Enhancing competitive advantages of building materials production companies under the ministry of construction

1 PREFACE research also examines the impact of competitive advantages on these companies’ performance Finally, the research proposes solutions to enhance these competitive advantages Research scope: Date collection: The sample of all 43 building materials production companies under Ministry of Construction has been selected These businesses cover four main areas in building materials production: construction glass, sanitary ware, granite and ceramic tiles; brick and clay products Geographic area: The companies selected have been locating and operating in all provinces in Vietnam Timing: secondary data had been mainly collected during the period 20082013 Primary data had been collected and analyzed during period 2012 – 2013 Rational: In order to maintain market share, improve business’s effectiveness and efficiency, it is very important to enhance company’s competitive advantages The questions how to help companies make the right and effective decisions to enhance competitive advantages; which solutions can help companies improve their competitive advantages will be more and more important not only for business practitioners but also for researchers Due to the above reasons, in the current competitive environment, the enhancement of competitive advantages for Vietnamese businesses in general and building materials production businesses under Ministry of Construction in particular will be urgently and strongly required The thesis with the title Research methodology: In order to achieve it’s objectives, there are steps: “Enhancement of the competitive advantage for building materials production companies under Ministry of Construction” is very necessary and important Table 1.1: Research steps theoretically and practically Aims of thesis: The thesis’s objectives are identifying competitve advantages of building materials production businesses under Ministry of Construction; exploring resources, especially intangible resources that create these competitive advantages The thesis’s objectives are specified by the following research questions: Firstly: Current competitive advantages of building materials production businesses under Ministry of Construction? Secondly: Which tangible and intangible resources play imprtant roles in creating competitive advantages of building materials production businesses under Ministry of Construction? Thirdly: Which solutions can help to enhance competitive advantages of building materials production businesses under Ministry of Construction? Research Scope and Objectives: Research objectives: the research objectives are competitive advantages and the impact of intangible and tangible resources on these competitive advantages of building materials production businesses under Ministry of Construction The STT Research Objectives Interviewees Literature review, research modeling, clarifying practical and theoretical contribution of the research 05 company’s managers 08 current customers 05 business researchers Specify competitive advantages; Specify resources creating competitive advantages for companies 04 focus group discussions with customers in four main areas 04 focus group discussion with managers in four main areas 900 manager at building materials production companies in four main fields: building glass, sanitary ware, granite and ceramic tiles, bricks and clay products Check the relationship between tangible, intangible resources and competitive advantages Check the total impact of these resources on company’s competitive advantages Check the relationship between competitive advantages and company’s performance (Source: Author) Data collection and analysis Secondary research In-depth interviews Focus group discussions Survey Questionnaires Aggression analysis CHAPTER 1: LITERATURE REVIEW OF THEORY ON Thesis structure: COMPETITIVE ADVANTAGES OF MANAFACTURING Thesis includes the following components: COMPANIES Introduction This chapter includes three main parts as summaried as bellows: Chapter 1: Literature review of theory on competitive advantages of 1.1 Sources of Company’s Competitive Advantages manufacturing businesses There are theoretically many opinions about and understanding of Chapter2: Current development of building materials production business under Ministry of Construction competitive advantages, sustainable competitive advantages as well as the Chapter 3: Research Methodology sources of these advantages Although there are many theories to explain the Chapter 4: Analyze and Identify competitive advantages of building creation of these competitive advantages but these theories can be divided into materials production business under Ministry of Construction Chapter 5: Solutions to enhance competitive advantages of building materials production business under Ministry of Construction Conclusion two main streams: (a) theories explaining the creation of competitive advantages from outside company, including: national competitiveness, industrial competitiveness; (b) Theories explaining the creation of competitive advantages from within