Các yếu tố Ảnh hưởng năng lực cạnh tranh của doanh nghiệp trong lĩnh vực xây dựng trường hợp nghiên cứu của công ty cổ phần Đầu tư phát triển xây dựng việt nam

Các yếu tố ảnh hưởng năng lực cạnh tranh của doanh nghiệp trong lĩnh vực xây dựng trường hợp nghiên cứu của công ty cổ phần đầu tư phát triển xây dựng Việt Nam

ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG QUẢN TRỊ VÀ KINH DOANH

-

TRẦN HÙNG CƯỜNG

FACTORS IMPACTING CORPORATE COMPETITIVE CAPABILITIES

IN CONSTRUCTION SERVICES: A CASE STUDY OF VIETNAM INVESTMENT DEVELOPMENT CONSTRUCTION JSC

CÁC YẾU TỐ ẢNH HƯỞNG NĂNG LỰC CẠNH TRANH CỦA DOANH NGHIỆP TRONG LĨNH VỰC XÂY DỰNG: TRƯỜNG HỢP NGHIÊN CỨU CỦA CÔNG TY CỔ PHẦN ĐẦU TƯ PHÁT TRIỂN

XÂY DỰNG VIỆT NAM

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2023

ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG QUẢN TRỊ VÀ KINH DOANH

-

TRẦN HÙNG CƯỜNG

FACTORS IMPACTING CORPORATE COMPETITIVE CAPABILITIES

IN CONSTRUCTION SERVICES: A CASE STUDY OF VIETNAM INVESTMENT DEVELOPMENT CONSTRUCTION JSC

CÁC YẾU TỐ ẢNH HƯỞNG NĂNG LỰC CẠNH TRANH CỦA DOANH NGHIỆP TRONG LĨNH VỰC XÂY DỰNG: TRƯỜNG HỢP NGHIÊN CỨU CỦA CÔNG TY CỔ PHẦN ĐẦU TƯ PHÁT TRIỂN

XÂY DỰNG VIỆT NAM

Chuyên ngành: Quản trị kinh doanh

Mã số: 8340101.01

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS NGUYỄN TÚ ANH

HÀ NỘI - 2023

DECLARATION

The author confirms that the thesis‟ research outcome is the result of the author‟s independent work compiled mainly during his study and research period, and it has not been published in any other research and article

The other‟s research results and documentation (quotes, tables, figures, formulas, charts, and other documents) used in the thesis are cited properly with permission of their authors

The author is responsible in front of the Thesis Defense Committee, the Hanoi School of Business and Management, and under the law for this declaration

ACKNOWLEDGEMENT

After studying and researching with the enthusiastic assistance of teachers, friends, and colleagues, thesis Master of Business Administration with the topic “FACTORS IMPACTING CORPORATE COMPETITIVE CAPABILITIES IN CONSTRUCTION SERVICES: A CASE STUDY OF VIETNAM INVESTMENT DEVELOPMENT CONSTRUCTION JSC” has been accomplished To complete this thesis, the author has received great encouragement and support from friends, teachers, and the company

First of all, the author would like to express my deep gratitude to Ph.D NGUYEN TU ANH who enthusiastically guided the author to carry out the research

The author would also like to express my sincere gratitude to teachers & lecturers who provided the author with extremely useful supplementary knowledge during my study at the HSB School of Business and Management, Hanoi National University While carrying out the thesis, the author made efforts to complete the thesis in the best way, but due to limitations of knowledge, time, experience, and references, the thesis might contain mistakes Therefore, the author would like to receive further suggestions and guidance from teachers and colleagues

Thank you so much for the honor!

TABLE OF CONTENTS

DECLARATION i

ACKNOWLEDGEMENT ii

ABBREVIATION v

LIST OF FIGURES vi

CHAPTER 1: INTRODUCTION 1

1.1 Rationale of Research 1

1.2 Review of previous research 3

1.3 Research objectives 5

1.4 Research methodology 6

1.5 Scope of research 6

1.6 Hypothesis 7

CHAPTER 2: LITERATURE REVIEW 8

2.1 Corporate competitive capabilities 8

2.1.1 Definition of competition 8

2.1.2 Classifications and types of competition 10

2.1.3 Corporate competitive capabilities 13

2.2 Corporate competitive capabilities in construction industry 18

2.2.1 Cost capability in construction industry 20

2.2.2 Delivery capability in construction industry 22

2.2.3 Quality capability in construction industry 25

2.2.4 Flexibility capability in construction industry 28

2.2.5 Knowledge management in construction industry 31

2.3 Suggested research model 35

CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY 37

3.1 Introduction about case study 37

3.1.1 General Information 37

3.1.2 History of development 37

3.1.3 Business fields 38

3.1.4 Results of business activities 38

3.2 Research design 41

3.2.1 Methodological approach 41

3.2.2 Research problems 44

3.2.3 Research questions 46

3.3 Data collection and analysis 47

3.3.1 Data collection 47

3.3.2 Analysis methods 47

3.4 Data analysis procedure 48

CHAPTER 4: RESEARCH RESULT 50

4.1 Analysis of survey outcomes 50

4.1.1 Descriptive Statistics 50

4.1.2 Cronbach‟s Alpha 51

4.1.3 Exploratory Factor Analysis 55

4.1.4 Pearson Correlations Analysis 62

4.1.5 Regressions 63

4.2 Summary 66

4.3 Limitations 67

CHAPTER 5: CONCLUSION AND SUGGESTION 68

5.1 Suggestion 68

5.2 Conclusion 69

5.3 Limitations and further research directions of the topic 69

REFERENCES 71 APPENDICE

M&E Mechanical and Electrical

PMBOK Project Management Body of Knowledge (PMBOK® Guide) PMI Project Management Institute

