group assignment strategic international business management

To minimize risks, Petro Vietnam needs to establish strong relationships with the Venezuelan government and relevant stakeholders.. Positive relationships with the local government are k

UNIVERSITY OF FINANCE — MARKETING FACULTY OF BUSINESS ADMINISTRATION

TRUONG DAI HOC TAI CHINH - MARKETING

GROUP ASSIGNMENT

STRATEGIC INTERNATIONAL BUSINESS

MANAGEMENT

Nguyễn Hoang Yén Chi — 2121012880

Class Code: 2331910007404

Lecturer: Mr Tran Thé Nam

TABLE OF CONTENTS

CHAPTER I

CHAPTER IITop of Form

CHAPTER I

I Politics

5 Legal

6.Ethical

CHAPTER IV

MARKET ANALYSIS

CHAPTER VI

CONCLUSION

REFERENCES

CHAPTER I EXECUTIVE SUMMARY

The business activities of the Vietnam Oil Corporation - Jomt Stock Company (PVOIL) encompass various sectors of the petroleum industry in Vietnam These include exploration and extraction of oil and gas, storage, transportation, processing, and distribution of petroleum products, as well as specialized services in trade, finance, and insurance related to the oil and gas sector

In the realm of oil exploration and extraction, major oil fields such as Bach Ho, White Rhino, Black Lion, Golden Lion, and Rang Dong have transitioned to a declming production phase Facing difficulties in domestic oil exploration, the Vietnam Oil and Gas Group has expanded its operations internationally, undertaking exploration and extraction projects in Russia, Malaysia, Indonesia, Algeria, Venezuela, and Iraq However, not all of these overseas ventures have been successful, with 24 projects reported as unsuccessful, resulting in a total loss of USD 773 million by 2018

CHAPTER II INTRODUCTION

The Vietnam Oil Corporation - Joint Stock Company (PVOIL) is a member unit of the Vietnam Oil and Gas Group (PVN), established under Decision No 1250/QD-DKVN dated June 6,

2008, by the Board of Directors of the Vietnam Oil and Gas Group, based on the merger of the Petroleum Trading Company (Petechim) and the Processing and Distribution Company for Petroleum Products (PDC) PVOIL transitioned to operate as a joint-stock company on August

1, 2018, following the corporate model

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CHAPTER III PESTLE ANALYSIS

© Regulatory Environment © Currency Exchange Rates © Cultural Sensitivity

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Analysis Of The Vietnam Oil Corporation

¢ Environmental

Technologies

TECHNOLOGY

1 Politics

Venezuela has undergone a prolonged period of political instability, posing challenges for foreign enterprises like Petro Vietnam To minimize risks, Petro Vietnam needs to establish strong relationships with the Venezuelan government and relevant stakeholders Effective negotiations and a deep understanding of the political landscape are essential

The oil and gas industry is often subject to strict control and regulations PetroVietnam should conduct a detailed study of the regulatory infrastructure to ensure that all operations comply with local rules and regulations The risk of nationalization also needs careful evaluation, and PetroVietnam should negotiate reasonable agreements to safeguard its interests

Positive relationships with the local government are key to minimizing risks and fostering a positive business environment PetroVietnam should implement partnership strategies with the government and other political entities to build positive relationships and gain necessary support Flexibility and negotiation skills will aid PetroVietnam in overcoming political

challenges, laying the foundation for a successful international strategy in the 2024-2030 period

2, Economy

In the endeavor to expand Petro Vietnam's business into the Venezuelan market from 2024 to

2030, the economic aspect plays a pivotal role The oil and gas industry, inherently sensitive to oil price fluctuations, poses a significant challenge Venezuela, with its substantial oil reserves, directly influences global oil prices To navigate this challenge, Petro Vietnam needs to establish a flexible financial strategy and budgeting plan based on various oil price scenarios Currency exchange rate volatility is another economic consideration Petro Vietnam must manage exchange rate risks through financial tools and negotiate reasonable agreements to mitigate negative impacts on transactions and profits

A thorough understanding of Venezuela's economic growth is essential An in-depth market study will allow Petro Vietnam to assess economic conditions and forecast growth potential in the oil and gas sector Additionally, Petro Vietnam should stay attuned to the domestic economic challenges in Venezuela, such as infrastructure issues, payment difficulties, and business process intricacies Collaboration with local partners, rigorous research on

infrastructure, and flexibility in payment strategies are key tactics to overcome these challenges Given Venezuela's recent economic struggles, interactions with local banks and financial institutions may present challenges PetroVietnam should focus on building independent and stable financial relationships while exploring collaboration opportunities with local banks and financial organizations

3 Society

Understanding the intricacies of the local labor market and workforce dynamics is imperative for PetroVietnam's successful expansion into the Venezuelan market from 2024 to 2030 Developing comprehensive strategies for local talent acquisition and skill development will be vital This involves not only recognizing the specific skills and qualifications prevalent in the Venezuelan workforce but also understanding the expectations and work culture to effectively integrate local talent into Petro Vietnam's operations

Cultural sensitivity is a key element in Petro Vietnam's approach to business expansion in Venezuela Recognizing and appreciating cultural nuances is crucial for fostering positive relationships with the local community PetroVietnam should adapt its business practices accordingly, ensuring that its operations align with the cultural values and norms of the Venezuelan society This includes communication styles, business etiquette, and social customs

By demonstrating cultural sensitivity, Petro Vietnam can build trust and collaboration within the local community, contributing to the long-term success of its ventures in Venezuela