company, including: value chain, company’s resources Miller & Shamsie’s research (1996) used the resource theory to analyze the role of company’s resources on performance Other research in Vietnam (Nguyễn Vĩnh Thanh, 2005; Nguyễn Đình Thọ, 2008; Zhan and colleagues, 2009; Bùi Xuân Phong, 2006; Phạm Quang Trung, 2008; Vũ Trọng Lâm, 2006; Nguyễn Kế Tuấn, 2011) also evaluate the competitive advantages and the source of these advantages in companies 1.2 Literature review 1.2.1 Basic concept 1.2.1.1 Competition Competition is the fighting among differrent economic entity (among nations, companies) based upon the effective employment all economic resources, advanced production technology, provision of excelent services in order to satisfy customer’s needs by providing better quality products at resonable price compared to company’s competitors Competition is foundametal principle of market economy Competition has both plus and minus impacts 1.2.1.2 Competitive advantages: After review major theories about competitive advantages, it can be summarized the common points about competitive advantages as follows: Competitive advantages have been assessed by customer’s perception: 1.2.1.6 Competitive Advantages of Manafacturing Company competitive advantages reflect customers or end-user’s general perception about Production is primarily activities in the economic activities of man Production the value of products and services provided by company in comparison with its is the process of making the product for use, or for commercial exchange In the competitors production process, the manufacturing enterprises will have to make the decision to Company’s competitive advantages have to be compared with its answer the following key issues: What to produce? How to produce? To whom to competitors: Normally, these competitors are businesses operating in the same produce?How much does it cost to produce and how to optimize the use and industry and in the same market exploitation of the resources needed to a product? 1.2.1.3 Sustained Competitive Advantages 1.2.2 Sustained Competitive Advantages had been mentioned long time ago by Ccompetitive advantages of a nation Theories related to company’s competitive advantages many researchers Alderson (1965), Hamel & Prahalad (1989), Dickson (1992), According to this theory, the competitive advantage of enterprises affected Hall (1980) & Henderson (1983) are the authors discussed very early about by the basic characteristics of the country The following features will create a sustained competitive advantages Day (1984) is the first author mentioned about favorable environment or difficult for domestic enterprises in the process of strategies to help company sustain its competitive advantages In reality, Porter competing with foreign businesses: (a) the conditions of domestic production (1985) mentioned officially the concept “sustained competitive advantages” factors; (b) demand conditions in the country; (c) support and related industries when discussing different basic strategies that can be applied by companies (low and in the country; and (d) the strategy, structure and competitors of the cost or differentiation strategy) to have sustained competitive advantages Later company In addition, two external factors, including the impact on the business on, this concept have been further discussed by Barney (1991) and Collins & of government policy and the influence of opportunities also play an important Montgomery (1995) role in creating the attractiveness of the business environment in the country 1.2.1.4 Generic Competitive Advantages: Lê Thế Giới and others (2007), generic competitive advantages come from (Porter, 1990) Theory of Five Competitive Forces in an Industry four components: superior efficiency, superior quality, superior innovation, and This theory was proposed by Porter (1980) to analyze the competitive forces superior customer responsiveness These four components are considered as that determine competitive advantages and profitability of each industry This generic because any company and business can build regardless which industry theory assumes the competitive forces in the industry, including: (1) the current and what kind of services it provides These four components are strongly competitors of the business, (2) potential new entrants, (3) substitute products, (4) interrelated the power of suppliers, and (5) the power of buyers will impact profitability and 1.2.1.5 General Company’s Strategy According to Porter, companies that are successful in pursuing and applying competitive advantage of firms in the industry Theory of Value Chain differrent strategies normarlly have to form different business units and each of these Porter (1985) argues that competitive advantage is formed from the internal business unit follows one strategy By seperating strategies for each business unit in activities and processes of enterprises It should be noted that competitive terms of policies or even culture, companies can minimize the risk of being slow advantage does not come from a separated activity but depends on and is the down development result of the interaction, coordination