RBV Resource-based view

TQM Total Quality Management

VACC Vietnam Association of Construction Contractors

VINADIC Vietnam Investment Development Construction Joint Stock

Company

LIST OF FIGURES

Figure 2.1 Firm's competitive pyramid (Hoang Dinh Phi, 2011) 15

Figure 2.2 PESTLE model (Aguilar, 1967) 16

Figure 2.3 Five forces model, M Porter (1985) 17

Figure 2.4 Classification of delays by causes 23

Figure 2.5 Root cause diagram for delay of construction works in Tra Vinh 25

Figure 2.6 Suggested Research Model 35

Figure 3.1 Real growth rate of Vietnam construction industry 1990-2018 44

Figure 3.2 Competition environment of construction industry in Vietnam (FPTS, 2019) 46

CHAPTER 1: INTRODUCTION

1.1 Rationale of Research

According to the socio-economic development strategy report for the period of 2011-2020 by the Government of Vietnam, the construction industry is an essential economic sector playing strategic role for the national development The construction, installation and infrastructure development sectors have thrived with an average growth rate of 9.15% per year compared

to 4.75% before 2013 FPT Securities (2019) forecasted in their report on 12/2019 that the construction industry of Vietnam will have an average growth rate of 6.9% per year until 2028, with the market driving force by constructing non-living houses

There has been more attractive for private and foreign enterprises to join the construction market These two groups gradually replace the state enterprises According to the General Statistics Office of Vietnam, the state enterprises only shared 8% of total market revenue by 2016, while the major portions of the market are shared by private and foreign enterprises (87% and 5%, respectively) There are about 74,000 construction enterprises operating

in the local market; most of them are small and medium enterprises This fragmentation led to the highly competitive pressure on the construction market in Vietnam

In line with the growth rate of the construction industry, Vietnam Investment Development Construction Joint Stock Company (hereafter called

“VINADIC”) has had a high growth rate in recent years VINADIC is a construction enterprise established in 2001 as a member of the AMACCAO Group It has a vision of becoming an enterprise with a prestigious brand name, sustainable development, and affirming its high position in the Vietnam

market of general construction works, mechanical and electrical construction, design consultancy, and real estate investment

In recent years, revenue of VINADIC mainly depends on the construction works from a group of major customers such as Vin Groups, Sun Groups, the Ministry of Transport, Hyundai E&C – Ghella, as well as self-investment on the production industry and the energy sector of the AMACCAO Group As a result, VINADIC has grown rapidly from a medium construction company with annual revenue of about VND 700 billion (2015)

to a relatively large company with annual revenue of over VND 2,525 billion (2019) It‟s now equivalent to large and long-standing enterprises in the local construction market such as Fecon Corporation, Licogi Corporation, Song Da Corporation, Delta Construction Jsc, etc The fast growth and extension have posed many challenges for corporate management and potential risks in governance The hot growth might disrupt the balance of its human resources, defined work processes and capital of the enterprise leading to delays in delivery of construction works, decrease in quality, and loss of credibility with clients The internal capabilities need to be reviewed and upgraded following the size and vision of the company In addition, in volatile real estate and construction markets, these kinds of companies always face risks related to a decline in investment or redirection of business from its clients With more substantial competitiveness, the company will be able to find new customers and provide better services to cope with risks better

Referring to the above reasons, the author chose the topic "Factors impacting corporate competitive capabilities in construction services: a case study

of Vietnam Investment Development Construction Jsc” with a desire to give an objective analysis of factors that will influence the company‟s competitiveness and performance Based on that, the company can further study and strengthen its capabilities to achieve higher competitiveness and performance

1.2 Review of previous research

There are quite a lot of research on the competitive capabilities of a company Competitive capabilities are the abilities of a company to capture competitive strengths compared to its primary competitors in its target markets, Roth and Jackson (1995) Kathuria (2000) suggested that four broad competitive capabilities drive business: cost, flexibility, quality and delivery Lin et al (2012) detailed the four well-known competitive capabilities below:

Cost: the most cost-effective way to supply the product and/or to

provide service to customers;

Flexibility: the ability to respond to changes in terms of product range,

design and volume;

Quality: producing and delivering the product and/or service to the

highest possible standards, providing outstanding products of consistent quality;

Delivery: the ability to reliably and speedily deliver product and/or

service Delivery reliability is the ability to meet delivery dates with correct quantities and specifications (Sarmiento et al., 2007), while delivery speed is the ability to fulfill an order promptly

Zhang et al (2011) suggested that at least two theories emerge to explain the patterns of capabilities development: the trade-off theory and the cumulative theory The former means improving one capability is at the expense of another capability; and the latter means simultaneous improvement in several capabilities can be achieved

A number of research focused on the relationship between competitive capabilities and business performance Ferdows and De Meyer (1990), through empirical studies, have reported that competitive capabilities have an impact on business performance More recently, Swink et al (2007) showed empirically that four levels of integration (strategy, customer, supplier and

product/process) lead to improvement in manufacturing capabilities; and that these capabilities improve business performance

Some recent researches have proposed other capabilities in additional

to the four traditional competitive capabilities Zhang et al (2011) proposed service and customization as a new capability for industries located in China and proved that the new capability is mutually supportive with flexibility and delivery capabilities Jayaram and Narasinham (2007) showed that new product development is related to project success, and therefore, it can be considered as a competitive capability

