reports subject to approval by the higher-level finance department Additionally, a portion of the profits remaining after enterprise income tax is allocated to the defense budget.

2.1.4 Objectives and core values of the company 59 under Ministry of Defense

 Core value: Safety, product quality is top priority

 Objective: To develop and develop into a multi-disciplinary company, gradually transforming into a major player in the field of project investment

2.1.5 Business results of the company 59 under Ministry of Defense

A summary of the company's financial data for the past three years (2014,

Table 2.4 Summary of financial data

2,2 Analysis of the external business environment of company 59, Ministry of Defense

2.2.1 Macro-environmental analysis a Economic factors

In 2017, Vietnam's economy demonstrated a robust recovery following the economic crisis, with the General Statistics Office reporting a GDP growth of 6.41% in the first nine months compared to the previous year The economy saw a quarterly increase of 5.15%, a second-quarter rise of 6.28%, and an estimated third-quarter growth of 7.46% These figures highlight the effectiveness and timely implementation of government solutions aimed at revitalizing the economy.

Figure 2.2 Vietnam's GDP over the years

Source: Vietnam Economic Statistics 2017, GSO

Up to 15/9/2017, the budget was over 65,2 trillion VND Specifically, total state budget revenue was estimated at 786.3 trillion VND, equaling 64.9% of the year estimate,

Figure 2.3 Total state budget revenue 2017

As of September 15, 2017, total state budget expenditure reached approximately 851.5 trillion VND, accounting for 61.2% of the annual estimate.

In September 2017, the Consumer Price Index (CPI) rose by 0.59% compared to the previous month, with nine out of eleven major commodity and service groups experiencing price increases Notably, the education sector saw the most significant rise, with prices increasing by 5%.

The average consumer price index in the first nine months of 2017 rose by 3.79% over the same period last year

Crude oil Import and Export balance

In September 2017, core inflation rose by 0.08% compared to the previous month and by 1.32% year-over-year Additionally, the average inflation rate for the first nine months of 2017 increased by 1.45% compared to the same period in the previous year.

In 2017, the real estate market experienced significant growth, particularly in the residential sector, with a focus on affordable housing and land development Statistics from the Ministry of Construction revealed that in the first half of 2017, 8,200 new enterprises were established, including 2,300 in real estate, indicating an average of 13 new real estate companies launching daily.

In the first half of the year, the real estate market experienced a significant influx of foreign capital, attracting $19.2 billion in foreign direct investment (FDI), a remarkable increase of 54.8% compared to the previous year, according to a JLL report Additionally, the General Statistics Office (GSO) data indicated that the real estate sector grew by 3.86% over the same period last year, marking the highest growth rate in five years and contributing 0.21% to Vietnam's economic growth in 2017.

Vietnam is experiencing rapid urbanization, as highlighted by the CIA World Factbook (2017) Despite having a low urban population compared to regional counterparts, the country is actively transitioning a significant number of people from rural areas to urban centers This swift urban migration marks a significant shift in Vietnam's demographic landscape.

The speed of urbanization in Vietnam has increased rapidly

Figure 2.6 Speed of urbanization in Vietnam

The rapid urbanization in Vietnam has led to a significant rise in new families, with Ho Chi Minh City and Hanoi seeing annual increases of 58,000 and 42,000 families, respectively This surge has heightened the demand for new housing, while also emphasizing the urgent need to upgrade existing accommodations Currently, approximately 27% of urban residents in Vietnam reside in low-quality housing, a figure that is expected to rise in the coming years.

Figure 2.7 Real estate market in Vietnam 2016

The number of new households, 2016

Source: Savills Consulting and Research team

Demand source of sustainable apartment

Market size in 2016 Domestic market (Ho Chi Minh City and Hanoi)

Ho Chi Minh City and Hanoi to be leading regional markets

Primary transaction - Left Transaction/1000 people - Right

Currently, the real estate market has almost no longer take profits from the

Investment in flat surfing is gaining traction as high rental rates create a dynamic segment in the rental market Hanoi and Ho Chi Minh City currently dominate the region with impressive rental yields With the Vietnamese economy and real estate market experiencing positive transformations, significant opportunities are emerging for businesses in this sector.