of activities in the value chain 7 The value chain is considered as a useful tool in finding out the source of components: customer orientation (a focus target-buyer), competitor orientation competitive advantage However, many researchers, which is typical Barney consisting of existing competitors and potential competitors, interfuntional (2002) argues that the use of the value chain is difficult to detect special coordination among differrent Boris and CTG (2010) added the concept of internal resources, intangible nature, but has an important role in creating competitive market orientation based on the views of Joseph (1996) and Berry and Parasuraman advantage of the business: the knowledge-based resources, the special skills of (1991) The internal market orientation is thus specified by employee orientation and the staff to develop new products, the ability to establish relationships with competitor orientation on the employee market partners and customers, the suppliers, distributors involved in the operation, etc Learning orientation: Therefore, researchers continue to develop new theory to explain the formation of According to Sinkula (1997), learning orientation consists of three main competitive advantage of enterprises dimensions: Commitment to learning of all idividuals in the company, shared vision Resource Based Theory among members of the business, open-mindedness in operating and running Researchers classified the resources of the business in many different ways business activities in company Barney (1991) classifies resources into human capital resources, physical capital, organizational capital Grant (1991) divided into tangible resources, intangible, 1.3 Related research in the world and in Vietnam Miller and Shamsie (1996) studied how resources could contribute to and people The classification does not reflect the characteristics of the model company’s performance during the less volatile business environment from 1936 to VRIN so this method has little value in explaining the origin form the 1950 and more volatile between 1951 and 1965 competitive advantage of enterprises Miller and Shamsie (1996) based on barriers for competitors to imitate Experimental study of Zhan and co-author (2009) using resources based to forming competitive advantages of joint ventures in Vietnam divided into knowledge-based resources (skills and know-how relating to Nguyen Vinh Thanh (2005) mentioned primarily the role and impact of management capability, technological capability, and capacity Marketing) and tangible resources (company capital) and business activities (including market resources based on ownership of assets (equipment, buildings, factories, land, etc research and target market selection, business’s strategy, research and development .) This classification represents the characteristics of the model VRIN thus it of new products, technology development, management competency) on helps to explain the formation of competitive advantage of enterprises competitive advantage of enterprises These resources may be tangible or intangible and they are owned and Bui Xuan Phong (2006) showed that for that building corporate culture, an employed by company in the formation and implementation of the strategy (Barney intangible resource of the enterprise is one of the solutions to improve the and Hesterley, 2006) Intangible resources can include skills, human capital, competitive advantage of the telecommunications industry information capital and organization capital, reputation and relationships capital All Pham Quang Trung (2009) suggested that the resources that affect the these resources represent resources that business owns Tangible resources are the competitiveness of business including: capital and financial ability, quality of human number of employees, the size of the total capital of the enterprise Intangible resources and technology development, brand and marketing activities resources as learning orientation, market orientation of the enterprise Vu Trong Lam (2006) has summaried the theories that can be employed to Market orientation: evaluate competitiveness of enterprises and analyze the current state of Naver and Slater (1990) suggest that market orientation consists of three competitiveness of enterprises 9 10 Economics: in 2011, Vietnam’s economy has shown some initial signs of CHAPTER 2: CURRENT DEVELOPMENT OF BUILDING overcoming the global economic crisis and recovering economic growth MATERIALS PRODUCTION COMPANIES UNDER MINISTRY OF However, the minor busty demand and expansionary monetary policy, an CONSTRUCTION increase in inflation cause macroeconomic becomes a major risk for the economy of Vietnam This chapter includes the four main parts as follows: Socio-cultrural: Viet Nam is developing country with a GDP annual growth 2.1 Introduction of building materials industry rate reaches a high level, average per-capita income increases continuously in Currently, building material manufacturers in Viet Nam has been early accessed to global up-to-date science and technology for development of production, quickly switching from small producer to large producer, from backward technology