Nguyen Van Tien et al (2019) suggested that competitive capabilities are influenced by five factors: finance, management, marketing, human resources and technology Nguyen (2019) proposed that the five factors affecting the competitive capability of companies in the tourism sector are service quality, human resources, information technology, marketing activities and tourism infrastructure To another extent, Kim (2006) proved that the supply chain has interaction and positively impacts to the competitive capability of a company

Recent studies have shown that firms can have other capabilities Thurer et al (2015) confirmed that in addition to the traditional four capabilities, innovativeness is an important, fifth capability for small and medium-sized firms Likewise, the concept of knowledge management as a powerful competitive weapon has been strongly emphasized in the strategic management literature Knowledge management emerges as essential management and organizational capability in creating value through knowledge Shu-Hui Chuang (2004) confirmed the impact of knowledge management on competitive advantage The proactive management of knowledge assets is essential to achieving both innovation capability and innovation performance Through data analysis, Marianne Gloet and Danny

Samson (2020) revealed the main contributions of knowledge management to systematic and sustained forms of innovation Knowledge was described as the “key competitive sustained resource” and an organization‟s most important asset by Storey and Barnett (2000) Beijers (1999) suggested that knowledge is a primary factor of production on which competitive advantage rests Mohamad (2019) suggested that technical and administrative innovations fully mediated the relationship between knowledge management and firm competitiveness The results of his research consolidate the resource-based view on the importance of internal resources and capabilities of the firm and improve knowledge management research area It also strengthens the view that knowledge management is a critical factor for firm competitiveness

From the above background of research, this study will focus on the four traditional competitive capabilities in the case of VINADIC, which are cost, flexibility, quality and delivery In addition, the author also studies whether knowledge management has an impact as the additional competitive capability for construction contractors through the research on this particular enterprise

1.3 Research objectives

The objectives of this study are as follows:

- Clarify impacts of Cost, Flexibility, Quality, Delivery, and Knowledge management on corporate competitive capabilities of VINADIC

in the construction industry

- Suggest solutions to improve corporate competitive capabilities at VINADIC

To accomplish the above objectives, the author proposes research tasks

as below:

1 Analyze the impact of Cost, Flexibility, Quality, Delivery, Knowledge management on corporate competitive capabilities

2 Propose recommendations to improve corporate competitive capabilities of VINADIC

Data was obtained from 100 respondents using questionnaires with a grading scale from 1 to 5 The data had been collected in approximately two weeks

The secondary data are data that have been published through research papers, financial statements, and published statistical data

The thesis uses the combined methods: qualitative and quantitative The data analysis tool is SPSS software

1.5 Scope of research

- Service: construction works at VINADIC The other businesses of the company like real estate investment, design consultancy are not under the scope of this research

- Content: Analyzing factors affecting corporate competitive capabilities of VINADIC in the construction market, and confirming whether

or not knowledge management is considered as one of competitive capabilities of the construction firm

- Timeframe: the data are mainly collected in the period 2015-2021

1.6 Hypothesis

H1: Cost positively impacts corporate competitive capabilities

H2: Delivery positively impacts corporate competitive capabilities H3: Quality positively impacts corporate competitive capabilities

H4: Flexibility positively impacts corporate competitive capabilities H5: Knowledge management positively impacts corporate competitive capabilities

CHAPTER 2: LITERATURE REVIEW

2.1 Corporate competitive capabilities

2.1.1 Definition of competition

Competition is a vital characteristic of the market economy There are broad and varied definitions of competition and competitiveness concept based on different streams of research and level of analysis

According to the surplus value of Marx‟s theory, competition is a rivalry among capitalists in order to seize favorable conditions in production and consumption of goods to achieve super profits In the deep study on capitalist competition, K Marx discovered that the fundamental of competition

is adjusting the average profit rate among sectors Industries with high profit margins will attract more investors in terms of capital than the others Meanwhile, Samuelson (1997) mentioned the competition in the relationship between market and product consumption, in which enterprises compete for their market share to dominate the competition Under mercantilism, competitiveness

is a different name of productivity, considering the rate of growth of one enterprise compared to the others in the same industry (Krugman, 1996)

There are many levels of competition, such as on national, industry, enterprise, and product scale This thesis will mainly focus on the competition and competitiveness at the enterprise level

If competition is the battle between enterprises in the same environment to increase their value, the competitiveness is about the ability to win the competition and create competitive advantage According to Michael Porter (1985), the leading researcher on competitiveness and competitive strategies, the concept of competitiveness can be understood as the company‟s ability to obtain the market share and generate higher profit than the industry

current average profit In the whole industry, the average profitability of the industry would be increased as a result of the competition

In deeper research, according to the UK Department of Trade and Industry (2001), competitiveness is the capacity to supply the right goods and services of the right quality, at the right price and at the right time On the other hand, Chikan (2008) defined the competitiveness of an enterprise is its capability to sustainably satisfy the requirements of customers at a profit In addition to the concept, Reiljan, Hinrikus & Ivanov (2000) took the conflict-of-interest approach to competitiveness They also identified three different levels of competitiveness as (i) ability to survive, (ii) ability to develop, (iii) superiority Of which, ability to survive is the lowest level of competitiveness, which is the capacity to adapt passively to the competitive environment without any significant change or development The medium level of competitiveness is ability to develop, in which an enterprise is considered to

be competitive if they can actively respond to changes in the competitive environment, thus improving their qualities and efficiency

Superiority is the highest level of competitiveness, in which an enterprise is considered competitive if their operations are more efficient, faster development or better qualities than other competitors, thereby influencing on the competitive environment

