I would like to thank everyone who are Phuc Hung’s staffs and Phuc Hung’scustomers, who have assisted me to be fulfillment with this research’s aims and scopes.They also have spent a lot
Thesis Structure
Thesis structure of this research includes 5chapters, and major content will be described in 03 chapters from Chapter 2 to Chapter 4 as below:
Chapter 1: Introduction Chapter 2: Theoretical background Chapter 3: Research method
Chapter 4: Research resultChapter 5: Conclusion, limitation, implication.
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Successful application of using Business Model Canvas
There are several examples of successful cases by using Business Model Canvas as an important tool to innovate their business model These cases become patterns as Osterwalder and Pigneur summarized in Business Model Generation.
Bhati Airtel — an India’s leading telcos, is one of the first mobile telcos using Business Model Canvas to be considered as a pattern of Unbundling Business Model.
After unbundling its infrastructure business which was outsourced network operation to Ericsson and Nokia Siemen Networks and IT infrastructure to IBM, the company focuses on its core competency: building Customer Relationships (Osterwalder & Pigneur, 2010).
The other typical pattern of using canvas to innovate business model is The Long- Tail Business Model which applying in the transformation of book publishing industry is an example The old book publishing model is built on a process of screening many authors and manuscripts by publishers to find out potential ones which seem to archive minimum sales targets In the contrast, the new book publishing model of Lulu.com is innovated by using model canvas which known as the pattern of The Long-Tail Business Model Lulu.com is a multi-sides platform in which authors and readers is connected with a Long-Tail of user-generated niche contents Authors by using Lulu.com self-service tools are able to publish and sell their books to actual orders (Osterwalder & Pigneur, 2010)
Multi-Sided Platforms Business Model is an innovating model that brings together two or more distinct but interdependent groups of customers and iPhone & App Store is known as the Evolution of a Platform Operator App Store allows users to browse, buy and download application directly from iTunes Store and install them on their iPhones.
Application developers must sales of all applications through App Store and Apple get 30% royalty on each application sold (Osterwalder & Pigneur, 2010)
There are some other patterns of business model using the canvas as an innovating tool such as Freemium or Open Business Models Freemium model can be applied as getting basic functions for free, but has to pay for advance functions; or customers are able to use products for free, but their revenue from advertisements which combine together.
Open Business Models can be used by companies to create and capture value by systematically collaborating with outsides partners It can be “outside-in” by using external ideas within the firms, or “inside-out” by providing external partners with ideas or assets lying idle from the firm (Osterwalder & Pigneur, 2010)
The above examples show that Business Model Canvas can be an important tool for innovating a firm’s business model In order to innovating a business model, the firm should have a team who has business model design ability, strategic thinking and understand how to process the model design with adapting the firm’s specific needs.
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Value Propositions is the center part of Business Model Canvas and it will be linked to the most important part of the canvas which is Customer Segments To ensure the innovating business model is workable, we have to use the Value Proposition Canvas as a design tool Osterwalder & Pigneur (2014) proposed Value Proposition Canvas which will help the firm create value for customers.
The Value Proposition canvas has two sides, Customer Profile and Value Map.
With the Customer Profile, you will clarify your customer understanding With the Value Map, you will describe how you intend to create value for your customer And you will archive Fit between Customer Profile and Value Map when one meets the other Value (Propositions) Map breaks down value proposition detailed into Products/Services, Pain Relievers and Gain Creators And Customer (Segments) Profile breaks down customer detailed into its Jobs, Paints, and Gains (Osterwalder & Pigneur, 2010)
(Source: Osterwalder& Pigneur, 2014) Value (Propositions) Map describes the features of a specific value proposition in business model in a more structured and detailed way It breaks down value proposition into products/services, pain relievers and gain creators Customer (Segments) Profile describes a specific customer in business model in a more structured and detailed way It breaks down customer into its jobs, paints, and gains.
According to author Osterwalder, Value Proposition Canvas is a tool for objectively assessing as well as monitoring needs of the selected customer segments, and analyzing in detail the company's designedvalue that is able to create to meet the needs of the segments In this research, Value Proposition Canvas is used as the basis for designing customer interview questions to find out what their specific needs are.