to modern technology The potential of mineral resources, market, technology, labor will be exploited for the development of construction materials into strong economic sector, which meet the quantity, quality and type of exportation and domestic needs In addititon, building materials production and trading companies come from major cities such as Ha Noi, Ho Chi Minh City, Da Nang, Therefore, the need to diferrenr sectors, including state-owned, private equity, joint ventures and forein, Technological development, (3) Human resources in companies, (4) Management 100% foreign owned companies Among those companies, 43 enterprises belong to capacity of firms, (5) Market research and target market selection, (6) Product the Ministry of Construction (Appendix 3), with nearly 25,000 officers and staffs It strategy, (7) Distribution strategy, (8) Research and new product development also comprises relative companies which exploit raw material as inputs for these cost and investment use building materials with good quality has been increased This is a new trend Technology: the speed of scientific and technical progress too quickly, science discoveries made improved product more continuously appeared New modern technologies are altering the traditional technology, enable fully replace the traditional goods 2.2.2 Industry environment Industry environment include the following issues: (1) Capital firms, (2) companies Besides, the Building Material Corporation and the Ceramics 2.2.3 Opportunities and challenges Cooperation, namely, Viglacera, also have its own business units that operate in real Vietnam’s Building materials industry has impressive rate of development estate, construction and installation business with the aim of expanding their and achievement: quality, category products meet the domestic demand; product markets quality are comparable to many countries in region, capable of competing with 2.2 The business environment of companies producing construction materials 2.2.1 General Environment Political: the political and state legal framework has a direct impact to the overall business and production of building materials in particular In recent years, Viet Nam always secures its position, encourage active participation of private sector, intergrate more into the international economy, strong reform administrative procedures , remove obstacles of bussiness, improve the foreign investment environment imported products; products have been exported to over 100 countries around the world; contributed about 9-10% GDP throughout all industries; is the major contribution to the state budget; Encourage the development of other industries; create more jobs [10] One of the goals according to the master plan development of construction materials in Vietnam toward 2020 was approved by the Prime minister in decision No.121/2008/QD-TTG August 29,2008 is “ continuously investing in development of basic building materials such as cement, paving material, sanitary 11 12 ware, building glass, building materials, roofing materials’ ( page 2) and “ construction materials also benefit from that growth, their performance is constantly training to improve management capacity” (page 1) “ high competitive excellent However, from 2012, when the real estate market froze, the products in domestic and international market’ This planning also identifies that performance of these companies producing construction materials was less Ministry of Construction has function of state management of building material efficient, the proportion of equity in total assets decreased markedly and owner’s representative of the state equity in state owned building materials construction production companies 2.3 The current development of buidling materials production companies under the Ministry of Construction In four areas of research, the manufacturing sector of brick and clay products is strength of the manufacturing enterprises of building materials This also confirms an objective fact, that the field of glass, sanitary ware, ceramic tiles are under huge competition from a lot of businesses, from imported products In the manufacturing industry of building materials in Vietnam currently, Net profits of most businesses are not stable and tends to decline in recent there are main manufacturing industries: cement, ceramic tiles, sanitary ware, years As we can see, the value of goods inventory is close to the value of equity construction glass, brick and clay products Although the cement industry is a These firms currently operate only moderate scale with the aim of keep the major industry, it is homogeneous product and primarily dependent on companies survived And this issue reaffirms the urgency of improving the technology Therefore, this thesis just focuses on the remaining four sectors competitive advantage of firms Besides the difference in product quality, many factors such as: categories, materials, and material innovation, also affect these four sectors The research mainly focuses on the following sectors (1) Glass building, (2) Sanitary ware, (3) Granite and Ceramic Tiles, (4) Bricks and clay products 2.4 The financial situation of