Building the business strategy for logistics service in Vietnam Ocean Shipping Joint Stock Company - VOSCO period of 2014-2018

GRIGG) GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION CAPSTONE PROJECT PROGRAM REPORT Subject: BUILDING THE LOGISTICS BUSINESS STRATEGY SERVICE SHIPPING VOSCO IN VIETNAM JOINT STOCK FOR OCEAN COMPANY — PERIOD OF 2014 - 2018 Group Class : GaMBA.C0112 Doan Thi Hang Vu Minh Hien Tran Quyet Thang Dang Thi Dieu Lien | Ho Chi Minh City , 2013 “————————=————ễễễỄễễỄễ ee Capstone Project Report — Ga.MBAOL.CO112 — Group 02 ACKNOWLEDGEMENT Firstly, we would teachers of GRIGGS Career Development like to express our sincere thanks to the Professors The University, (ETC) The - Center for Vietnam Educational National Technology University and who have enthusiastically instructed us during the MBA course and our research Especially Ocean thanks to the Board Shipping assignment Joint Stock of Management Company for help and all the staffs in Vietnam during our accomplishing this The intimate, candid exchanges and seminars in your company help us to have a realistic look and analytical data in accomplishing this topic “Building the business strategy for logistics service in Vietnam Ocean Shipping Joint Stock Company, period of 2014 - 2018” Group 02 — C0112 included 04 members who come from Interni Forwarding Company, Vietcombank, Saigon New Port and Vosco decided to research the topic: “Building the business strategy for Logistics service Shipping Joint Stock Company, period of 2014 — 2018” in Vietnam Ocean as the respectful gift to express our sincere thanks to all the Professors, all the Teachers of Griggs Andrew University who provided us the valuable skills and knowledge during the course of Master of Business Administration Ho Chi Minh City, Sep 2013 Group 02 — C0112 Pave| er Global Advanced Maste [ ness Administratian Capstone Project Report — Ga.MBAOI.CO112 — Group 02 INDEX C Gnieni Page Acknowledgement: I Indexs Co Fee Categories symbols and abbreviations Model table ”, — T1 VỊ "TT 0NU U HE II elite t ttt Vill - a.iiII_a.aa IX CHAPTER | >THE THEORY OF BUILDING THE BUSINESS STRATEGY FOR LOGISTICS SERVICE 22 2222222222202 | || The concept of business strategy 2222222220202 na | [II The defnition 22222222022 nu l [I2 The kinds oFbusiness strat€Ðl©S: 2.2222 2222222nrc l 1.1.2.1 Enterprise SrateBV - 2n nhe 22222 | [122 Business Strat€gy: .2222222220 | 1.1.2.3 Functional stratEBy: 2222 nu 222 1.1.2.4 Global Strategy ooo ce ceetetevevsveveeveveveieesssveveeeevevevevenses 1.1.3 The strategy`s basie rules TH 1.14 The roles of business strategy |.2_ na Planning the business StrateBy- 20222 2222222 ‡ |.2.1 The external environment analysis : 222 [2311 PEST Model analysis 222222222222 1.2.1.2 M Porter forces model: analysis the factors in the business environment effected to the enterprise's business |3” 1.3 cic Analyzing the external environment icccceecececececete cette The tools of building and implementing the business strategies Page CF Global Advanced ‘aster of § es , Adimuinistratio Capstone Project Report — Ga.MBAOL.CO112 3.10 ERE matrix 12 TPR mau — Group 02 iD 1) 3.3 Competitors Profile Matrix 34° SWOT Matnx 35 QSPM 22c I ee matrix TỪ MA" ad CHAPTER -VOSCOS SITUATION ANALYSIS i) 21 Vietnam Ocean Shipping Joint Stock Company `s general view 15 211 Thehistory: "` 15 2.12 The currentS€TVICS- 2222222222 22022222 se l6 2.13 The company’s business situation 2.14 Current Situations of Logisties BusinesS 222cc na 16 2222222 17 2.].5 _ Customer, logisties service and branch: 18 2.1.6 — Result of operation activities: ooo 22222 za 20 2.1.6.1 Revenue Target2.0 2.1.6.2 Expense targ€( 2.220 no 21 2.1.6.3 Revenue target 23 2.2 2222 yc Zl 222022 no Analyzing the external factors : 2.22222222220222 ao 23 2.2.1 The macro environment factors - PEST MODEL: 22 222222 2s 23 2.2.1.1 Ecomomic FactOrS .22 2222222 Z.2.12 Social and Culture Fa€tOFS .22 2222222222 27 2.2.1.3 Scientific, technical and technology environment factors 27 Z3.2_ Competitive Factors Analysis (Š ForcesM Porter): 28 2.2.2.1 Threats of new entrants 2.2.2.2 Bargaining power of buyers 2.2.2.3 Bargaining from the supphters 22.24 Threats of substitute products (normal) 2.2.2.5 Competitive Rivalry 25 (highest) ooo 28 cece cece eee 29 ec 29 eee BO Be Page 1H } Global Advanced Master of Business Administrations Capstone