Although there are unsettled arguments from different schools of thought, most researchers agree that competitiveness is a complex concept due to the differences in definition and methods of measurement Overall, the concept of competitiveness focuses on 3 major aspects: (1) Different parties (including individuals and organizations) compete with each other in order to improve their position in the market; (2) Competition between the parties aims to obtain specific benefits such as market share, a certain group of customers, potential benefit in order to generate higher profits or maximize

the firm‟s value; (3) The participants might use different approaches (via price, product, brand, marketing, quality of human resources, financial resources, capital resources etc.) to win the competition

2.1.2 Classifications and types of competition

2.1.2.1 Based on market participants

* Competition between sellers and buyers:

It is a competition that takes place according to the "law" of buying cheap and selling high Buyers always want to buy cheap, while sellers always want to sell high This competition is carried out during the bargaining process and eventually the price is formed and the act of buying is taken

* Competition between buyers and sellers:

It is a competition based on the law of supply and demand When a certain type of good or service is supplied less than consumer demand, the competition will become fierce and the price of such goods and service will increase The end result is that the seller will gain a high profit, and the buyer will lose some more money This is a competition where buyers harm themselves

* Competition among sellers:

This is the toughest and fiercest competition; it is vital for any business When the production of goods develops, the number of sellers increases, the competition becomes fiercer because every firm wants to gain a competitive advantage so as to capture the market share over the competitors The results

of evaluating winning in this competition is how sales and market share increase, and along with it, how profits increases and production expands In this race, firms that do not have an appropriate competitive strategy will in turn be pushed out of the market, but at the same time it opens the way for other firms who firmly grasp the "weapon" of competition and dare to accept the rules of development

2.1.2.2 Based on extent of the industry

* Competition within the industry:

It is the competition between firms that produce or consume the same good or service This competition includes merge and acquisition The winning firm will expand their operating range in the market while those losing firms will have to downsize their business or even go bankrupt

* Competition between industries:

It is competition between different economic sectors to achieve the highest profit It can be competition between firms or allied businesses of one industry with another industry Thus, between economic sectors, due to different technical and other conditions such as business environment, regional income, demands and needs, the same amount of capital invested in one industry can yield higher profit margins than other industries That leads to the fact that many people doing business in areas with low profit margins tend to shift to production

in industries with higher profit margins, which is a signal of competition between industries As a result, industries that previously had high profit margins will attract more capitals and increase production scale When supply exceeds demand, causing commodity prices to tend to fall, reducing in lower profit margins In contrast, the industries that previously had low profit margins caused some investors to withdraw their capital and move to other fields, causing the production scale of this industry to decrease, leading to a smaller supply than demand, leading to falling of commodity prices and increasing profit margin In short, the outcome of this competition forms the average rate of return for all industries through the movement of capitals and production capacity between industries

2.1.2.3 Based on the level of competition in the market

* Perfect competition:

It is a form of competition in which there are many sellers and small buyers in the market, where no producer or consumer has the right or ability

to control the market or influencing the prices Perfect competition is described as: All exchanged goods are considered to be the same; all sellers and buyers have full knowledge of the information related to the purchase, sale and exchange; there is nothing to prevent the entry or exit of a buyer or seller into the market To win the competition, firms must find ways to reduce expenses, lower costs or make a difference in their products compared to other competitors

* Imperfect competition:

If a firm can significantly affect the market price of its outputs or products, it is classified as an "imperfectly competitive firm" Thus, imperfect competition is competition in a heterogeneous market Each type of product can have many different types of brands, each type of brand has a different image and reputation, although in terms of quality, the difference between products is not significant The terms of sale are also different Sellers can compete with each other to entice customers in many ways such as: advertising, promotions, price incentives and service before, during and after the purchase This type of competition is extremely popular in the current period Imperfect competition is of two types:

- Monopoly: A competition in which one or more influential actors can force their partners to sell or buy their products at high prices, and these actors have ability to change market price There are two types of monopolistic competition: selling monopolies and buying monopolies Selling monopoly means that in the market there are few sellers and many buyers, therefore the seller can increase the price or define the buying price of the customer if they want to maximize profits, while a buying monopoly is the market which has few buyers and many sellers, then the customer is

considered a powerful entity and can have impact to make decision about buying price In practice, a monopoly occurs if there are no substitutes; creating a monopoly, or monopolies join together would hinder the development of production and make harm to consumers Therefore, there must be an Antitrust Act against the monopolistic union of certain businessmen or firms

- Group Monopoly: This form of competition exists in some industries where there are only a few business firms At this point, competition will occur between a small number of firms Therefore, every enterprise must realize that the price of its products depends not only on the quantity but also

on the activities of other competitors in the market A change in one firm's price will also affect the equilibrium demand for the other firm's products The enterprises participating in this market often are those with strong economic potential and large investment capital Therefore, it is very difficult

to penetrate the market of competitors In practice, it is possible that a group monopoly occurs if there are no substitutes for the monopoly product or the monopolistic firms are allied

Monopolies hinder the development of production and harm consumers Therefore, in some countries there are Antitrust Act against monopolistic alliances between entrepreneurs

2.1.3 Corporate competitive capabilities

2.1.3.1 Definitions on corporate competitive capabilities

There are quite a lot of views on competitiveness of a firm The white book on competitiveness of England (1994) defined that the firm with competitiveness is a firm which can produce the products and services of outstanding quality and lower price than the other competitors Competitiveness also means the achievement of long-term benefit of a firm and the ability to ensure the incomes of its employees and the owners

According to Ministry of Commerce and Industry (England, 1998), “For a firm, competitiveness is the ability to produce the right products, determine the right price at the right moment This means that satisfying the customers‟ demands with greater output and effect than other firms” Competitiveness is construed as “the ability to achieve large market shares against the competitor

in the market as well as the ability to re-gain partially or wholly the market shares of the competitors” in the Dictionary of economics terms