construction materials production companies under the Ministry of Construction Financial resources play an important role in tangible resources of companies because it reflects the internal resources of an enterprise, the total assets of the business, Therefore, the author analyzed a number of key financial indicators of enterprises producing construction materials under the Ministry of Construction The number of enterprises producing construction materials of the Ministry of Construction is not small Furthermore, collecting financial data of these firms so difficult, therefore in this section, the authors evaluated only the financial situation of business units belonging the Ceramic and Glass Corporation Viglacera Equity of building material businesses are at an average compared with the state-owned enterprises The authors found that, in the period 2009-2011, when the real estate market there are tremendous growth, these companies producing 13 14 CHAPTER 3: RESEARCH METHODLOGY technological development, (8) Business Performance Variables are presented below based on literature, the previous studies and revision of each variable through qualitative research steps 3.1 Research model The competitive advantages will be based on the research and opinions of Multi-item scale has been used to measure key concepts These multi item Koufteros and co-author (1995), Li and co-authors (2006), Thatte (2007) The firm’s scales have been proved to be consistent with the standards of value and resources will be classified according to the views of Miller and Shamsie (1996) reliability by previous studies Figure 3.1: Model of resources and competitive advantage of firms 3.4 Questionnaire design The questionnaire include: Tangible Resources: - Number of employees - Equity Introduction Information: This section includes an introduction about the Competitive Advantages Companies Performance Intangible Resources: - Learning Orientation - Market Orientation content and purpose of research Author gives brief guide to answer the questions on the table and contact information if the interviewee has any questions Information reflecting respondent’s opinions: In this section, the author poses questions to have comments of the respondents by ging the number for each statement The statement was designed to measure the scale has been used in previuos studies The measures consists of observations of many variables (1) The competitive advantages of the company, (2) learning orientation, (3) market orientation, (4) the business performance of the company Market volatility Competition level Technology Development Additional information: In order to collect additional content related to the research model This additional information includes the scales (5) The information about the business environment, (6) General information about the company, (7) Information on the respondents in case they want to know the finding of this research 3.2 Study Steps To achieve the research objectives, three steps has been taken: (1) A preliminary study, (2) Qualitative Research, (3) Qualitative Research 3.3 The study concept and measures In this section the author present the concept and measures of the independent and the dependent variables in the research model These are: (1) The firm’s competitive advantages; (2) The number of employees in the company, (3) Total Equity, (3) Learning Orientation; (4) Market Orientation; (5) The level of market volatility, (6) Competition levels (7) The level of 3.5 Sample Design and Selection Sample in this study was carried out by non-probability sampling Under this method, the authors have focused on the companies producing construction materials under the Ministry of Construction These companies are state-owned enterprises or state capital more than 51% of the total equity in four areas: building glass, sanitary ware, bricks, tiles and clay products Businesses operating in regions across the country The author sent the questionaires to 43 companies In each company, the respendents will be selected in order are: board members, managers and executives, head of each divisions The typical divisions in these 15 16 companies are: Sales, accounting, planning, personnel, and mechanical and CHAPTER 4: ANALYSE AND INDENTIFY COMPETITIVE electrical engineering, production Total questionaires had been sent out is 900 The number of questionaires returned is 236, representing 26.2% of total ADVANTAGES OF CONSTRUTION MATERIAL ENTERPRISES UNDER MINISTRY OF CONSTRUCTION respondents It can be said that this sample reflects and represents all building After collecting all questionnaires, author analyzed information, filtered materials production companies under the Ministry of Construction questions and encoded the information from the questionnaires Data were analysed 3.6 Respondent discription Table 3.2: Distribution of respondents according to group positions Position 4.1 Assessing the reliability of variables Percentage Chairman of Board of Management using SPSS software version 20 To check the reliability of data, Cronbach's Alpha model was applied Director 4,5 Cronbach's Alpha model is used to remove the mismatch variables