Company 59 is poised to capitalize on the surging demand in the real estate sector, particularly in Ho Chi Minh City and Hanoi, by offering houses and apartments tailored to market needs The company plans to implement flexible pricing and payment policies for both individual and corporate clients to enhance product competitiveness Additionally, the rising demand for hotels and resorts aligns with the company’s strategy to expand into luxury hotel and resort construction in areas like Phu Quoc and Nha Trang This growing demand, coupled with a stable economy, presents a significant opportunity for Company 59 A recent survey indicated that 100% of Group 1 respondents viewed this as a favorable business opportunity, with 42 out of 54 participants from Group 2 agreeing.

This is a very important factor for the company to survive and develop Political stability is a strong asset for long-term investment in Vietnam

Analysis of internal environment of company 59, Ministry of Defense

Chapter 1 outlines that the internal environment of an enterprise is influenced by three key factors: human resources, facilities, and invisible resources Understanding these elements is essential for effective resource analysis within the organization.

The company employs approximately 700 social insurance-contracted employees and 2,000 seasonal workers The real estate industry experiences significant fluctuations in labor demand based on project size and location Workers are frequently hired on-site and dismissed upon project completion Consequently, establishing a stable pool of skilled workers is crucial for the company's developmental strategy.

Company 59 with 40 years of operation in the real estate industry has a staff of staff who have a good spirit and work closely with the unit As a military unit, inherited discipline in the military and formal rules in the work Officers holding key positions are qualified engineers and military personnel, the lead agency is the Ministry of Defense should have a link with the Department of Defense

The Board of Directors, department heads, factory managers, branch supervisors, and construction site leaders are all university graduates with extensive experience and seniority in basic construction operations.

Professional sales teams, familiar with the volume of customers are military cadres, officers, middle-income subjects Through the survey, the results showed

Figure 2.8 Survey the sales team through survey questionnaire form 1

Customer feedback, obtained through direct interaction with the sales team, serves as one of the most precise and valuable metrics for businesses The survey results reveal key insights into customer satisfaction and preferences.

Figure 2.9 Survey the sales team through survey questionnaire form 2

The military unit's advantage lies in its structured hierarchy, which can also be its vulnerability, as personnel decisions are often dictated from the top down This centralized approach can impact the effectiveness and morale of the unit, highlighting the delicate balance between authority and individual initiative in military operations.

Excellent Good Average Bad the company director is limited in personnel The organizational structure is lacking in flexibility In the survey panel of experts, the management also reflects this:

Figure 2.10 Survey qualifaction of management and leadership through survey questionnaire form 1 Source: Author 2017

The company's machinery is not operating smoothly, and interdepartmental relationships are strained Although key staff members possess the necessary qualifications and experience, their coordination is lacking Additionally, management has identified that the overall management level is moderate and inconsistent across departments With over 50% of feedback indicating this as a significant weakness, it is crucial for the company to address these issues promptly.

In the past five years, the company has neglected to organize any professional development classes for staff, leading to a lack of focus on training Employees are required to pay 50% of their tuition fees for additional training, which discourages them from enhancing their skills A recent survey revealed that 23% of respondents rated the company's recruitment and training efforts as low to medium, highlighting this area as a significant weakness that has not received adequate attention.

The salary and compensation scheme is not commensurate with the work done, the average income is 5.889,478 VND (2015) The procedure of signing labor

Qualification of management and leadership

Transferring national defense staff through various contract quality levels—excellent, good, average, and bad—poses significant challenges, leading to time-consuming processes This situation risks deterring talent acquisition and may result in a shortage of skilled human resources in the future.

As a specialized construction and installation enterprise, we utilize unique technology tailored to each project rather than mass production methods Our investment in machinery and equipment is substantial, enabling us to effectively execute high-rise building projects, including bridge towers and various construction machinery like rollers, bulldozers, and excavators While the quality of our work heavily relies on skilled labor and high-quality materials, the proper layout of machinery and equipment is crucial to meet essential technical parameters.

The company is fully equipped for architectural and transport construction, featuring specialized machinery for high-rise building projects Details on equipment capacity can be found in the appendix: List of Construction Equipment Positive feedback was received from both interviewed groups regarding the company's equipment and technology.