Value Proposition Canvas can also be used as a finding tool among potential innovative business model, which one is the best fit between offered value propositions and the objective needs of the selected customer segments To calculate level of fit, the author proposes to use ranking method as customer job importance from important down to insignificant, pain severity from extreme down to moderate, gain relevance from essential down to nice to have Value map also uses ranking method as its relevance from essential down to nice to have After applying ranking map, fit map will be drawn to calculate fitting level Each item is considered as fit (to map as 1) or not-fit (to map as 0).
The more items fitted, the more value map fit with customer segments’ needs.
From “Fit Map” calculation result, it is able to select the best fit business model to be recommended as a prototype for innovating a business model.
“Why innovating business model is an essence today? In the context of rapid economic development and more competitive day by day, thus, innovating business model is necessary and can itself be a pathway to competitive advantage if the model is sufficiently differentiated and hard to replicate” (Teece, 2010) According to the report of IBM of worldwide CEO (IBM Report, 2010), “almost CEO agreed that worldwide economic environment will be rapidly changed with the four below aspects: (1) More crises’: bigger, faster and riskier, (2) Higher instable: more difficult to forecast, (3) More complicated: multidimensional, cross-link, (4) Structure: rapid change”
The report also found that “most of CEO is implementing modification of business model and 2/3 among them considers innovating the whole business model” That why, innovating business model is an essential.
CEO worldwide recommends (IBM Report, 2010) that “when a firm facing with the three below environment’s elements that is the time to consider innovating their business model:
(1) Changing of Macro elements: Macroeconomic, law, regulation, economic environment.
(2) Changing of Industry/Market elements: changing of Value Chain, new entrances, customer needs, market segments, technology, etc.
(3) Internal element: changing of products, services, operations, available of resources, etc.””’.
Therefore, it is necessary to study external environment including macro-economic forces, market forces, industrial forces, as well as key trends of market to find out how to innovate and if it is the time to innovate a firm’s business model.
2.2.5 Summary of research theoretical background
According to author Osterwalder, in order to innovate a business model, firstly, it is necessary to study internal environment to find out what current business model is, its status and performance Business Model Canvas can be use as a tool to study existing business model as a basic to assess performance of the business model In this research, the business model canvas will be used to design internal interview form to collect then analyze collected data objectively From the analysis result, it is able to find out what is existing business model of Phuc Hung Holdings and its performance.
As mentioned in item 2.2.3 and 2.2.4, in order to assess external environment and selected customer segments’ needs to find out changing elements of macro economic, industry/market force affecting to the business So secondly, the Value Proposition Canvas can be used to design external interview form to study these changing elements From result of analyzingdata collected regarding (1) changing macro elements, (2) changing industry/market elements, and (3) internal elements, it is able to find out if it is necessary to change business model.
Thirdly, the author recommends to use Business Model Canvas to design potential business model which are innovative for the company It also need to use Value Proposition Canvas to calculate fit level of the potential innovative business model with objective customer segment’s need to find out the best fit as a prototype.
Finally, according to the author, to find out how to innovate business model of a company, after select the prototypes, it is needed to test its workability and monitor its effectiveness and from the testing and monitoring result, we can find out which prototype is the best innovative business model for the company.
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Key players’ current business models: Classification, Strength and Weakness
As proposed in Chapter 3, Sub-item 3.3.5 — Group discussion, the team has had an in-depth interview with expert — Mr Brian Val Davies — a senior project manager of HBP Project Management Company — who has over 40 years of international experience and over 20 years of experience in construction project management in Vietnam He has contributed a lot of precious opinions to the research teamregarding local contractors’ classification, key players’ current business models and its strength/weakness Based on the, the team has focused in discussing and found out below identifications.