and to limit noise Vice Directors 13,6 of variables in research process and evaluate the reliability of these variables Head of Divisions 36,4 Cronbach's Alpha ranges from to In theory, the higher the Cronbach's alpha, the Deputy Head of Divisions 41,5 more reliability the variables are These variables which have correlation 100,0 coefficients less than 0.3 will be disqualified These variables which have Total (Source: Survey on model of resources influencing to competitive advantages, author) Cronbach's alpha correlation coefficient from 0.6 can be used Typically, Cronbach’s alpha is from 0.7 to 0.8 in this research 4.2 Descriptive statistics of the variables Table 3.3: Grouping by field surveys of business Trước phân tích mơ hình hồi quy, tác giả thống kê biến sau: Before conducting regression analysis, descriptive statistics of the variables Fields of business Percentages Construction Glass 23,6 Sanitary Ware 24,4 Granite and Ceramic Tiles 26,8 Bricks and Clay Products 25,2 Total have been discribed as follows: Table 4.2: Variables using for regression analysis Numbe r of observ ation 100,0 (Source: Survey on model of resources influencing to competitive advantages, author) Competitive advantage Number of employees Equity Learning orientation Market orientation Market Volatility Competition Technology improvement Mean 236 236 236 236 236 236 236 236 3,61 4,25 3,78 3,66 3,57 3,78 3,64 3,63 Standa rd deviati on 0,59 1,41 1,48 0,75 0,83 0,15 0,25 0,30 (Source: Author’s interview and analysis) Variance Variatio n range 0,35 1,98 2,18 0,56 0,70 0,02 0,06 0,09 2,42 5,00 5,00 3,00 3,04 1,40 1,33 1,50 Min 2,29 1,00 1,00 1,82 1,86 2,40 2,67 2,75 Max 4,71 6,00 6,00 4,82 4,90 3,80 4,00 4,25 17 4.3 Analysis the correlation between competitive advantage and resources Performing correlation analysis based on the assumption H0i: "variable i and 18 4.5 Analysis of Competitive Advantage, Learning Orientation, Market Orientation 4.5.1 Analysis of Competitive Advantage original variable not have a linear relationship, i.e., the correlation coefficient is Table 4.6: Components of Competitive Advantages 0" In this hypothesis, the level of significance is chosen as 0.01 (i.e the probability Mean of accepting the wrong hypothesis is 1%) When reliability coefficient is larger than 0.01, we will accept H0i hypothesis, i.e the two variables are considered no correlation When reliability coefficient is less than 0.01, we will reject the null hypothesis H0i, or that the two variables are correlated After analyzing the data through SPSS, we come to the conclusion that competitive advantage is influenced by learning orientation and market orientation, and not be affected by the number of employees and total capital size 4.4 Regression analysis Price/ Cost Quality Delivery as Customer’s requirement Product Innovation Time to deliver products to market Competitive Advantages (Source: Author’s interview and analysis) 4.5.2 Learning Orientation To assess the impact of these factors on competitive advantage, the authors Table 4.7: Components of Learning Orientation used multivariate regression models Multivariate regression model is proposed as follows: Y = f (x) = β0 + + β2X2 β1X1 βnXn + + + ε In the model: Y is a competitive advantage X1, X2, , X7 elements respectively number of employees, size of the total capital, learning orientation, market orientation, the level of market volatility, level of competition, level of development technology β1, β2, , β7 coefficient respectively of the corresponding 3,29 3,71 3,90 3,63 3,48 3,60 Standard Deviation 0,69 0,76 0,78 0,75 0,65 0,59 Commitment to learning 3,90 Standard Deviation 0,97 Vision sharing 3,59 0,80 Open mindedness 3,44 0,77 Learning Orientation 3,66 0,75 Mean (Source: Author’s interview and analysis) elements Hypothesis test using SPSS software to assess the suitability of a multivariate regression model to test the suitability of the model, the authors concluded 4.5.3 Market Orientation Table 4.8: Components of Market Orientation respectively: Mean - Three environmental factors not affect competitive advantage - Two tangible resources does not affect competitive advantage - Two intangible resources affect competitive advantage Customer Orientation Competitor Orientation Inter-functional Cooperation Orientation Employee Orientation Employee Competition Orientation Market Orientation (Source: Author’s interview and analysis) 3,61 3,46 3,63 3,74 3,39 3,57 Standard Deviation 0,76 1,00 0,95 1,01 0,98 0,83 19 Analysis of model that Competitive Advantage depends on Learning Orientation and Market Orientation SPSS software was employeed to analysis the model and the results are 20 CHAPTER 5: IMPROVING THE COMPETITIVE ADVANTAGE OF BUILDING MATERIALS PRODUCTION COMPANY UNDER MINISTRY OF CONSTRUCTION discribed as follows: Competitive Advantages = 1,007 + 0,363 x Learning Orientation + 0,356 x Market Orientation 5.1 Orientations for socio-economic development of Vietnam to 2020 The strategy of social and economic development (2011 - 2020) has set a target Competitive Advantages = 1,162 + 0,668 x Learning Orientation of "Vietnam basically become a modern industrialized by 2020" On