Project Report — Ga.MBAOL.CO112 — Group 02 23 Internal Enterprise analysis cóc - ~.3.1,1 Tiuman 232 Marketing abilities +33 Technology Abilities 234) Financial Capability 2341 The situati of production on and business activities 2342 Analysi of balance sheet s Recourses ton xe MT ¬—— cà "“ '-caiiẳaẳẳỖÀỤỘ Ow TH n2 4l 4] (00000000000 cc c ccecece cece tee ee 4] 43 CHAPTER >CHOOSING AND BUILDING THE BUSINESS STRATEGY OF LOGISTICS SERVICES FOR ENTERPRISE IN PERIOD OF (2014-2018) 55 3] Enterprise`s MISSION 22222 3ˆ 55 an viv ietet vette 56 3.2.1 The solution of Business strategy with SWOT matrix : 56 3.2.2 Choosing the optimum strategy base on the QSPM matriX S.22 2n 3.2.2.1 Financial SolutiONS - 202022222 2.2222222xe 62 3.2.2.2 Restructure solution : 2.2222 2222222 nnrse 3.2.2.3 Technology & procedure solutIONS 2222222222222 3.2.2.4 Technology & procedure solutlOfS .2.222222 222222 uờc 66 3.2.2.5 Marketing solution TH 3.2.2.6 nh k1 n2 1n ng sài 69 Traffic Solution 222222222200 Global Advanced Master ot Business Administration 64 ng 65 e 71 89 /0563095 15 A4 ă (CGS 60 73 Page Iv Capstone Project Report — Ga.MBAOL.CO112 CATEGORIES SYMBOLS — Group 02 AND ABBREVIATIONS AS - Attractiveness Scores APEC - Asia Pacific Economic Cooperation CSCMP - Council of Supply Chain Management Professional ISM CODE : International Safety Management Code LSP - Logistics Service Provider SCM : Supply Chain Management SQEMS - Safety Quality and Environmental Management System TAS - Total Attractiveness Scores VOSCO - Vietnam Ocean Shipping Joint Stock Company VIFFAS - Vietnam Freight Forwarders Association VITRANSS2: WTO Vietnam Transportation Sustanable Development Project : World Trade Orgnization Page v CS Global Advanced ‘liste: | ess Ad strat Capstone Project Report — Ga.MBAOI.COT112 - Group 02 CHART, Model! !) Overall business [able 1.1 Table TABLE strategy model SWOT matfIN 1.2 QSPM 222 13 form Model 2.1 > Company 14 organization chart nu 15 Model 22 - Vosco's logistles operatlon model l6 Table 2.1: Summary of operation results trom 2010 to 2012 17 Table 2.2 - Domestie logIistles account HSL nu 18 Table 2.3 - The market share of domestic container transportation 19 Table 2.4 : Data of logistics service in the domestic business 20 Table 2.5 : The proportion of operating costs on net revenue- 21 Table 26: CPM mafrIN 2.2222222222222222222 vee eeeee 33 Table 27: The survey of EFE resultS 22222222 34 222222222 Table 2.8 - The result of evaluation oŸ EFE su 222220222 Table 2.9: 36 EFE matrix 2.222222 2n nu202202 36 Table 2.10 : VOSCO’s human resources statistic 38 Table 2.11: The machines list 39 Table 2.12 : The warehouse facilities HSE 2222 222222 2222 vette 39 Table 2.13 : The years of ship ÍiSt 2222222220222 re 4I Table 2.14 : Report of Cash FlOW 222222022220 4] Table 2.15 : Consolidated Balance Sheet 43 Table 2.16: Financial mndicator GrOUp: 2222222 222 45 Table 2.17 : The survey of Internal Factors 50 Table 2.18: Internal factor surVey r€SUÏL 222222 na 52 Table 2.19: the matrix ofFevaluation öFIEE 22222222 D2 Table 220 SWOT analysis 53 Table 3.1.) SWOT 222222222222 matrix of combination Table 3.2) Choosing the strategy as QSPM Tabble 3.3) The planning of revenue Table 3.4 The planning of cost 56 matrix ee 60 63 63 Pave VI (e Global Advanced Capstone Project Report ~ Ga.MBAOL.CO112 — Group 02 CHART Chart 2.1) The domestic container transportation’s market share Chart 2.2 > Revenue of logistics Services 19 222222220 eee 2l Chart 2.3 Comparison of depreciation cost and administration cost 22 Chart 2.4 - Prolfit afer tax of Logistiles Serviees business 23 Chart 25: Enterprise Asset SIUALION S222 ee Chart 6: CapHal reSOUTCC \ Global Advanced ‘'as‘e) of © ieee ciness Administration 47 48 Page vil Capstone Project Report — Ga.MBAO01.CO112 — Group 02 INTRODUCTION i, the introduction Shipping transportation is one of the important links in the logistics supply chain Since 2014 as the commitment joining WTO the foreign enterprises have the right to invest so the Vietnamese enterprises will 100% foreign capital in Vietnam be facing the fierce competition There are about logistics 900 logistics companies with different scales in Vietnam now, in which 70 to 80% are small and medium scales According to Mr Nguyen Cam Tu — Deputy Minister of Industry and Trade said ~ the potential of — logistics development is even