The Organization for Economic Cooperation and Development (OECD) suggested that the competitiveness is “the ability of companies, industries, regions, countries or super-national regions in creating higher employment and incomes in the condition of international competition on the basis of sustainability” While World Economic Forum (WEF) defined that competitiveness means creating new growth, bringing the values for shareholders in terms of enterprise and raising competitiveness means creating new employments and better living conditions in terms of society

Michael Porter (1985) suggested that enterprises should have competitive advantage in the form of or have the lower production costs or have the ability to differentiate products to gain the price higher than the average level in order to achieve successful competition To maintain competitiveness, enterprises should achieve more refined competitiveness so that they can supply the products or services with higher quality or produce at higher efficiency

Hoang Dinh Phi (2011) proposed that firm‟s competitiveness is a degree to which a firm can, under normal market conditions, develop its capabilities to produce goods or services that can be marketed with profit

Figure 2.1 Firm's competitive pyramid (Hoang Dinh Phi, 2011)

According to Nguyen Minh Tuan (2010), enterprise‟s competitiveness

is the ability to maintain and promote competitive advantage in product consumption, network consumption expansion and efficient use of the production elements with the aim of high economic benefits and insurance of substantial economic development In other view, enterprise‟s competitiveness is the ability to build, maintain, use and create new competitive advantage of the enterprise (Vu Trong Lam, 2006) Le Cong Hoa

& Le Chi Cong (2006) proposed that competitiveness of the enterprise is the demonstration of enterprise‟s strengths and advantages in comparison with the competitors in meeting the best requirement of the customers to earn higher profits

It can be summarized that the corporate competitive capability is the ability to utilize its internal and external advantage capabilities to aim for products or services that are attractive to customers in order to sustain and develop it business as well as to gain higher profits and position comparing to competitors In particular, the competitive capability of a construction firm is the ability to create a competitive advantage, capable of creating productivity, high quality and low cost compared to competitors, in order to overcome the competitors to maintain and develop the business itself, best meets the needs

and demand of the market and brings in high income and sustainable development for the business

2.1.3.2 Dimensions on corporate competitive capabilities

There are two well-known theories explaining about corporate competitive advantage, which are market-based view (“MBV”) and resource-based view (“RBV”) The MBV focuses on company positioning in the market Aguilar (1967) proposed the PESTLE analysis discussing macro environmental factors (Political, Economic, Social, Technological, Legal and Environmental) affecting a business

Figure 2.2 PESTLE model (Aguilar, 1967)

While PESTLE focuses on macro environmental factors, Porter (1985) proposed the five force framework focusing on micro environmental factors

in his publication, which consisted of industry rivalry, bargaining power of suppliers, bargaining power of buyers, threat of new entrants and thread of substitutes Assessing these models can provide the information about competitive positions of a firm in the market and in the industry

Figure 2.3 Five forces model, M Porter (1985)

However, there is limitation of MBV Prahalad & Hamel (1994) argued that MBV ignores internal factors that could affect a firm‟s performance such as resources and capabilities The Resource-based view (RBV) is a model that analyze the internal factors of a firm Barney (1995) suggested that the firm will

be successful if it is equipped with resources including financial, physical, human and organizational assets which best suited for its business and corporate strategy The competition among firms is not only about differentiation in resource but also about the ability to coordinate and use them effectively to achieve the firm‟s strategic goals, according to Sanchez & Heene (1997)

Hooley et al (1998) pointed out and argued that RBV is only focused

on analyzing the internal resources but not be able to link the inner capabilities with the external environment This can be fulfilled by SWOT

analysis, which involves the identification of both internal and external factors affecting the business goal (Learned et al., 1995) Piercy & Giles (1989) confirmed SWOT analysis is helpful to figure out competitive advantages for the firm by matching the strengths to opportunities or by converting weaknesses and threats into strengths and opportunities

2.2 Corporate competitive capabilities in construction industry

In general, construction industry is an industry specializing in the field

of consulting, design, construction organization, management, supervision and acceptance of civil construction works, industrial construction works, infrastructure works serving human life such as houses and buildings high-rise buildings, hospitals, schools, factories, commercial centers, roads, bridges, etc

In the Project Management during Construction Stage Curriculum, Dinh Tuan Hai and Pham Xuan Anh (2021) suggested that the construction industry is an important industry to create material and technical foundations for the national economy Compared with other manufacturing industries, construction works have distinct economic - technical characteristics, which are clearly reflected in construction products and the process of creating products of the industry Some of the main characteristics of construction industry are as follows:

First, construction products are large-scale construction and architectural works, so the organization of management and pricing of construction and installation products of the investor as well as the accounting

of construction and installation costs of construction contractors are complicated

Second, construction products are fixed at the place of production, while the production conditions (machineries, workforce, tools, etc.) must be moved according to the place where the production takes place This feature makes the management and use of assets and materials very complicated due

to the influence of natural conditions, weather, security issues and damaging

of materials

Third, the production and installation process must be benchmarked with the estimate, taking the estimate as the basis, and at the same time, the involved parties must buy insurance for construction works to reduce the construction risks

Fourth, construction products are sold according to the estimated price

or the price agreed with the investor through bidding and contracting The commoditization of construction products is quite special, because the exchange of goods takes place before the product is produced

Fifth, the construction period (schedule) often takes a long time from commencement to completion It depends on the scale and complexity of each project

Sixth, the construction process is phased into several stages, each stage

is divided into many different activities, such activities usually take place outdoors, under the great influence of environmental factors such as rain, sun, floods…

Seventh, comparing with other industries, the technology applied in the construction industry is still backward with many jobs still being done manually by workers