After having focus group discussion, the team has an identificationthat currently in Vietnamese Construction Industry, it can be divided into 3 classes of contractor: Class 1:
Big contractor, Class 2: Medium contractor, and Class 3: Small and Tiny contractor Class 1’s contractor is nationwide contractors with big market share and revenue over VND 4.000 billion annually, such as Cotecon, Hoa Binh, Delta Construction, etc Class 2’s contractor is nationwide or region wide contractors with medium market share and revenue from VND 100 billion to less than VND 4.000 billion such as Hancorp’s companies, Vinaconex’s companies, Contrexim’s companies, Cienco’s companies, etc Class 3’s contractor is remaining contractors with small market share with revenue less than VND
100 billion who are private and company limited Most of Vietnamese contractors are Medium, Small and Tiny contractors With the above classification, Phuc Hung is a Class 2’s contractor.
4.3.2 Current business models of key players
The second identification after having focus group discussion of Mr Brain’s opinion that within key players of Civil construction, such as Hoa Binh Construction, Vinaconex, Fecon, or most of other local contractors such as Hancorp, Contrexim, etc., currently they are using DBB model in operation of their business.
As same as civil contractors, industrial and infrastructural contractors such as, Licogi, Lilama, Viglacera, Cienco, Truong Son, Lung Lo, etc., they also have the same business model of DBB model.
The 09 building blocks of DBB business model are as below:
(1) Customer segments (CS): contractor is not select a clear market segment (2) Value Proposition (VP): contractor concentrates in constructing only
(3) Channel (CH): contractor delivers value through bidding process (4) Customer Relationship (CR): contractor does not maintain
(5) Revenue Streams (RS): through construction contracts (6) Key Resources (KR): contractor focuses in investing for construction equipment (7) Key Activities (KA): using labor, construction equipment to process raw material to construction products (8) Key Partners (KP): contractor does not pay attention to (9) Cost Structures (CS): material, labor, equipment and overhead cost Another aspect of this identification is that Coteccons has started innovating their business model Their business model is still DBB model, however, they innovated their approaches with the followings building blocks:
(1) Customer segments (CS): Coteccons selects a clear market segment of private economic sector and Foreign Direct Investment (FDI) sector.
(2) Value Proposition (VP): Coteccons concentrates in Construction management and starting providing civil design value for customer.
(3) Channel (CH): contractor delivers value through competitive quotation, limited and/or nominated bidding process.
(4) Customer Relationship (CR): Coteccons has a department of Customer Care to manage their customers.
(5) Revenue Streams (RS): Coteccons has revenue streams of constructing, procurement, construction management.
(6) Key Resources (KR): Coteccons focuses in investing for construction equipment and management system.
(7) Key Activities (KA): tender process management, construction management and procurement management Recently, Coteccons established civil design department as a key activity and BIM technology study team.
(8) Key Partners (KP): Coteccons has a list of key partners of labor teams, suppliers and sub-contractors.
(9) Cost Structures (CS): Coteccons has cost structures of material, labor, equipment, management and overhead cost Coteccons does not use lowest pricing strategy to win a contract.
Design — Bid — Build bidding method is very common in Vietnam since bidding regulation was applied The research team has identified that the traditional business model has its strengths which are: e Simple in application, not require high standard of management e Not require investment for research and development of technology e Not require using computer technology in their works e Compact organization chart e Suitable for small and medium enterprises and average level of labor.
The team has also identified strengths of the innovative business model of Coteccons are including: e Coteccons is able to concentrate in segments of customer to design a suitable value propositions to deliver to the segments through a reasonable of channels. e Coteccons has capability of well-managed construction process to minimize project delays, variation costs, deputes, etc. e Coteccons has bigger profit margin than the industry average to re-invest for human resource, equipment resources, management capability development, etc., to create competitive advantages for the company.
The DBB business model of local contractors contains of several weaknesses recently, especially in big and complicated projects According the team’s identification, weaknesses of the business model are: e Time to implement construction project is longer e Itis usually need extension of time to complete construction project e Project delay may occur due to complicated coordination during implementation of project e Cost increase easily due to extension of time, cost variation due to longer project implementation. e Not suitable with big and complicated projects e Profit margin is small.