4, Technology

As PetroVietnam embarks on its expansion into the Venezuelan market from 2024 to 2030, investing in advanced exploration technologies is crucial for optimizing efficiency in oil exploration and production Implementing state-of-the-art technologies such as advanced seismic imaging, reservoir simulation, and data analytics can significantly enhance the accuracy of geological assessments and streamline exploration processes By staying at the forefront of technological advancements, Petro Vietnam can improve its exploration

capabilities, mitigate operational risks, and maximize the extraction of valuable oil resources

In line with global sustamability initiatives and to comply with international environmental standards and local regulations, Petro Vietnam should prioritize the adoption of environmentally friendly technologies The implementation of eco-conscious practices, including cleaner extraction methods, efficient waste management, and reduced carbon emissions, will not only contribute to a positive environmental impact but also align with the expectations of

stakeholders and regulatory bodies By integrating advanced environmental technologies into its operations, PetroVietnam can demonstrate its commitment to responsible and sustainable business practices, fostering goodwill and ensuring long-term viability in the Venezuelan market

5 Legal

Ensuring legal compliance is paramount as Petro Vietnam expands into the Venezuelan market from 2024 to 2030 hese agreements should outline the terms and conditions of collaboration, rights, and responsibilities of each party, and mechanisms for dispute resolution Thoroughly understanding and adhering to local legal requirements and regulations will help mitigate risks and foster a transparent and legally sound business environment for Petro Vietnam in

Venezuela

To safeguard its intellectual property (IP) rights, PetroVietnam must implement robust legal mechanisms This includes registering patents, trademarks, and copyrights as per local and international regulations Additionally, compliance with local intellectual property laws is essential This proactive approach not only protects PetroVietnam’'s innovations and

technologies but also ensures that the company operates within the legal frameworks of Venezuela Establishing a strong legal foundation for intellectual property protection will be crucial for long-term success and innovation sustainability in the Venezuelan market

6.Ethical

Developing and implementing CSR programs that contribute positively to the local community and environment will not only fulfill ethical obligations but also enhance PetroVietnam's reputation This could involve initiatives such as community development projects,

environmental conservation efforts, and social welfare programs By actively engaging in CSR, Petro Vietnam demonstrates its commitment to ethical business conduct and responsible corporate citizenship, fostering goodwill and sustainable relationships within the Venezuelan community

Adhering to ethical business practices is a fundamental principle for PetroVietnam's success in the Venezuelan market This includes conducting all business dealings with integrity, honesty, and fairness Transparency in financial transactions, adherence to anti-corruption policies, and respect for local customs and regulations are essential components of ethical conduct Upholding a strong ethical framework not only ensures legal compliance but also builds trust with stakeholders, including local partners, government entities, and the broader community Ethical business practices are integral to Petro Vietnam's long-term success and positive contribution to the socio-economic fabric of Venezuela

CHAPTER IV MARKET ANALYSIS

Population Growth:

Current: Venezuela's population is large and still growing, which increases the country's need for energy, particularly gas and oil, for industrial processes and the production of electricity Future: Given that population growth is predicted, there will be opportunities as well as challenges in meeting Venezuela's nsing energy demands

Industrial Development:

Current: Due to the growing industrialization of the country, there is an increasing need for a consistent supply of energy, especially for the manufacturing and shipping of goods

Future: There will be a greater need for oil and gas due to anticipated expansion in areas including manufacturing, transportation, and energy

Domestic Supply:

Current: Venezuela boasts a thriving oil and gas sector in which many international

corporations are involved

Future: In the domestic supply chain, particularly in sectors like exploration, transportation, and processing, there is a chance for growth or cooperation

Oil and Gas Industry Development Trends:

Current: The oil and gas sector is expanding as a result of new initiatives and foreign company investments

Future: Opportunities exist to take part in growing initiatives and advancing the oil and gas sector, especially in fields like innovative technology and renewable energy

Gaps and Opportunities:

Gaps: Given the difficulties in guaranteeing a steady energy supply, potential gaps in satisfying the growing energy demand may appear

Opportunities: By offering effective and sustainable energy solutions, taking part in major oil and gas projects, and forging strong local alliances, Petro Vietnam can take advantage of these opportunities

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CHAPTER V THE PROPOSED STRATEGY

Risk Identification and Mitigation

Proactive Approach: The plan places a strong emphasis on taking a proactive stance in order to consistently recognize any hazards This allows Petro Vietnam to anticipate problems before they arise and take appropriate action

Operational Continuity: Petro Vietnam protects operational continuity by promptly addressing risks, averting interruptions that could harm the company's operations

The risk management strategy for Petro Vietnam's expansion into Venezuela is well-thought-out and shows a proactive mindset The focus on ongoing risk identification and mitigation is indicative of a grasp of the dynamic nature of the global business environment The creation of backup plans also shows PetroVietnam's resolve to be resilient in the face of unforeseen obstacles

In order to optimize the efficacy of these tactics, PetroVietnam ought to establish a robust internal culture of risk management, allocate the requisite funds, and cultivate partnerships with external parties Consistent evaluations and revisions to risk mitigation strategies and backup plans will be essential for maintaining flexibility in the intricate Venezuelan market This course of action places PetroVietnam in a position to effectively manage uncertainties and attain operational excellence in its expansion undertakings

Strategic Alliances:

Forming Strategic Alliances with Local Companies: Form strategic partnerships with nearby companies to improve market awareness and fortify Petro Vietnam's position

Close Collaboration with Governmental Bodies: Gain support and successfully traverse regulatory systems by working closely with governmental bodies

Through collaborating with local businesses, PetroVietnam can gain a deeper understanding of the market, cultural quirks, and local regulations This partnership also allows for a more nuanced understanding of the unique opportunities and challenges within the target market By forming alliances with well-established local entities, PetroVietnam can more effectively navigate complexities and tailor strategies to the unique context of the region This

comprehensive understanding is invaluable for making informed decisions and integrating successfully into the Venezuelan business landscape