Last but not least, the construction industry has shared many characteristics similar to the manufacturing and service industries Like other manufacturing industries, the construction industry also creates physical products, often dictated by factors of cost, scale, and complexity

The above characteristics have a great influence on the production process and implementation of construction projects, from the calculation of production costs and product costing in construction enterprises, to the quality assurance, quantity and time of construction Therefore, project management

skills are essential in the construction industry in general and construction projects in particular

2.2.1 Cost capability in construction industry

FPT Securities (2019) figured out that construction contractors often have capital appropriation by investor (or “client”) during project implementation During the contract period, if the client encounters financial difficulties and cannot pay, it will cause great damage to the contractor, especially low-margin contractors For example, if a customer is unable to pay for a project, the contractor with 20% profit margin has spent 80% of the cost on the first project and needs to undertake 4 projects of equal size to recoup this lost capital But with a profit margin of 2 - 4% of the construction industry, construction contractors need to implement 24 - 49 projects of equivalent scale to be financially recovered To limit this risk, the contractor needs to carefully consider and evaluate the financial potential of the customer before participating in the bidding and signing the contract Vietnam Association of Construction Contractors (“VACC”) has reported in 2022 that outstanding debt has been one of the most painful problems in the construction industry for many years, greatly affecting the cash flow as well

as the survival of construction firms Although the problem has been stirred

up many times, there is still no significant improvement up to date For example, there are many debts outstanding from public investment sectors, although the projects have ended for 2-3 years, still not being settled and paid, while construction firms have to continuously pay interest from banks as they funded for projects by bank loans

FPT Securities (2019) also suggested that the risk of material price fluctuations is the biggest risk that construction contractors have to bear, because (1) the supply of materials depends on the project location and is

difficult to control, (2) the cost of materials accounts for nearly 70% of total construction costs and (3) the pre-tax profit margin of the construction industry is small, on average always below 5% This risk is proportional to the size of the project, not only because of the high project value and complexity but also because the time schedule is often long Contractors can limit this risk by entering into fixed unit-price contracts with economic adjustment instead of lump-sum or fixed-price contracts, but this approach has limited effectiveness and reduces expected profits of project

According to the VACC, most investors use a fixed unit price contract without adjustment at the time of signing, so the contractors have to compensate for losses when the price of raw materials increases For example, the price of steel usually accounts for about 20% of the total project value, the sharp increase in the price of this item in 2021 and 2022 has caused the construction cost to go up aggressively Due to the impact of gasoline prices

in 2022, transportation costs increased, so the prices of all construction materials increased A series of projects are negatively affected by the increase in material prices

Moreover, the construction industry is highly cyclical as construction demands are very sensitive to changes in the economic and regulatory environment The contractor's revenue depends on the signed project, so the workload of a contractor is often unstable and can fluctuate greatly between periods To limit this risk, construction contractors need to increase the flexibility of the production system by mixing the use of subcontractors, seasonal workers and hiring construction machinery

Cost is a critical competitive capability for a construction firm, as it directly impacts the firm's profitability and ability to win new business In a highly competitive industry, firms that are able to offer lower costs than their competitors are more likely to win bids and secure new projects Therefore,

construction firms must strive to optimize their operations and find saving opportunities in order to remain competitive This may involve implementing lean construction techniques, improving supply chain management, and leveraging technology to streamline processes and reduce waste By focusing on cost reduction and operational efficiency, construction firms can differentiate themselves in a crowded market and position themselves for long-term success Additionally, by offering cost savings to clients, construction firms can build strong and long-lasting relationships, which can lead to repeat business and positive word-of-mouth recommendations

cost-2.2.2 Delivery capability in construction industry

In construction industry, delay of the completion can be happened Construction delay is a period that the construction items are prolonged or not completed on time Bramble and Callahan (1987) focuses on the causes and effects of construction delays in the construction industry In their study, they different types of delays that may occur during a construction project Theodore Trauner (2009) suggested to classify delay categories as non-excusable, excusable, compensable and non-compensable type

Figure 2.4 Classification of delays by causes

(Source: Theodore Trauner - Construction Delay, 2009)

Le Hoai Long et al (2008) identified delays and cost overruns in major construction projects studied in Vietnam In this regard, the Government of Vietnam, especially the Ministry of Planning and Investment considers delay and cost overrun of construction projects as the biggest problems in the market Mai Xuan Viet and Luong Duc Long (2011) surveyed and analyzed over 200 construction projects to identify financial-related factors causing construction project delays Finally, four related factors were identified: late payments, poor cash flow management, instability of financial markets and lack of financial resources

Ogunlana et al (1996) studied on the causes of delays in construction projects in Bangkok, Thailand The research shows that, the common causes

of slow progress include: Shortages or inadequacies in industry infrastructure

(mainly the supply of materials); Problems caused by clients and consultants; and Problems caused by contractors' incompetence

In another point of view, Chan et al (1997), with the study of factors affecting the completion progress of construction projects in Hong Kong, have shown that there are five main and common causes affecting the completion progress of construction projects in Hong Kong: “Weakness in risk management and supervision”, “Unforeseeable conditions affecting the project”, “Delays in decision making related to the project”, “The different needs of customers” and “Changes in project implementation time”

Al-Momani (2000) conducted a quantitative analysis of construction delays in Jordan Research results show that the main causes of delays in public works construction are related to design problems, user changes, weather, construction conditions, delays in handing over works, economic problems and an increase in the number of projects

