The report analyzing management strategy and activies case study of ……petrolimex

Research objectives Investigate and analyze the operational strategy of Petrolimex Petroleum Joint Stock Corporation.. Research subject Operational management strategy of Petrolimex Petr

UNIVERSITY OF TRANSPORT HOCHIMINH CITY

FACULTY OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

OF TRANSPORT HOCHIMINH CITY

MODULE: Principle of management THE REPORT

ANALYZING MANAGEMENT STRATEGY AND ACTIVIES

Case study of PETROLIMEX

Class: QC241EC — 011968114103

Group: .2Tempo

Lecturer: Nguyen, Thuy Ngoc Duyen

Ho Chi Minh City, November 29, 2024 1

TABLE OF CONTENTS

SUIMIMARY HH HH HH HH họ TT 1 4 6 1.01 1k1 04 11-14 61 01 66 0606 4

In o ai ố ố ố ố ố ẻ.ẻẻ ốe 4

XS N33) 7 4

II“ a0 4

1.3 Reasons 500i s9 án 09-20 4

'“.c - oi 9o nh hố ốố ố ẻ 4

I5 s0 neo 206 e 4

I1 F6 an 5

05/1011 0611010.49990619) 2218 eee eee 5 In se s-áï lai) 8n 5

1.1 General IntrOdUCfÏOIN - .- ch 6 cờ 5 In 919v on a 5

1.3 IMissioni arid VÏSÏOI: - HH HT HH TH TH To TT HH g0 h0 66 crờ ó 1.4 COPE ' na ốốỐe ó 1.5 0020 1 7

'NT.s on hố ố ố 7

II co ‹ non no sẽ ae 7

CHAPTER 2: BUSINESS ANALYSIE LG LH HH HH Họ KH 4 06 t6 06 0601109 7 Na I7 ae 7

4 PESTTLE Ăn ng cọ TT c1 1 906666600904 7 “x9 nh .- 7

II Zeo cu ố ố ẻ ố .ẻốốốẦe 8

IS 8

' so 8

I0 0n ẽ ọ 1 — ọ 1.1.1 Conclusion Of PESTT LE - - «<< s1 HT no HH TH TH T106 09 6 Le ọ VN c9 1i 8n 10

2.1 Threat of new entranfs: mOCÏFAf€ - - ng ng TH TH HT cà 10 Vy: 000i :0s9) 090v) 0o Asii oan ốố ố 10

VÃc c0) 099) 096-0000) (00s 2-6 10 2.4 Threat of substitute products or servÏCes: mOC©FAf c cQL HH HH HHngH H 1n ng kg ng g1 kg 10 2.5 Intensity of competitive competitive rivalry: hỉgh - cv 1021 1v TH g1 0 1 1n kg g1 8 1e 11

Ho Chỉ Minh City, November 29, 2024 2

Kha Ố 11

3.2 Weakri©SS€S HH ng To no TH TH TT 01c Hee 12 Kc N99 n 12

K MU 12

CN 0621022210190 003000an0-0o0-v)0( 0n 13

CHAPTER 3: CULTURE AND LEADERSHIP ST YLE - c1 SH" ng ng cà 6 14 su si 11 14

INnes 1o ssi00ì (002i 90-9 5i 14

VÄM sei90ni-g-i s01 8 14

K00 i89 c3 0n e 14

A Spirit of solidarity and seo ion e 15

S09 2019i 1i 9 e9i0ïi i9) -50(005065 0 0n 15

SN 2-90 -Ìvi-0ã-01000.- 201905901 nh 15

VN (010 xis 6i o2 nn 15

RE 15

1 Leadership na 7 15

VNI 003960 ni -Ì0i e1 15

3 Petrolimex's Commitment to Human Resources and Employee Developmernt .c cv 1ó

CN 090-2909 án/ in i00 0n 1ó CONCLUSION LG LH HH in Ho T1 04 614 111404 1 6 1ó REFERENCE MAATERIALS Ác HH TH TT cọ To KT TH TH 1 04 04 4 01 9 08 06 17 APPENDIX Q Q Hà HH HH HH HT HT 4 1 0 1 1 08 K00 6 E01 04 4 04 4 18 GROUP MEMBERS AND CONTRIBUTION - HH HH HH TH TL 0904 19

Ho Chỉ Minh City, November 29, 2024 3

SUMMARY

1 Introduction

1.1 Research objectives

Investigate and analyze the operational strategy of Petrolimex Petroleum Joint Stock Corporation