Figure 2.11 Survey of technological capacity in group 1

The construction equipment primarily consists of outdated machinery from before 2005, and the lack of capital has hindered regular investment in equipment renewal Additionally, the non-specialized nature of the equipment makes it challenging to capture a specific market segment.

Company 59 is assigned to manage a large property that is land fund The total land fund allocated by the Ministry of Defense is 24,200 m2

Table 2.9 Statistics of the land fund allocated for management use

1 No 9 Dinh Tien Hoang, District 1, Ho Chi Minh

2 No 792 Nguyen Kiem, Go Vap District 3,500

3 No 26 Phan Van Tri, Go Vap District 2,000

4 No 6 Pham Ngu Lao, Go Vap District 3,000

5 No 5B Pham Ngu Lao, go Vap District 2,700

6 Trung My Tay ward District 12 10,000

7 145B Nam Ky Khoi Nghia, District 3, Ho Chi

Source: Company profile of Company 59 (2015)

Company 59 has a significant advantage as it manages and utilizes land assigned by the Ministry of Defense in districts 1, 3, 12, and Go Vap Surveys indicate that both group 1 and group 2 exceed a 50% threshold, highlighting the company's effective land use This strategic management of a prime land fund is recognized as a key strength within the SWOT analysis framework.

However, the current exploitation has not fully utilized the real potential of this resource If used well will bring many effects, but otherwise would be a huge waste c Factory

The auxiliary production area in Ho Chi Minh City supports key activities such as steel processing, carpentry, storage, and parking Additionally, it features a system of temporary housing that is ideal for office and camp installations at construction sites.

Weaknesses: The workshop area is not large enough and is well positioned for the development of pre-manufactured concrete products for the construction industry d Finance

The company consistently develops proactive business plans aligned with ongoing economic trends Its investment activities are notably effective in both the Vietnamese and global economic landscapes By actively mobilizing all available capital, the company successfully meets its production and business objectives, achieving results that surpass planned targets, despite having equity at only 31% of regulatory requirements.

Defining of the mission, goals, vision of the business

Company 59 is dedicated to its core values of prioritizing safety and quality, consistently fostering trust among agencies, partners, and customers both within and outside the military As it moves forward, Company 59 remains committed to strengthening these relationships and enhancing its mission.

59 is determined to build and develop a leading real estate company in Vietnam.

Development of strategic options

Based on the analysis of both external and internal environments, we have identified key opportunities and challenges facing Company 59, along with its current strengths and weaknesses Utilizing the SWOT matrix will empower Company 59 to develop business strategies that are in line with its position, allowing for a thorough review and selection of the most suitable strategies for growth and success.

Table 3.1 SWOT matrix proposed business strategy for Company 59

Developed as a leading real estate company in Vietnam

S1 Equipment and machinery meet the construction, interior design of residential civil works

S2 The company is managed using a land fund with a favorable location to exploit

S3 Ability to raise capital to expand production

S4 The company has a large, professional and effective sales team

S5 The company has built the brand for the non-military market

W1 The level of management of specialized departments is limited and uneven W2 The recruitment and training of new staff is not good

W3 The investment cost for renovation of equipment is still low W4 The method of annual planning is also bureaucratic

W5 Debt recovery from customers is slow

T1 The corruption, bureaucracy in the real estate industry T2 The bank tightens lending policies with real estate

T3 The trend of cooperation, trade, merger

T4 The change in technology application in the real estate industry

T5 Regulations and obligations of business units under the Ministry

T6 Real estate agents depend on sales agents, intermediary channels

ST1 Vertical integration growth strategy

ST2 Horizontal integration growth strategy

Law system, policies to support enterprises

O2 Economic growth has increased steadily People's incomes increase

O3 Preferential credit policy for military personnel

O4 Government is interested in investing in infrastructure development

O5 Demand for middle-class housing increased

The SWOT matrix analysis in Table 3.1 identifies the strengths, weaknesses, opportunities, and challenges faced by the company, enabling the formulation of effective business strategies Company 59 has numerous opportunities to leverage its competitive advantages against rivals, leading to the development of targeted business strategies derived from the SWOT analysis.