Sambasivan et al (2007) examined the causes and effects of delays in the construction industry in Malaysia and identified 10 important causes of delays in construction projects including: Inadequate planning of contractors; Poor performance monitoring; Weak experience of the contractor; The partner's weak finances and ability to pay for the completed work; Problems with subcontractors; Raw material shortage; Labor supply shortage; Outdated and damaged equipment; Lack of coordination between parties and mistakes

in the construction phase

Huynh Van Hiep (2014) has identified 13 root causes for delay in delivery of construction works: (1) Delayed payment of contractors to labors

& workers; (2) Incorrect information obtained by Soil investigation; (3) Delay

in importing specialized materials; (4) Weak financial arrangement capability

of Contractor; (5) Inadequate planning of contractors; (6) Delay in construction activities of Contractor; (7) Client‟s late payment; (8) Safety

incidents during construction phase; (9) Weather conditions; (10) Lacking of proper machines and raw materials; (11) Lacking of worker on public holidays; (12) Lacking of contractor‟s ability to organize project site, (13) Not proper land clearance and compensation In which, 10 out of 13 of the causes (1, 2, 3, 4, 5, 6, 8, 10, 11, 12) are attributable to the contractor Delay by these causes can be avoided in case the contractor is competent

Figure 2.5 Root cause diagram for delay of construction works in Tra Vinh

(Huynh Van Hiep, 2014)

Dealing with delays is crucial to the delivery capability of a construction firm, as delays can have significant negative impacts on project cost, quality, and client satisfaction A construction firm that is able to effectively manage and prevent delays will be better positioned to deliver projects on time and within budget, which can lead to a stronger reputation, increased client satisfaction, and ultimately, improved business success On the other hand, a firm that struggles with delays may find it difficult to win new business or maintain existing clients, as delays can erode trust and

confidence in the firm's ability to deliver projects

2.2.3 Quality capability in construction industry

In Vietnam, it is required to all participants of construction industry to observe the Laws on Construction (2014) and its subsequent decrees on implementing quality management of construction works (currently the

Decree 06/2021/ND-CP) The quality management process involves different requirement for different entities like client, contractors, consultants, suppliers, etc The construction contractors often produce products as per their own quality management practices complying with certain quality standards

or against specific requirements for a particular project

Each of contractor may have his own quality management program which is always diverse from one company to the other Contractor adopts differently, either each or combinations of quality management philosophy like Total quality management (“TQM”), PMI Project management body of knowledge (“PMBOK”), ISO 9001, etc From the perspective of a construction company, quality management should mean maintaining the quality of construction works at the required standard so as to obtain customers‟ satisfaction that would bring long term competitiveness and business survival for the companies (Tan & Abdul-Rahman, 2005) Companies that use quality tools in managing their projects often have higher maturity levels

Total Quality Management (“TQM”) has become one of the most popular strategies for achieving customer satisfaction and improving organizational performance in recent decades TQM is a management approach of organizing the whole organization to improve business flexibility and effectiveness of its processes through the involvement of each and every unit of the organization (Oakland, 1989) TQM is an organization's management approach, centered on quality, based on the participation of all its members, and aimed at long-term success through customer satisfaction and the benefit of all members of the company and of the society TQM has been recognized as a successful management philosophy in the manufacturing and service industries The adoption of TQM in construction industry has been promoted in some literatures The research of Pheng and Teo (2004) has

suggested that implementing Total Quality Management in the construction industry can acquire similar benefits that have been obtained in other sectors

In their findings, TQM performance measures were reflected through top management commitment, customer involvement and satisfaction, employee involvement and empowerment, customer-supplier relationships, and process improvement and management

Quality management in the ISO 9001:2008 is defined as the degree to which a set of inherent characteristics fulfills requirements The concept of quality management is to ensure efforts to achieve the required level of quality for the product The ISO 9001:2008 focuses on (1) quality management system, (2) management responsibility, (3) resource management, (4) product realization, and (5) measurement, analysis, and improvement It is argued that the ISO 9000 standards series can form and have formed the basis for an efficient and advantageous quality management system

in the construction industry Dissanayaka et al (2001) stressed that the motivators behind the implementation of ISO 9000-certified quality systems for Hong Kong constructors appear to be to qualify for public works tenders, to meet clients‟/customers‟ expectations and to improve the quality of work done Love et al (2000) commented that ISO 9000 certification is not an option but rather a reality for construction companies that wish to retain and sustain their competitiveness in today‟s highly competitive markets Liu (2003) stated that

it is indicative that ISO 9000 has a positive impact on the contractors‟ attitude towards quality

Project Management Institute guided in the PMBOK for the implementation of quality management process by quality planning (identification of quality standards), quality assurance (evaluation of overall project performance) and quality control (monitoring of specific project results) Several tools and techniques can be applied during the

implementation process, such as: benefit/cost analysis, benchmarking, charting, design of experiments, cost of quality, quality audits, inspection, control charts, pareto diagrams, statistical sampling, flow-charting and trend analysis Mathews et al (2001) divided quality tools and techniques that are

flow-in support of quality programs flow-into three maflow-in types, i.e., hard quality tools, mixing methods and soft methods Hard quality tools are formal quality systems, documented quality systems, quality costs, control charts, and statistical sampling standards Mixing methods are strategy and action plans review, flexibility of organization structure, control charts, quality circles, and quality planning tools Soft methods are training, customer satisfaction surveys, regular contact with vendors and external organizations, actions to optimize environment impact, empowerment, self-assessment, and benchmarking

The quality capability of a construction firm is a crucial factor in its competitiveness A construction firm that is able to consistently deliver high-quality projects is likely to have a strong reputation and a loyal client base, which can provide a competitive advantage in a crowded marketplace Clients are often willing to pay a premium for quality work, and a firm that can consistently meet or exceed their expectations is more likely to win bids and secure new projects Moreover, a focus on quality can also lead to cost savings over the long term, as it can reduce the need for rework or repairs and minimize the risk of costly project delays or legal disputes By investing in quality management and continuous improvement processes, construction firms can differentiate themselves from their competitors and establish themselves as leaders in the industry