1.2 Research subject

Operational management strategy of Petrolimex Petroleum Joint Stock Corporation

1.3 Reasons for choosing the subject

Petrolimex Joint Stock Petroleum Group is one of the leading enterprises in the petroleum industry in Vietnam, holding a significant market share and playing a crucial role in the national economy Researching Petrolimex helps to better understand the domestic energy market, particularly the factors related to the supply, consumption, and management of petroleum products The company also follows a sustainable development strategy, with initiatives that apply new technologies and invest in clean energy to mitigate environmental impacts Petrolimex stands out for its diversified business model, operating not only in the petroleum sector but also expanding into chemicals, finance, real estate, and services, offering valuable insights into corporate management strategies Additionally, studying this company helps to understand the impact of political and macroeconomic factors on business operations, as well as the process of digital transformation and technology adoption to improve operational efficiency

In particular, in the context of continuously fluctuating world oil prices and increasingly stringent government policies, studying Petrolimex will help us recognize the rechallenges this enterprise is facing and the opportunities for development in the future The business operations of the enterprise, the necessary functions for the organization, the evaluation of the current situation, and the results of each activity Our group has decided to carry out the project "Analysis of the strategies and management activities of the Petrolimex Petroleum Joint Stock Corporation”

1.4, Research missions

- To achieve the research objectives of the project, we have studied the following sections:

- Overview of Petrolimex Joint Stock Petroleum Company

- SWOT analysis [Strengths, Weaknesses, Opportunities, and Threats]

- Analysis of PESTL and Porter's Five Forces, observations on current macroeconomic challenges for

businesses

- Explore the company's culture, structure, and leadership style

1.5 Research methodology

The research methodology will include document analysis, which involves gathering and analyzing information from sources such as books, academic journals, official websites, and related previous research

Ho Chi Minh City, November 29, 2024 4

key topics that are closely related to Petrolimex

1.6 Topic Structure

Chapter 1: Introduction

Chapter 2: Business Analysis

Chapter 3: Culture and leadership style

CHAPTER 1: INTRODUCTION

1 Introduce the company

1.1 General Introduction

Petrolimex (PetroVietnam Oil and Gas Group) is a leading state-owned enterprise in Vietnam, primarily engaged in the oil and gas industry.The company is owned by the Vietnamese government through the State Capital Investment Corporation (SCIC).Petrolimex is the largest distributor and retailer of petroleum products

in Vietnam The company plays a crucial role in the domestic energy sector, with a focus on the import, refining, distribution, and sale of various petroleum products including gasoline, diesel, lubricants, and natural gas

Head office: No 1 Kham Thien St., Kham Thien Ward, Dong Da District, Hanoi, Vietnam

Establishment and development

Figure 1 1 Establishment and development diagram

1.2 Formation and develop

- 1956: Establishment of Petrol, Oil and Grease Corporation

- 1970: Renamed the General Petroleum Corporation

Ho Chi Minh City, November 29, 2024 5

- 1995: The Oil Company Limited and the General Petroleum Corporation are merged

- 2011: Vietnam Petroleum Group was formed from the equitization and restructuring of Vietnam Petroleum Corporation, successfully held IPO in 2011

- 2014: Signed a memorandum of understanding for strategic partnership with JX Nippon Oil & Energy (Japan)

- 2016: Completed a private placement and engaged in a strategic partnership with JXNOE

- 2017: Officially listed on HOSE and became a top listed company on the Vietnam stock exchange

- 2018: Signed a memorandum of understanding with Vietnam Electricity for cooperation in developing clean energy

- 2019: Signed a memorandum of understanding with JX NOE to jointly research LNG and LPG in Vietnam

1.3, Mission and vision:

Petrolimex’s main mission is to ensure a steady supply of petroleum products, expandits market reach, innovate sustainability, prioritize customer satisfaction, and contribute positively to society through responsible business practices

Petrolimex's vision centers on maintaining market leadership in Vietnam's energy sector through innovation, sustainability, and global integration They prioritize customersatisfaction, ethical operations, and social responsibility, aiming for growth while responsibly meeting energy demands

1.4 Core Values

For 65 years, Petrolimex has evolved, shaped by the dedication and expertise passeddown through generations of its workforce Rooted in this heritage is a forward-thinking strategic direction, embodying the essence of the present era Anchored by its core values, the Petrolimex brand stands resolute, committed to maintaining its distinct identity while steering production and business endeavors in alignment with a sustainable development trajectory.This stead fast commitment serves the mutual benefit of shareholders, partners, and clientele, ensuring enduring value for all stakeholders