The innovative business model of Coteccons has its above advantages but it still owns weakness which can be specified as below by the team after focus group discussion: e The Conteccons’s innovative business model was not designed with a proper design tools, e Design values provided to customers are limited in civil engineering aspect, e Due to the rapid growth of business, Coteccons’s human resources has to increase rapidly and it contains also newly graduated staffs without appropriated experience and in accordance with the company needs. e Organization chart of Coteccons is quite complicated and does not ensure the major principles of a organization chart to show the report system among departments and levels within the company It causes the duplicated of human resources in the company management and construction management and therefore the effectiveness of management system is less.
Phuc Hung’s current business model: Characteristics and Performance
As proposed in Chapter 3, Sub-item 3.3.3 — Internal interview, the team selected 12 directors/managers/team leaders of Phuc Hung to carry out in-depth interview regarding current business model, as well as its performance up to this moment.
4.4.1 Characteristics of Phuc Hung’s existing business model
According to analysis result of Internal interview including 7 groups of question including Customer segments, Value propositions, Channels, Customer relationships, Key
28 resources, Key activities and Key partners, below characteristics of Phuc Hung’s existing business model have been found out:
According to the interview result, 58% of interviewees agreed and 42% total agreed that Phuc Hung just got an average number of customers and within medium scale And there is still a number of customers in big scale that Phuc Hung has not been reached.
Interview result shows that Phuc Hung is still not capability enough to to execute every scale of civil, industrial or infrastructure construction projects Products constructed by Phuc Hung however is able to carried out of adopted Customer Jobs and able to relieve most of Customer Pains.
Regarding EPC and DB construction projects, Phuc Hung is not capable enough to implement EPC or DB contract at the moment The most common contracts carried out by Phuc Hung is traditional DBB contract.
Regarding Customers Gains, there is still a gap between Phuc Hung’s products and Customers’ Gains that just required gains is covered but not expected, desired and unexpected gains have not been covered.
Among interviewees, 58% of them agreed and 33% total agreed that Phuc Hung gets jobs through open bidding channel, hardly ever gets jobs through other channels as limited bidding, nominated or competitive price quotation.
67% of interviewees agreed that Phuc Hung creates relationship with customers through collecting open bidding advertisements, and few through bidding invitation.
And 75% among them could agreed that Phuc Hung is able to maintain good relationships with customers, receive client’s belief, and several customers nominate Phuc Hung as contractor.
Among interviewees, most of them agreed that Phuc Hung has high capability of key resources including human, management board, finance, assets, and technology resources.
50% of them agreed and 50% total agreed that Phuc Hung is balance in structure and has high quality human resource who are able to promote and develop company’s capability to upper level.
In parallel with human resource, 45% of them agreed and 25% total agreed that Management Board of Phuc Hung is at high level and at young generation who are flexible and adaptable to go forward with innovative business model.
Finance resource, which 67% of interviewees could agreed and 17% agreed, is as good as expectation This resource is an important part of Phuc Hung and need to be improved to ensure transparency and stability of financial status to create competitive advantage for the company.
67% of them agreed and 25% total agreed that Phuc Hung has high capability level of assets resource which are modern model, and fit for large range of project purposes.
And also 45% of them agreed and 50% total agreed that Phuc Hung also has their owned modern technology resource which is difficult to imitate, especially that Phuc Hung has gained a lot of experience in operating the technology in projects through several years.
Key Activities of Phuc Hung, including project management, procurement, construction management, construction machine management and application of technology, are supposed that is at good level which 50% of interviewees agreed and 42% total agreed with this identification.
77% of interviewees agree that Key Partners of Phuc Hung, who are sub- contractors, labor teams, material and machine suppliers, have been engaged with the company through approved lists in a long period and contributed an important role in the company’s business operation.
4.4.2 Performance of Phuc Hung’s current business model
Performance of Phuc Hung’s current business model can be identified by analyzing Revenue Streams and Costs Structure of the interview result.
58% of interviewees agreed and 33% total agreed that Phuc Hung has medium revenue as planned, but revenue growing is at low rate and under target rate In addition, the streams of revenue are unstable and undiversified.
Profit of Phuc Hung is still small and profit growing at low rate Moreover, profitability ratios of the company are under industry average and do not fully utilize the company’s resources as 75% of interviewees agreed and 17% total agreed on the identification.
58% of interviewees agreed and 25% total agreed with the identification that costs structure of Phuc Hung is on the basis of pricing on costs and bidding advantage by low cost strategy.