The longitudinal integration strategy focuses on self-production and supply of inputs for the production process, enabling self-consumption of products This approach leverages the company's strengths in ground preparation, rough construction, and interior decoration, supported by strong capital and the capability to manage all phases from inception to final product Additionally, the company boasts a well-established and reputable sales team, enhancing its market presence Unlike competitors who rely on intermediaries, this company effectively builds, develops, and sells its own products independently.

The horizontal integration growth strategy focuses on expanding through mergers, acquisitions, or joint ventures with competitors Amid a significant trend in mergers and acquisitions, many real estate projects face bankruptcy due to insufficient capital and moderate operations Company 59, with its extensive operational history and strong reputation, particularly under the Ministry of Defense, is well-positioned to acquire other real estate projects, thereby enhancing its resources and restructuring incomplete developments.

Product development strategies focus on growth through the introduction of new products and services in existing markets Company 59 can enhance its offerings by providing complete interior furnishing packages and luxury vacation options, moving beyond the sale of raw apartments The analysis of opportunities indicates a strong demand and supportive policies for middle-class buyers and large military apartments Leveraging Company 59's strengths, it is advisable to concentrate on developing apartments tailored for middle-income families and military personnel.

Analysis and selection of strategic options

Based on the SWOT analysis results presented in Chapters 2 and 3, Company 59 can identify several business strategies aligned with its mission and goals for the next five years Given the constraints of limited resources, it is crucial for the company to evaluate and select the most suitable strategy from the available options The QSPM matrix, as previously introduced, facilitates this decision-making process A survey conducted among experts and company leaders assessed the attractiveness of each strategy, with the QSPM matrix reflecting the average results from 30 collected questionnaires (note: results are rounded).

Table 3.2 Matrix quantitative strategic planning

AS TAS AS TAS AS TAS

Political situation is stable Law system, policies to support enterprises

Economic growth has increased steadily

Preferential credit policy for military personnel

Government is interested in investing in infrastructure development

Demand for middle- class housing increased 3 3 9 2 6 4 12

The corruption, bureaucracy in the real estate industry

The bank tightens lending policies with real estate

Trends in cooperation, mergers and acquisitions

The change in technology application in the real estate industry

Regulations and obligations of business units under the

Real estate agents depend on sales agents, intermediary channels

Machinery and equipment are met construction, interior design of residential civil

The company is managed using a land fund with a favorable location to exploit

Ability to raise capital to expand production 4 3 12 2 8 3 12

The company has a large, professional and efficient sales team

The company has built the brand for the non- military market

The level of management of specialized departments is limited and uneven

The recruitment and training of new staff is not good

The investment cost for renovation of equipment is still low

The method of annual planning is also bureaucratic

Debt recovery from customers is slow 4 2 8 3 12 2 8

Recommendations of implementation of the strategy

Thus, based on the results from the QSPM analysis, we can see the results as follows:

 The vertical integration strategy (ST1) has a total score of 180, and is the lowest scoring TAS option

 The horizontal integration strategy (ST2) has a total score of 189, and is the second best

 Product Development Strategy (SO), which seeks to grow by increasing the number of utilities and services, has a total score of 208, which is the highest overall score

The proposed business-to-product (SO) strategy leverages existing strengths to capitalize on opportunities presented by the economic landscape, aligning with the company's mission and both the external and internal business environments.

To implement the selected strategy, the company needs to implement the following solutions in a consistent manner:

3.4.1 Marketing mix solution a Promoting and building images

In today's media landscape, traditional channels like television (99%) and newspapers (72%) remain dominant, but the Internet is increasingly significant, with 58% of young users accessing it regularly Daily statistics reveal that 95% of Vietnamese people watch TV, while 53% use the Internet, 48% listen to the radio, and 43% read newspapers Consequently, advertising strategies are shifting to prioritize these channels, particularly focusing on product and brand PR Company 59 aims to target middle-income earners in major cities like Hanoi and Ho Chi Minh City, as well as military officers, allowing for more precise advertising efforts.

The company prioritizes the military sector as its core market, ensuring stable employment opportunities Additionally, it plans to focus on middle-income housing in major cities, aligning its strategy with sector policies and development projects at both central and local levels, while designating staff to oversee project progress.