Heritage

Development

Figure 1 2 Core values of Petrolimex

Ho Chi Minh City, November 29, 2024 6

Diversity: Respect difference and diversity

Humanity: People-centered activity

Development: Non-stop innovation to maintain the leading position in the market

1.5 Main products

Petroleum: Petrolimex provides gasoline, oil, and fuel for transportation, industry, and daily life Chemicals and lubricants: Lubricants, additives for industry, agriculture, and vehicle maintenance

services

Gas (LPG): Distributes gas for households, industry, and other applications

Services: Distribution, transportation, warehousing, and energy-related services

1.6 Achievements

In addition, Petrolimex also have some achievements & awards like:

Labour hero

Independence Order First class (second time)

Top 50 best listed company,

Champion of revenue for the fourth consecutive year

1.7 Market and operating network

Domestic market: Petrolimex is the leading company in the Vietnamese petroleum market, with more than 50% market share in the petroleum industry

International market: Petrolimex also participates in the international market through exporting petroleum and related products, as well as investing in companies and projects abroad

Distribution network: Petrolimex has more than 2,000 petroleum stores, retail stations and port warehouses across Vietnam, along with a professional distribution and transportation system

Petrolimex (Petrolimex Petroleum Joint Stock Company) enjoys a very high level of recognition and prestige in Vietnam's oil and gas industry due to its long history and strong business track record As one

of the most influential companies in the Vietnamese economy, Petrolimex has built a powerful brand over more than 60 years of operation

CHAPTER 2: BUSINESS ANALYSIS

| Internal analysis

1 PESTLE

For Petrolimex, an in-depth analysis of these factors will provide detailed information on potential opportunities, threats in the market and areas that need strategic adjustment or focus It helps to build strategies that are in line with both market trends and management needs, ensuring sustainable growth and competitiveness

Ho Chi Minh City, November 29, 2024 7

Political Stability: Vietnam has a stable political environment, which facilitates business operations for Petrolimex

Energy Policy: The government is promoting the development of renewable energy and reducing dependence on fossil fuels, which could impact the long-term demand for petroleum products The government aims to increase the share of renewable energy to 20% by 2030 and 30% by 2050

Taxes and Fees: Taxes and fees related to petroleum products can affect the retail price and profits of Petrolimex The special consumption tax on petroleum products accounts for about 30-40% of the retail price

International Relations: Geopolitical tensions and trade conflicts may impact the supply of petroleum and the operations of Petrolimex The Russia-Ukraine conflict has enhanced global oil supplies and caused price fluctuations

1.2 Economic

GDP Growth: Stable economic growth in Vietnam will boost the demand for petroleum products In 2022, Vietnam's GDP grew by 8.02%, the highest in 11 years, contributing to a 16% increase in petroleum consumption compared to 2021

Inflation: High inflation can reduce consumers’ purchasing power and affect Petrolimex's revenue Inflation in Vietnam in 2022 was 3.15%, which could impact consumers' spending capacity on petroleum products Exchange Rates: Fluctuations in exchange rates can affect the cost of importing petroleum and Petrolimex's profits The increase in the value of the US dollar against the Vietnamese dong in 2022 raised the cost of petrol imports for Petrolimex

Per Capita Income: Growth in per capita income will increase the demand for petroleum products and other services Vietnam's per capita income in 2022 was 4,110 USD, a 5.6% increase compared to 2021, which could drive up the demand for petroleum consumption

1.3 Social

Lifestyle Changes: Trends toward green living and the use of public transportation may reduce the demand for personal vehicles and petroleum consumption Many major cities in Vietnam are encouraging people to use public transport and bicycles to reduce environmental pollution

Environmental Awareness: Consumers are increasingly concerned about environmental issues, creating opportunities for Petrolimex to develop green products and services Petrolimex has launched the

"Petrolimex Green" program to raise environmental awareness and promote the use of eco-friendly products

Population and Demographic Structure: Population growth and the expansion of the middle class will drive

up the demand for petroleum products Vietnam's population is expected to reach 100 million by 2025, with the middle class making up a significant portion, creating substantial demand for petroleum consumption

Ho Chi Minh City, November 29, 2024 8

Electric and hybrid vehicles: The development of electric and hybrid vehicle technology could reduce the demand for petroleum products in the future VinFast, a Vietnamese electric vehicle manufacturer, has launched several electric vehicle models and aims to become the leading electric vehicle brand in Southeast Asia