Direct cost of Phuc Hung’s product is still able to reduce due to 75% of interviewees disagreed that direct cost of Phuc Hung is already at the lowest possible cost.
Therefore, it is still able to reduce the actual rate of material, labor, machine’s wastage to minimize direct cost of product.
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In order to innovate Phuc Hung’s business model, as suggested by Osterwalder &
Pigneur (2010), the team has pursued the following procedure: (i) studied external environment, then (ii) generated as many ideas as possible, analyzed ideas and prioritized shortlisted ideas, reducing the number of ideas to management few; (iii) used Business Model Canvas to sketch out 3 to 5 potential business models, and (iv) used “Fit Map” tools to find out the most satisfaction business model as a Prototype.
As proposed in Chapter 2, sub-item 2.2.4 — Innovating Business Model, it is necessary to study external environment including macro-economic forces, market forces, industrial forces, as well as key trends of market to find out how to innovate and is it the time to innovate a firm’s business model.
And as proposed also in Chapter 3, Sub-item 3.3.4 — Customer interview, in order to study the external environmental factors affecting the selection of a suitable business model for Phuc Hung, the team will select 12 customers out of many previous, current, and potential customers of the company The Customer Interview Form is used to carry out an in-depth interview with the selected interviewees,
Result of interviews is recorded for analysis And analysis results are as below.
As indicated in overview of Vietnam’s Construction Industry, Macro-economic forces have been discussed by the team with the selected customers of Phuc Hung.
Most of the interviewees have the same identification that the Macro-Economic forces are "positive" and that growth prospect of the construction industry in general, civil construction, industrial construction and infrastructure construction in particular are also positive in the coming years.
To analysis of market forces, the team has conducted interviews, collected and analyzed the results of Part 2 — Question 1: Customer Jobs in the Customer Interview Form The analysis results are as follows:
With the current improved macro economic situation in Vietnam, along with a policies supporting for economic development such as maintaining the basic interest rate at low rate, civil construction market is warming up Among the interviewed customers, all customers have plans to invest in project in which 83% of them plan to invest in 3-5 projects in the next 3-5 years The projects are intended to invest in a wide range of sectors, 42% of the planning projects to be invested are civil projects for the purpose of expanding production, business development to meet customer need and increased of market demand.
In industrial construction sector, 33% of planning projects to be invested are industrial projects Vietnam is currently negotiating six new FTAs, and continues negotiating on the TPP -— Trans-Pacific Strategic Economic Partnership Agreement, along with improvements of logistics system and business environment Therefore, the prospect of industrial construction is considered to be very positive in the coming years.
Regarding infrastructural construction sector, with the current poor condition of on-land transport system, as well as the relatively serious energy shortage, in addition to completing the legal framework for PPP — Private Public Partners investment, it will open the prospect of attracting investment funding in infrastructural construction Among the planned projects investment, 17% of them are infrastructural projects.
From the above analyzed of customer jobs’ aspect that most of Phuc Hung’s customers having plans to do their functional jobs, it can be identified that growing prospect of construction industry in the coming years is "positive" From this point of view, in terms of Market forces, which is considered to be the driving force for the development of the construction industry, in which customers are willing to invest their resources in development of projects, this will create a high demand for construction contractors in the sector of civil engineering, industry and infrastructure. b Customer Pains:
Another aspect of market force is considered as Customer Pains when investing projects and which can be found out by analyze result of interview Part 2 — Question 2a: Customer Pains — Project investment affecting factors. e Outcomes of projects investment:
According to the analysis of the interviewed customers’ pains regarding outcomes when investing in projects, these customers are aiming to archive the acceptance of customers and market, or in other words, the owners tend to invest project with the focus in customer needs and in line with market demand.
This is also in line with the general trend of market, as well as the analysis result which 92% of the interviewed customers consider this factor “very important”.
Customers are careful in selection of a favorable projects’ location, designing the of the optimal function, building a variety of utilities, and demanding high aesthetics for their projects According to the analysis, more than 83% of investors considered these factors as “important” To address these paints of customers, it requires project’s consultants to have well-analyzed of market, the needs of end-users, requirements of customers, and must have high ability, experienced and creative in their work.