 Carry out marketing, tender or contractor appointment Get turnkey contracts, giving customers many options for building projects with different design options

 Associate with foreign design consultants to find clients from the foreign investment sector

 Organize customer conferences every year, tighten the relationship between customers and businesses

 Implement advertising programs in the form of mass media, sponsorship programs, sports exchanges, culture and arts Participating in domestic and foreign fairs

 Build up professionalism for employees in customer relations

Listening to customer feedback is essential for developing effective policies and ensuring high levels of satisfaction Providing maintenance services after project completion is crucial for ongoing customer support Additionally, implementing strategic marketing efforts will enhance product consumption and visibility in the market.

To enhance the military market, the Company must prioritize customer care and satisfaction The design department should provide clients with expert advice on project utility and efficiency, incorporating new materials and optimal layouts This approach ensures convenience, aesthetic harmony with surrounding structures, and alignment with budgetary constraints, ultimately delivering a high-quality construction experience.

 Prepare sufficient resources and perform well in the construction process to ensure progress, quality and safety

 Effectively implement the work warranty, is willing to take responsibility for the work is not satisfactory

To effectively engage traditional clients such as the Ministry of Defense, Ministry of Construction, Ministry of Transport, provincial People's Committees, and project management boards, it is essential to implement regular customer care programs This includes organizing customer conferences and actively participating in local social initiatives like financing poverty alleviation efforts, constructing gratitude houses, and facilitating sports exchanges Maintaining consistent relationships with these key stakeholders fosters trust and collaboration.

 Provide information on products, programs of application of science and technology, new technology of the company

 Carry out annual product maintenance for the unit's products

 Regularly survey customers about the services and products of the company to make appropriate adjustments

 Train a team of technically savvy employees to meet the needs of our customers

 Create customer profiles to understand current and potential needs in the future to have the right marketing strategy c Development of distribution channel

Currently, the majority of real estate transactions are conducted through intermediaries Company 59, known for its long-standing reputation and strong sales team, should enhance direct sales to consumers by eliminating middlemen Additionally, developing an efficient supply chain is essential for delivering services and products to customers effectively and at competitive costs.

To enhance distribution effectiveness, it is essential to select, evaluate, and develop distributors and agents in accordance with company standards This process involves assessing the distributor's capability to establish new distributor zones and determining the necessary number of marketing and market support staff to assist them effectively.

 Develop policies for distributors (staff support, system development, infrastructure strengthening and others)

 Develop attractive policies for the company's direct sales staff to increase direct sales efficiencies

Develop attractive policies for direct sales staff to increase direct sales efficiencies

 Determine the human resources needs, including quantity, professional qualifications and age, in line with the company's annual development plan

To align salaries and bonuses with societal norms, it's essential to harmonize the interests of both businesses and employees by implementing a reward system that acknowledges and values employees' contributions to the organization.

 Have a transparent and open recruitment policy for all subjects in the society, to avoid the recruitment of familiar factors and family factors

 Revise the system of labor contracts, social insurance, wage payment and remuneration policies for workers, especially for skilled workers and skilled workers

 Improve the functions and duties of the department and for each position by developing and applying the ISO 9001 quality management system in the unit

 Build up a culture within the company, creating a shared value among employees within the unit Create a unity in the company Identify the company as a common roof for everyone

 Develop an annual professional training plan for staffs To dispatch officials to study professional skills and management methods in advanced countries in the region

Partnering with leading universities enhances staff training and knowledge updates Scholarships are offered to qualified students, aligning their skills with company needs, and employment agreements are signed upon graduation.

Investing in new construction equipment and advanced technologies is essential for growth, alongside building a skilled marketing team and renovating production management practices Collaborating with industry peers will facilitate entry into lucrative markets for both foreign and domestic enterprises By concentrating on specialized equipment like bored pile drills and retaining wall drilling machines, the company is poised to seize opportunities in underground and specialized projects, marking a significant turning point in its operations.