Biofuels: The development of biofuels could create competition with traditional petroleum products The Vietnamese government is promoting the use of E5 biofuel and aims to increase the blending ratio to 10% by

2030

Oil refining technology: Advances in oil refining technology could help Petrolimex improve production efficiency and reduce costs Petrolimex has invested in upgrading and expanding the Dung Quat Oil Refinery

to increase capacity and improve product quality

Information technology: The application of information technology in management and sales can help Petrolimex improve operational efficiency and customer experience Petrolimex has launched a mobile application that allows customers to make online payments and access information about products and services

1.5 Environment

Climate Change: Extreme weather events caused by climate change could impact transportation and petroleum consumption Storms and floods can disrupt traffic and reduce the demand for petroleum products

Environmental Pollution: Petrolimex needs to comply with environmental regulations and minimize the negative environmental impacts of its business operations Petrolimex has implemented measures to reduce environmental pollution, such as using advanced emission treatment technology and oil spill collection systems

Renewable Energy: The development of renewable energy could reduce the demand for fossil fuels The growth of solar and wind energy could decrease the need for petroleum in electricity generation

1.6 Legal

Competition Law: Petrolimex must comply with competition laws and avoid anti-competitive practices Petrolimex is not allowed to engage in price-fixing agreements with competitors or abuse its dominant market position

Consumer Protection Law: Petrolimex needs to ensure product and service quality, provide transparent information, and protect consumer rights Petrolimex must ensure that petroleum products meet regulatory standards, display prices publicly, and address customer complaints appropriately

Intellectual Property Law: Petrolimex needs to protect its intellectual property assets such as trademarks, brand names, and technologies Petrolimex has registered its brand and trademark in Vietnam and many other countries

1.1.1 Conclusion of PESTLE

Ho Chi Minh City, November 29, 2024 9

regulations, and particularly cost pricing to maintain and achieve sustainable growth in the context of a volatile energy market.Because when fuel prices rise, inflation will escalate because the prices of most goods and services depend on transportation and energy costs This can lead to price increases in the economy, making it difficult for consumers.The increase in fuel prices directly affects people's living costs, especially for low-income families They will face rising costs for travel, goods transportation, and services, which will reduce their purchasing power Additionally, inflation will lower the quality of life for those with stable incomes, as the prices of essential goods such as food, medicine, and basic services will rise significantly

2 Five forces analysis

2.1 Threat of new entrants: moderate

The oil and gas industry typically requires significant capital investment for exploration, drilling and refining Established companies like Petrolimex benefit from economies of scale and have extensive distribution networks However, the threat could increase if there are changes in regulations, making entry easier for new entrants

Another petroleum company in Vietnam is PV Oil (PetroVietnam Oil Corporation) PV Oil is a member unit of Vietnam Oil and Gas Group (PetroVietnam) and operates in the field of purchasing, selling and distributing petroleum and other petroleum products This company provides products such as gasoline, diesel oil, fuel oil, lubricants and other ancillary products for the energy market in Vietnam PV Oil is also participates in large projects such as building petroleum storage and distribution facilities nationally The appearance of PV oil can lead to fierce competition in the petroleum industry

2.2 Bargaining power of buyers: low to moderate

Buyers, such as industrial clinents, and individual consumers, may have moderate power They can switch between suppliers based on price and service quality However, the oil and gas industry is essential, and few alternatives may limit the bargaining power of buyers to some extent

Not to mention ordinary people buying gasoline, buyers of Petrolimex, especially large-scale entities like airline companies or shipping corporations, wield significant bargaining power due to their substantial volume of fuel purchases These buyers can leverage their high demand to negotiate better prices or more favorable terms from Petrolimex Additionally, if these buyers have alternative fuel suppliers or if market conditions shift, they can easily switch, giving them additional leverage in negotiations

2.3 Bargaining power of suppliers: moderate

Petrolimex may face moderate bargaining power from its suppliers, including oil producers and equipment manufactures While there are relatively few major oil producers, the global nature of the industry and the importance of secure and stable supply chains may give suppliers some negotiating power

Petrolimex mainly imports petroleum from abroad and due to the impact of the Russia- Ukraine conflict, by

2022 crude oil supply will decrease sharply and crude oil prices will increase, affecting Petrolimex’s inputs In addition, Petrolimex imports domestic goods from two oil refineries: Binh Son (Quang Ngai) and Nghi Son

Ho Chi Minh City, November 29, 2024 10