There are a small number of customers who are now interested in investing in outstanding projects and intend to build environment friendly projects through energy-efficient building designs which are able to achieve green certificate such as LEED or EDGE as only 58% of the interviewees consider these factors as “important”. e Obstacles of project investment:
Project’s investment obstacles can be identified as macro-economic, monetary policy, bank rate, market leverage, and company’s finance status 92% of interviewed customers consider a stable macro-economic forces, an optimal monetary policy, bank rate at 5-10%, a high market leverage and good company’s finance status as “very important” factors affecting their decision in investing projects.
When investing in project, there are several risks for client which are investment management, consultants’ ability, contractors’ capability, construction technique, investment implementing period of time, cost of investment, safety, environment and social awareness To manage these risks, approximate 90% of interviewees agreed that it is “very important” to select high capability of consultants and contractors to be able to manage the above identified risks.
The other aspect of market force is considered as Customer Gains in case of investing projects and which can be found out by analyze result of interview Part 2
CONCLUSION, LIMITATION AND IMPLICA TION
Throughout the period time of the research study, the team has carried out numerous of internal interviews, as well as externally with customers; the research team has found out necessary answers to the research questions of the study.
Regarding the current business model of local Vietnamese contractors, by getting opinions of construction and project management expert, the research team found that most of local contractors such as Licogi, Lilama, Vinaconex, Contrexim, Hancorp, Hoa Binh,
Cofico, etc., currently are still using traditional business model which is Design Bid and Build (DBB) The traditional business model has its weakness that execution time normally is long, time extension and cost variation is frequency occurred, it is not applicable for huge and complicated projects, profitability ratios are low, etc However, there are still strengths of the business model such as it is not required an advanced management level, less spend for construction technique and technology, IT infrastructure is not necessary, or company organization structure is simple, etc In the industry, however there are a very small number of contractors consider to innovate their business model such as Coteccons They are at very beginning of innovative business model which civil engineering and design management is included.
Phuc Hung is a former member of Contrexim Holdings, which has now become a public company after its successful listing on HNX stock exchange since 2009 However, the research team found that the existing business model of the company, which is traditional DBB business model, is still similar to most of other local contractors Most senior managers / head — deputy head of departments agreed that the current DBB business model of Phuc Hung is not at the most effective level although it is considered to have strengths of construction machinery and equipment capability and high quality human resources, however Direct costs have not been reduced and indirect costs are high On the other hand, turnover is not stable and not diversified, leading to many financial risks for the company And the business model’s profitability ratios are all lower than the industry average and do not meet the expectations of the Board of Directors.
By evaluating the context of macroeconomic as well as prospects of the construction industry, according to the analysis result from data collected, the research team determined that this the time for Phuc Hung to innovate its business model With the tools of Business Model Canvas and Value Propositions Design, the team has generated
58 ideas, opinions, analyzed, discussed and found the most suitable business model for Phuc Hung to innovate its business model is “Design and Build” Business Model.
The research team has reported and recommended solutions to innovate Phuc Hung’s business models, differentiate them from competitors and has been agreed by the Board of Directors to test the innovative model as a prototype In the proposed solutions, the most important recommendations are:
1 Phuc Hung to focus on the starting “Value Propositions” block and the three supporting “Key Activities”, “Key Resources” and “Key Partners” blocks for the starting point.
2 Phuc Hung to build up the proposed Value Chain of Phuc Hung based on the designed “Value Map”.
3 Phuc Hung to restructure with an innovative organization chart.
4 Phuc Hung to complete the management system in compliance with the applicable international standard of Quality (SO 9001: 2015), Environment (ISO 9001:
5 Phuc Hung to apply IT infrastructure and ERP management tools throughout the company business activities.
The research team are very positive believing in the proposed solutions for Phuc Hung to success in innovating their business model in order to help them creating competitive advantage and sustainable in long-term growing.