Establish a joint venture company in the field of construction of underground works and high-rise buildings with complex structure in order to transfer technology, equipment and construction experience

3.4.4 Financial solution relatively good unit in raising capital for production thanks to the timely and adequate capital adequacy of the Military Commercial Joint Stock Bank However, for sustainable long-term development, investment in construction equipment, the loan can not meet To overcome this, the company must mobilize from the following sources

 Identify Military Commercial Bank as a strategic partner providing long- term credit to finance the company's investment projects

 Mobilize capital from financial leasing organizations and investment funds

 Mobilize the advance funds of customers and business partners to finance the project

 Mobilize capital from equitization of the enterprise and issuing additional shares

 Mobilize capital from staffs in the unit

Some recommendations to the management level

 Perfect the business legal environment on the basis of equality among enterprises in the direction of integrating into the world construction market, in line with international practices

 Simplify investment procedures, improvement of basic construction management procedures

 Promote the prevention of corruption, harassment in the building

Revamping capital management methods in construction investment is essential, particularly by aligning the fiscal year with the country's climate conditions Despite state regulations on capital allocation for various projects, insufficient funding and widespread distribution across multiple works lead to prolonged completion times, resulting in societal losses and increased contractor production costs Additionally, differing opinions on volume processing often delay necessary adjustments, further hindering project completion.

To enhance construction management, it is essential to establish a capital construction management company that replaces traditional project management boards, transforming them from mere overseers into true leaders This shift ensures that projects align with both economic and community efficiency goals, effectively addressing the current issue of numerous construction projects being underutilized and resulting in significant waste for society and taxpayers.

 Amend a number of articles of the Bidding Law, which stipulate price ceilings, floor prices and unreasonableness in adjusting bids

 Have appropriate policies and resolutions in the enforcement of site clearance, avoid the situation as many projects can not be completed because of land clearance

To enhance operational efficiency, it is essential to minimize the interference of higher-level agencies in production and business activities By restructuring organizational frameworks within enterprises, companies can gain greater autonomy in planning and organizing production, allowing them to adapt effectively to their specific circumstances.

 Allow companies to carry out shares at the discretion of the Prime Minister and to reasonably settle policies for employees, especially those who are military employees after equitization

In response to the evolving economy, businesses must adapt their operations and implement strategies that align with current conditions The focus on "Building a real estate business strategy for Ministry of Defense 59" is particularly relevant today, as outdated strategies necessitate the formulation of innovative approaches Through a thorough analysis of the situation, the author has identified key highlights for the development of a new strategy for Company 59.

1 Systematize the theoretical basis of strategy, real estate strategy Introduce a model to build a real estate strategy in line with the reality of the company

2 The questionnaire has been developed, from which the assessment and assessment sheet is composed of strengths and weaknesses; Opportunities - challenges of the company

3 Develop SWOT matrix and propose strategic options, including 3 strategies, including:

 ST1 Vertical integration growth strategy

 ST2 Horizontal integration growth strategy

4 Use QSPM to analyze and select strategic options The result: SO strategy - Product development is the strategy with the highest score

5 Develop solutions to implement SO strategy

6 Recommendations to sectoral and state management agencies

Despite the efforts, the experience and knowledge of the trainees are limited

I anticipate receiving valuable contributions from both teachers and siblings to finalize my thesis, which will also inform the company's strategic development over the next five years.

1 Michael E Porter (1998), Competitive strategy, Statistics Publishing House, Hanoi;

2 Philip Kotler (1997), Marketing management, Statistics Publishing House, Hanoi;

3 Fred R David (2003), Concept of strategic management, Statistics Publishing House, Hanoi;

4 Prof Ph.D Ngo Kim Thanh (2011), Strategic management, National Economics Publishing House, Hanoi;

5 Ph.D Nguyen Thanh Hoi, Ph.D Phan Thang (2001), Management, Statistics Publishing House, Hanoi

6 Michael E Porter (1980), Competitive Strategy, New York, USA

7 Michael E Porter (2008), Competitive advantage, (Translation) Tre

Publishing House; Ho Chi Minh City

8 Micheal E Porter (2009), Competitive Strategy, Tre Publishing House, Ho

9 Garry D, Smith Danny R, Arnold, và BobbyG, Bizzell (1997), Business Strategy and Policy, Statistics Publishing House, Hanoi;