the basis of Competitive Advantages = 1,433 + 0,609 x Market Orientation analyzing weakness and current difficulties, the causes have been found out are lack Competitive Advantages = 1,176 + 0,264 x Commitment to Learning + 0,129 x of high quality human resources, lack of infrastructure systems (synchronous and Vision Sharing + 0,273 x Open mindedness modern), and lack of business modern business that it is the enterprenership spirit Competitive Advantages = 1,004 + 0,505 x Customer Orientation - 0,257 x As he Konosuke Matsushita (1894 - 1969), founder of Matsushita, one of 20 Competitor Orientation + 0,007 x Interfuntional Cooperation Orientation + 0,3 x talented entrepreneurs, the most prominent twentieth-century Japan - wrote: "the Employee Orientation + 0,155 x Employee Competition Orientation success or failure are now man" The centerpiece of the development is due to the Business Performance = 1,368 + 0,414 x Competitive Advantages talent recruited suitable or not 5.2 The development orientations of building materials industry The target in 2020 of the industry of building materials is to strive to basically complete the process of industrialization and modernized toward 2030 and aims to reach the level of the modern industry, green industry that are equivalent with the level of other countries in the region and the world Prime Minister Nguyen Tan Dung has signed Decision No 121/2008 / QDTTG, approved the master plan on development of building materials Vietnam toward 2020, which continues to invest in developing basic materials such as cement; paving materials, sanitary ware; building glass; building materials, roofing; stone, sand and building decoration materials; and focus on developing new materials, environment friendly 5.3 The challenges and goals to be reached 5.3.1 The challenges In the trend of globalization today, goods have been imported and exported to other parts of the world; markets are widen, covering the whole world Therefore, any business that has enough resources and wants to grow, would also like to expand their markets abroad The construction materials production company under 21 the Ministry of Construction have been facing many challenges to reach out to foreign markets Firms in the industry have difficulties with accessing to quality labor: skills 22 Thirdly, it is the shared vision The senior leaders need to be aware that they'll need to communicate, disseminate company’s strategy, vision so their employees can fully understand company’s strategy, vision and development shortage becomes more difficult in the future due to limited capacity of the sector orientation attractive for young people and the quality of education in Vietnam 5.4.3 Enhancing market orientation of the businesses The first dimension is staff competition orientation Businesses need to develop solutions that help to improve the working conditions of employees in order to retain employees, help employees having long term commitment with long-term and attractive contracts The second dimension is competitor orientation In the business department, the sales department is mostly assessing to the markets Therefore, companies need to encourage this department to find out and update information about the competition, or the actions of competitors The third dimension is customer orientation Companies need to improve the assessment and control of commitment level in serving customer needs, frequently measures customer satisfaction; appreciate and pay attention to aftersales services The fourth dimension is multi-functional cooperation Companies need to frequently and further enhance the sharing of resources among different functions within the enterprise; comfortable exchange of information on successful experiences as well as failures with customers among all departments The fifth dimension is staff orientation Human resources are the one that directly create products Businesses need to systematically analyze the working conditions of officers and employees of the company In the context of the global economic crisis in recent years, or even in Vietnam, inflation, interest rates fluctuate erratically, companies are facing difficulties in accessing finance resources 5.3.2 The goal to be reached, On behalf of the government in managing the industry, the general direction of the Ministry of Construction is to improve the competitiveness of companies producing construction materials in Vietnam The Ministry of Construction has taken the specific goals to be reached: The first objective is the growing depth and synchronization The second objective is sustainable growth The third objective is smart growth 5.4 Solutions to enhance competitive advantage in companies producing construction materials under the Ministry of Construction 5.4.1 Improve factors enhancing the competitive advantage of companies These activities directly enhance the competitive advantage of companies producing construction materials is very important The solutions include: First, companies need to reduce production costs, offering competitive price equal to or lower than the competitors Second, companies need to invest more on research