2.2.4 Flexibility capability in construction industry

In general, flexibility is the ability to respond to changes in terms of product range, design and volume It is, however, hard to have overall

definition suited to all industries Stabryla (2005) defined the flexibility in the construction industry is “flexibility as the opposite of rigidity is a quality enabling effective functioning of a system in terms of existing external conditions and with respect to internal operating capacity, its focus depending

on the level of initiative and the system‟s self-management capacity Flexibility is therefore a specific form of system efficiency and a measure of its independence: it is determined for purposes of maintaining the balance, which may be the volume of effects and/or functional indicator of the system, such as resistance, reliability, or operating intensity” In views of construction product as a project, PMI defines “a project is a temporary endeavor undertaken to create a unique project service or result.” Thus, projects are temporary and close down on the completion of the work they were chartered

to deliver The ability to manage changes in project can be considered similar

to the flexibility in construction works of the contractors In this research, flexibility in construction works can be deemed as the ability of the contractors to cope with possibilities happened during course of project implementation, such as:

 Changes in construction design after contract signing The design

is changed adapting to the actual situation or at the request of Client Both cases often yield the time and cost impact

 Changes in market demands The demands can be different at times due to the needs of different Client, i.e., building, factory, road, bridge, infrastructures, M&E and other auxiliary works For each type of works, different approaching methodologies are required

 Changes in volume of works It can be due to number of projects attending or number and type of contracts signed

 Changes in project requirement The construction deliverables must satisfy different set of standards in different projects

 Changes in working locations, weather conditions in different projects

 Changes in means of communications in different projects

 Differentiation of Clients For example, the international clients require to follow the FIDIC or international contract conditions, while the public investors or domestic clients require to follow the local contract terms

 Effectiveness of managing different project teams

 Effectiveness of managing different suppliers, subcontractors and workers in different projects

The flexibility capability of a construction firm is an essential factor in its competitiveness A construction firm that is able to adapt to changing project requirements, unforeseen events, and evolving client needs is better positioned to succeed in a constantly changing industry The ability to adjust and pivot quickly can help a construction firm stay ahead of the curve, differentiate itself from competitors, and ultimately win new business Additionally, a focus on flexibility can also lead to increased operational efficiency, as it can help reduce the risk of delays and cost overruns Construction firms that prioritize flexibility in their operations and processes are more likely to build strong and long-lasting relationships with clients and partners, which can ultimately lead to improved business success Therefore,

it is important for construction firms to continually evaluate and improve their flexibility capabilities in order to stay competitive in a dynamic and rapidly evolving industry

2.2.5 Knowledge management in construction industry

Knowledge management capability is rapidly becoming a key organizational capability for creating competitive advantage in the construction industry The emergence of knowledge management in this capacity poses enormous challenges to executives of construction firms

Knowledge management has received much attention since the publication of The Knowledge-Creating Company by Nonaka and Takeuchi‟s (1995) According to Mertins et al (2001), knowledge management has been sold as a tool to improve performance with many academic and practitioners advocating the business benefits of knowledge management including revenue growth, shorter design and production times, customer and staff satisfaction, market leadership, etc

Knowledge management appear particularly attractive in the construction industry which is very competitive with low profit margins Specifically, although each project is unique, there are processes that require employees to find out „who knows what‟ and to share „lessons learned‟ in a timely fashion Thus, knowledge management has created considerable interest in many large, geographically dispersed construction companies where there is a need to tap into the knowledge and expertise of employees, regardless of location Anumba et al (2005), in the publication “Knowledge management in construction” claimed that organizations that proactively manage their knowledge stand to reap considerable rewards (cost savings, process efficiencies, reductions in errors and rework, etc.) and will be able to deliver more innovative solutions to their clients

Arif et al (2009) affirmed the presentation of four‐ stage knowledge retention process These four steps are socialization, codification, knowledge construction, and knowledge retrieval The paper also describes four levels of maturity for the knowledge retention model The first level demonstrated the

extent of knowledge sharing in the organization, the second level measured the extent of knowledge shared being documented, the third level measured the effectiveness of storage of documented knowledge, and the last level was

a measure of ease of accessibility and retrieval of the knowledge

Regarding classification of knowledge, Nonaka and Takeuchi‟s (1995) classified distinction between explicit and tacit knowledge The former is that which could be documented and therefore physically stored in either paper or electronic format For the construction industry these include standard operating procedures, best practice guides, construction methodologies etc The latter is that relates to personal experience This is much more difficult to document For construction this covers the know-how of experienced staffs Tacit knowledge is better shared using communication channels such as face-to-face contact, communities of practice, lessons learned, etc

There are two different strategies to implement knowledge management Earl (2001) suggested that the IT-centric strategy focuses on the use of IT tools to facilitate the capture, access and reuse of information and knowledge The knowledge sharing can be facilitated using IT databases such

as project extranets, software and other collaborative tools Beijers (1999), Harman and Brelade (2000) suggested that the HRM-centric strategy focuses

on the establishment of means to motivate and facilitate employees to develop, enhance and use their knowledge in order to achieve organizational goals It fosters a learning organization, creation of networks, identifies and disseminates lessons learned on previous projects, addresses organizational culture, etc

It is important to distinguish between information management and knowledge management, although the latter can be used by information management Knowledge management is defined by Webb (1998) as „the identification, optimization and active management of intellectual assets to