Despite the great support from the Board of Directors of Phuc Hung, as well as the efforts of the entire research team, but due to time limitation, the team was able to design a single innovative business model for Phuc Hung as a prototype On the other hand, due to insufficient time to monitor and collect the results of the “Design and Build” innovative business model, the team has not yet come up with the results of the assessment of the business model’s effectiveness However, the team is completely positive about the results that will be gained from the application of the prototype and the formal adoption of this business model in to long-term development strategy and organization structure of Phuc Hung.
If the time allowed, the research team can complete design another one or two other prototype, as well as quantitative measurement of model’s effectiveness of different models, thereby helping Phuc Hung is able to can select the most effective model.
Beside limitation of time, the research team also had limitation of resources on the research study If resources allow, the research team can conduct a wider range of data collection and analyze a group of local contractors, or sampling big enough number of companies at the same level in Vietnam construction industry to study their performance.
From this point, it is possible to measure the effectiveness and to make higher contributions to overall development of the Vietnamese construction industry It is also able to contribute for local contractors to increase their competitiveness to international contractors, and then to help local contractors to sustainable grow on the pathway of industrialization, modernization and international economic integration.
Based on the finding of the above limitations of the research, the team also identified and recommended some further research implications based on the results of the study within the topic as followings:
1 Impact of “Design and Build” business model on Revenue and Profitability ratios of Vietnamese contractors.
2 Impact of “Design and Build” business model application of domestic contractors on Growing factors of Vietnam's construction industry.
3 Customer satisfaction with contractors applied “Design and Build” business model.
4 EPC business model canvas for local contractor and its business performance measurement.
5 Using Business Model Canvas to design the trend of BIM / LEAN innovative business model of local contractors.
The author are looking forward for comments and feedback from readers and do hope that that the research results of the case of Phuc Hung is helpful and able to be used by other researchers or teams to develop, extend to wider range of research scopes So that the research results have greater contributions to local contractors in particular and to the Vietnam’s construction industry in general.
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Trithuctre (2015) http://ttvn.vn/kinh-doanh/mo-hinh-kinh-doanh-canvas-cua-google- facebook-la-gi-5201597951449.htm
No Interview Questions Agreed level
Has a large number of customer in a wide range n and scale
Just got an average number of customers and tế within medium scale
Only got a small number of customers and hồ within under average scale
2 Value Propositions 21 Company is capability enough to execute every scale of civil projects
22 Company is capability enough to execute every scale of industrial projects
23 Company is capability enough to execute every scale of infrastructural projects
24 Company's products is able to relieve pain of outcomes for customer 25 Company's products is able to relieve pain of obstacles for customer
Company's products is able to relieve pain of
Company has capabilities of EPC contract a execution (EPC)
Company has capabilities of Design and Build
Company has capabilities of traditional Design
*9 Bid and Build contract execution (DBB)
Company's products is able to create required
211 Company's products is able to create expected gains for customer
Company's products is able to create desired
Company's products is able to create unexpected
Company's contracts are awarded mostly under
Company's contracts are awarded mostly under
Company's contracts are awarded mostly under
Company's contracts are awarded mostly under
Customer relationships is created by collecting
+ tendering information on public announcement
Company is contacted with invitation for 42 | limited, nominated tender, or competitive quotation
Company is fulfill with contract's warranty
Customer relationships is maintain in a proper
Company is able to attract customer belief and
+ continue assigning new jobs for the company
Company has huge revenue streams over
Company has medium revenue streams as
543 | Company has small revenue streams under
2 3 4 capabilities and not as planned
54 Revenue growing is at low rate and under target rate
Streams of revenue are unstable and s3 undiversified.
Profit of the company is still small and profit sọ growing at low and under target rate
Profitability ratios of the company are under 5.7 | industry average and do not fully utilize the company’s resources
6 Key resources 6.1 Company has high capability of key resources
Company has high quality human resource to
Management Board of the company has high
64 Company is balance in structure and has high quality human resource 6.5 Company's finance is transparency and stability
Company has capability to continue investing in 6.6 | equipment as well as human resource to promote capability
Company has high capability level of assets 6.7 resource which are modern model, and fit for large range of project purposes
Company owns modern technology resource
“` Í which is difficult to imitate,
7 Key activities 71 Company process management is at high level and effective 72 | Company's purchasing materials are easy to
2 3 4 access, good price, timely delivery
Highly efficient and economical construction 73 | management, ensuring timely completion, minimizing construction delays
Machinery and equipment used to maximum rá productivity and maintained regularly
Company modern technologies in construction 75 | management to increase the efficiency of construction 8 Key partners
Company has a long term relationship with
SI many subcontractors to handle part of the work
Company has a lot of source of direct labor 82 | supply, who can provide a large number of skillful workers.