and development as well as market research 5.4.2 Improving the learning orientation of business Firstly, it is enhancing open mindedness Businesses need to regularly gather critical opinions about how to interpret the information about customers Secondly, it is enhancing commitment to learning The fundamental values of the company include considering learning as key to improvement, people need to understand that spending money on individual learning is an investment, and is not extra expenses 5.5 Solutions to improve the competitive advantage of companies in different sectors 5.5.1 Construction Glass First, improve the safety of the product Second, improve the bearing capacity and heat Third, improve the impact strength of the horizontal wind load increases with building height Fourth, to create the most favorable conditions for the promotion of export trade of glass products 23 24 Fifth, use of modern technology with low fuel consumption Friday, import taxes and establish technical barriers for processed glass products that can be produced domestically CONCLUSION 5.5.2 Sanitary ware First, improve product quality Second, in parallel with the main products also need to develop the suplement product comes with accessories, sanitary ware Third, branding, promotional and communication programmes Fourth, the implementation of regulations on competition management, market management 5.5.3 Granite and Ceramic Tiles First, review and develop individual product lines available into the high-end, high value and high margin products, besides develop the product lines that are cheap, satisfies mid-income customers Second, the investment should be concentrated in clusters area, large capacity, high production specialization Third, improve the capacity and eventually eliminate the production line of tiles with low production capability Fourth, investing modern technology, highly automated production lines Fifth, ensure technology needs to produce a variety of products with different sizes 5.5.4 Bricks and Clay Products First, continue to invest in depth in technological improvements of bricks and clay production to reduce fuel wood consumption, improve product quality Second, the development of large-sized tiles, high porosity of 50% or more Third, the development of production of high quality bricks have economic value, especially not warrant the kind of brick building to serve both domestic and export Fourth, the development of production of bricks made by less efficient land and in agricultural and industrial waste (land cover in coal mining, coal narrow stone, ) Thursday, the Ministry of Finance to propose research proposal regarding tax policy on brick and clay production accordingly to gradually reduce the exploitation of the land for brick and clay production With important contributions in theory, the authors propose to apply step by step the solutions to enhance competitive advantages of enterprises producing construction materials under the Ministry of Construction In addition, this thesis also raised some directions for further research to explore, make new discoveries that can be applied to companies producing construction materials under the Ministry of Construction in particular and the business Vietnam industry in general Support for businesses of Vietnam to develop and improve gradually to be able to compete with companies around the world However, this thesis just focuses on the impact of two intangible resources as learning orientation and market orientation to the competitive advantages of building material companies under the Ministry of Construction Therefore, this research is still got some limitations and it needs further research and additional works The additional research could be to study the impact between technological capabilities and competitive advantages; expand the scope of research in the field of cement production in Vietnam, expand the research into companies producing construction materials outside the Ministry of Construction A new research direction would be the impact of the intangible resources as learning orientation and market orientation on companies’ competitive advantages in other industries In addition, the role of the two audit resources for competitive advantage in the business of manufacturing various sectors of the economy is also a direction for further research All suggestions are aimed at enhancing the sustainable competitive advantage of manufacturing firms in Vietnam through two intangible resources as market orientation and learning orientation  ... representative of the state equity in state owned building materials construction production companies 2.3 The current development of buidling materials production companies under the Ministry of Construction. .. materials under the Ministry of Construction The number of enterprises producing construction materials of the Ministry of Construction is not small Furthermore, collecting financial data of these... divided into materials production business under Ministry of Construction Chapter 5: Solutions to enhance competitive advantages of building materials production business under Ministry of Construction