10 Prof Ph.D Hoang Dinh Phi (2011), Curriculum on Management Technology, Vietnam National University Press, Hanoi;

11 Nguyen Thi Lien Diep and Pham Van Nam (2003), Business Strategy and

Policy, Statistics Publishing House, Hanoi;

12 Authors’ group of University of Economics Ho Chi Minh City (2010), Competitive environment of real estate – strategy of Binh Chanh Construction Investment Shareholding (BCCI) at the stage of 2010 – 2015;

13 Ngo Vinh Tu (2007), master thesis, University of Economics Ho Chi Minh City; Building development strategy for Company 59 under Ministry of Defense until 2015

14 Tran Quoc Thai (2006); master thesis in economics, Strategic business plan of Vietnam Export Import Bank until 2015 University of Economics

15 Decree no 76/2015/NĐ-CP dated 10 September 2015; Detailed provisions on implementation of real estate business law

16 Law of the officers of the Vietnam People's Army dated 21 December 1999; Law on amendment and supplementation of articles of law of the officers of the Vietnam People’s Army dated 03 June 2008

Please tick X for the option you choose

Types Content Excellent Good Average Poor

Economic growth has increased steadily People's incomes increase Preferential credit policy for military personnel

Government investment is concerned with infrastructure

Demand for middle-class housing increased

The speed of urbanization is fast The number of new families increases rapidly

Vietnam built an open economy, socialist orientation, global integration

Improve legal institutions Get off to the forefront of technology People's living improves, demand for home ownership increases Flexible and various supplier

Challenges The corruption, bureaucracy in the real estate industry The bank tightens lending policies with real estate

Trends in cooperation, mergers and acquisitions

The evolving application of technology in the real estate sector is significantly influenced by the regulations and obligations set forth by the Ministry of Defense These guidelines ensure that business units within the industry comply with necessary standards, promoting a secure and efficient operational environment As technology advances, adherence to these regulations becomes crucial for maintaining industry integrity and fostering innovation.

The fierce competition in the industry

Administrative procedures are not yet streamlined

Unfair competition in the industry The virtual demand for real estate Regulatory adjustment

Outstanding capital in real estate

Strengths Equipment and machinery meet the construction, interior design of residential civil works

Ability to raise capital to expand production

The company has a large, professional and efficient sales team

The company has built its brand in the non-military market

The company has loyal customers, stable (projects, customers in the military)

The company has a good record of

40 years of experience in real estate The company applies many new technologies in the process of construction execution

The process is professional, professional

Weaknesses The level of management of specialized departments is limited and uneven

Debt recovery from customers is slow

The remuneration policy is not good, not keeping good personnel

The image of state-owned enterprises (slow, bureaucratic) has an impact on the impression of corporate customers or individual customers

The task of urging debt recovery slowly Bad debt is relatively large

The budget budget has a late payment time

Allocation of management costs for each type does not follow a certain criterion

Expenditures of the Company's legal reserves are not high

QUESTIONAIRE STRATEGY SELECTION MATRIX FORM

Dear readers, following the release of Survey Number 1, the author has identified three key strategies aligned with the company's realities To ensure an objective evaluation of each strategy's attractiveness, further input is needed Your cooperation is greatly appreciated!

1 ST1: Vertical Integration Growth Strategy

4 AS: Points of Attraction: The relative attractiveness of strategy versus other strategies, by factor

5 TAS: Determine the total number of points of interest by multiplying the number of points in the column with the AS score

6 In particular: point 1 is not attractive, point 2 means less attractive, point 3 is quite attractive and point 4 is very attractive

Economic growth has increased steadily

Preferential credit policy for military personnel

Government is interested in investing in infrastructure development Demand for middle- class housing increased

The corruption, bureaucracy in the real estate industry

The bank tightens lending policies with real estate

Trends in cooperation, mergers and acquisitions The change in technology application in the real estate industry

Regulations and obligations of business units under the

Ministry of defense Real estate agents depend on sales agents, intermediary channels

Machinery and equipment are met construction, interior design of residential civil

Ability to raise capital to expand production The company has a large, professional and efficient sales team

The company has built the brand for the non-military market

The level of management of specialized departments is limited and uneven

Debt recovery from customers is slow

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