greater as our trading turnover considered as the country’s fastest growth rate in the region with speed of 18 to 20 % per year and turnover nearly reached usd130 billion However the same with the other developing countries in the region, the logistics business in Viet Nam are mainly small and medium enterprises, so the business structure is tragmented, non-professional and limited human recourse Mr Bui Vietnam Ngoc Hoan (VIFFAS) transported by sea transported goods was — said: services TEUs) in Vietnam Chairman "4bout However, 90% the of Freight of export Forwarders import goods in Vietnam fleet covered about Association Vietnam 18-20% are of the The total volume of export import cargo in Vietnam in 2007 181.12 million tons, (4,489,165 The in which Multimodal shipping containerized cargo was 49.29 million tons Transportation is an important factor of logistics plays a very important role in the strategy of developing the logistics services in Vietnam” Theretore, the logistics services sector has played a very important role in Vietnamese economic development in general and maritime industry in particular With the hope development, Advanced of contributing our by the knowledge efforts gained from to our country’s logistics service the lesions in the program Global Master of Business Administration CO112 the exchange experiences learned from the partners in Asian (Japan China Singapore ) and EU (Holland Germany CZ Belgium ) as well as in the daily Global Advanced ter of f é \d crrat works our group members come Page vill Capstone Project Report — Ga.MBAOI.CO112 — Group 02 from Saigon decided New Port, to research Vietcombank the topic Interni "Building the Logistics Company business strategy for logistics Deputy Director of Vietnam has actually and Vosco service in Vosco JSC, period 2014 — 2018” According to Dr fransportation Nguyen Strategic entered the WTO, Van Chuong Development — The Institute's said) “Vietnam as the other manufacturing business sectors the transport sector in general and the marine transport industry in particular has changed positively to improve their competitiveness, the service quality and efficiency There are some important directions in this process 1s the expansion of logistics services and value added services in the supply chain” The Vietnamese enterprises in general particular have to strengthen services in the supply chain, the period of fierce and and expand Viet Nam Ocean Shipping the logistics services and JSC in value added as well as promote the strategy of logistics business in competition with participating of 100% foreign capital companies in the process of integration WTO In order to building the effective solutions in the field of logistics service in general and in Viet Nam Ocean Shipping JSC — VOSCO in particular, firstly, we would like to introduce the concept of logistics, the concepts of supply chain as well as the roles of the stakeholders in the supply chain The concept of Logistics: In fact, the term “logistics” already had two centuries ago, considered to have originated in the military’s need to supply itself with arms, ammunition and rations as it moved from a base to a forward position So far, this term referred to in English as ‘logistics’ and widely activities, and used in a lot of fields to specify many diverse focus on providing the correct amount of fuel needed, at the right time in the right places As the settlement of the transportation, storage or commercial production and logistics services of different companies in each way or another, so there are a lot of definitions of “logistics ‘as The Council Chain Management Professionals (CSCMP) © -'Logistics management of Supply is a part of Pave IX I Global Advanced † ess Administration ... research the topic: ? ?Building the business strategy for Logistics service Shipping Joint Stock Company, period of 2014 — 2018” in Vietnam Ocean as the respectful gift to express our sincere thanks... strategy for logistics service in Vosco, period of 2014 — 2018 - Scope: Vietnam Ocean Shipping Joint Stock Company The research objective: Logistics industry is a new and young industry in Vietnam, ... CHAPTER EL: THE THEORY STRATEGY I.I OF BUILDING THE — Group 02 BUSINESS FOR LOGISTICS SERVICE The concept of business strategy 1.1.1 The definition "Strategy is a complex series of actions to