Company has a diversified supply source of materials, which can be supplied in large ia quantities, minimizing intermediaries and with low prices.
Company has a wide network of suppliers of sé construction machinery and equipment
9 Costs structure 9.1 Company apply low-cost method for its products
Company apply low-price competitive strategy
Direct cost of product is as low as possible, no
Company has optimal construction norms for 9.4 | saving materials, labor and machinery as much as possible 9.5 Management costs, indirect costs, financial costs
2 3 4 are as low as possible, no method to lower down
Company has fully used of the economies of 9.6 scale to lowdown direct cost of materials, machinery and labor
Company has maximized the economies of 9.7 | scope that support each other to create the lowest cost structure.
1: Total disagreed 2: Disagreed 3: Could agreed 4: Agreed 5: Total agreed.
I.1b | Type of Company ILIc | Revenue
I1.1 | Customer jobs II.la | Previous investment projects II.1b | Current investment projects IILIc | Project investment in next 3-5 years ILIc | Type of coming project investment IL.1d | Objectives of coming project investment HỊ.2 | Customer pains a.l Project outcomes a.1.1 | Customers and market acceptance a.1.2 | Project investment location favorable a.1.3 | Building optimal functions a.1.4 | Building variety of utilities a.1.5 | High aesthetics of project investment a.1.6 | Symbolic of project investment a.1.7 | Energy saving of project investment a.2 | Project obstacles a.2.1 | Marco economic stable a.2.2 | Monetary policy optimal a.2.3 | Bank rate at 5-10% a.2.4 | Market leverage a.2.5 | Company's financial status a.3 Project risks a.3.1 | Investment management capabilities a.3.2 | Design capabilities a.3.3 | Construction management capabilities a.3.4 | Construction technique application a.3.5 | Shortening project schedule
2 3 4 5 a.3.6 | High variation costs a.3.7 | Safety issues a.3.8 | Surrounding natural environment impacts a.3.9 | Surrounding social environment impacts b.1 Type of construction investment b.1.1 | Design - Bid - Build (DBB) type b.1.2 | Design and Build (DB) type b.1.3 | Engineering - Procurement - Construction (EPC) b.2 | Effectiveness of EPC/DB type vs DBB type b.2.1 | Less total investment costs b.2.2 | Faster construction schedule b.2.3 | Shorter completion time b.2.4 | Less variation costs during project execution b.2.5 | Minimization of delays during project execution b.3 | Local contractors' capabilities
Coteccons is a major contractor who has bi capabilities of implementing EPC/DB contracts
Coteccons is a major contractor who has not b.3.2 | enough capabilities of implementing EPC/DB contracts but traditional DBB contracts
Hoa Binh is a major contractor who has
33 capabilities of implementing EPC/DB contracts
Hoa Binh is a major contractor who has not b.3.4 | enough capabilities of implementing EPC/DB contracts but traditional DBB contracts
Vinaconex 9 is a major contractor who has bả capabilities of implementing EPC/DB contracts
Vinaconex 9 is a major contractor who has not b.3.6 | enough capabilities of implementing EPC/DB contracts but traditional DBB contracts b.3.7 | Phuc Hung is a major contractor who has
2 3 4 5 capabilities of implementing EPC/DB contracts
Phuc Hung is a major contractor who has not b.3.8 | enough capabilities of implementing EPC/DB contracts but traditional DBB contracts
II.3 | Customer gains a.l Required gains a.1.1 | High recognition of customer/ market a.1.2 | Meet technical requirements
Investment costs and outcomes price are under als planned budget a.2 | Expected gains a.2.1 | High aesthetics a.2.2 | Certified with LEED corticated of energy saving