Building business strategy for Song Da Thang Long foundation Joint Stock Company to 2016, vision 2020

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G Global Advanced Master of Business Administration Program GRIGGS UNIVERSITY GAMBA X0710 CLASS TOPIC REPORT

BUILDING BUSINESS STRATEGY FOR SONG

DA THANG LONG FOUNDATION JOINT STOCK COMPANY TO 2016, VISION 2020

Group: 11 Members:

1 Nguyen Van Khoi 2 Dao Trung Dung 3 Nguyen Dinh Hung 4 Nguyen Hoa Thuan

Ha Noi, December /2011

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SONG DA THANG LONG FOUNDATION JOINT STOCK COMPANY

Add: BT8/17 Van Khe New urban-La Khe-Ha Dang-Ha Noi

HIN MUNG SONG OA THANE LONG Tel: (+84.4) 66738748 Fax: (+84.4) 33117586

HOP TAC CUNG PHAT TRIEN

Website: www.nenmongsdtl.com.vn — email: nenmongsdtl@fpt.vn

CONFIRMATION

Date: /12/2011

To: - Master of business administration program - Griggs University

- Center ETC - Viet nam national university, Ha Noi

Subject: Comment of Song Da Thang Long foundation joint stock company about topic report of group 11 - Gamba X0710 - Griggs university:

- Song Da Thang Long foundation has done fully support for group 11 - Class X0710 when they practiced and learned in company about operation status, vision and

strategy of company

- Group members have expressed an enthusiastic and creative, have closely followed up current situation of company and receive a good result in wroking time in Song Da Thang Long Foundation

CENGRAING GIAM DOC PHO-TONG GIAM DAC

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Global Advanced Master of Business Administration Program Table of contents DRE TIN DEA cu ceeenndrdtinintosgttrbniitititigeex0664618600080lssereoadestounliieusksik9l8GI018/80/GG70H1000BG00100/0006G0E28 05 CHAPTER 1: RATIONALE

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Biches TPE DH BEE I eeceenenceceenseyeserunovanssnserensinsUaiieiiiei RIG lmemeeneeonnene mena neT sete FEUER ES UST FADES 17

1.3.3 [RABE COM POLLO HNHHÍN gaeeaarrdeaniasiresssssensrerseetrosrntiortoSVGIEISGEURERIISGIEDMGI260440/10005E0584 19 LS, Phecoverall COmpertive Strate 16S ce«esssseeesnsssrdetnririsgokisygi0468061860401008860090120036001E6uersmnvsegersee 20 1.7 Model of analyzing and choosing strategy by the weight method «-«<« 21 Teed « 1x ¡ @#GIHE DHST GHI BE saasssesedrsdorgrorotbGgronltcG0S01A35414S8psirssohgddragogivltoxsisofi6tGEGSSSSHEHSGĐSSSI 21 125.5 PY0d06EiiereriToTT Si BW oaaanaeneneaeeeenoresssosintoruiexuloggY001G010/0 E00003/40905G0109008101801/0168 22 ] ban FOCUSES SUEY suaaaaaidsadrtdtkeeeesssonsrsnnsrgratgbotegysi00fĐSBBIIBSSU3801053)3048000084010/8973:c mrppgmowriee 22 128 SEleriTon ftml SíY4fEBTbE DEN «easesnnsrotsertsotidiaotiggiigisibtotisetdelS4400610000loushsgbsorngpgdgozgg8p2Erni=gnsgsn 25 CHAPTER 2: ANALYSIS ON THE REAL CONDITIONS OF SONG DA THANG LONG FOUNDATION JOINT STOCK COMPANY

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Global Advanced Master of Business Administration

Program

2.1, Generall overview of Song Da Mate Lot GSC conecacrenemnmnnennmroinnnssecupemmmnnnacomscacassmmuace 26 Joly le FORMatOn Gd GEVElOGMIENE PIOCESS seesseessseseessrerseterropiYSSSBL509/0/55061001580400004001606i-0/08kÁ6 26 oe Leake HÌISITESS H6ldlS đi THỂ GV oeeeeednnsdvatrititinbiig150G0006140010300169310801300800G18039agsựougorh0gg790000090E 26 s: Ea II: HA88đ0EfGHT SHHCTUTE seseeannsenindaigtoiottostrlG0iIG0S01360800806632AỀagggtchetssipetiiGiiSBA059/0/909020400/000/:00090 Zi 2 Leh, EININØSS DUÍVORTES( 205 20L anraannaa nai xssessossesssneossusl000060040500001066400180008303016/00//00020080 29 2.2, Vision, mission and objective of the cotipany tò 2Ó TỔ cueeeeeeeeaianinedaoeoidisiiA0L4466448Á6 se 30 Onô:lr 'Ý TẾ HÍÏ tayssgxtrinat066018nseclisgevssdgteroistrasgdrgonhOiecissp9VJSGESSENNISDDIIESGWGHDGGI44098L0G001406llansguge480iiigioisgtczek 30

Beech: PATIO crescent CE AIDEN ASAE RST ESE ie eR CROCE 30

Diz J Strate ne DOPECLIVES WIT 2D Hỗ 8HD 2 Di ca ceeeieiesmennerendiesotdrootgdgygtdtgg0/090200139000)0/0004019108 30 2.3 An analysis of the external environment of Thang Long Foundation Joint Stock Cmipasny (T1 Canada gndsaiderensnsarnnnisoainssrsvvSAG0SEESNGASISRIOISSSSIQEGT4888SL4GG000G001000400800800EL900063bxesrssoae 30 Jets ke Ñ 1566 efftitgffdofif SH VENS keeesnrerdrdraerrrotrrgttttitiio2100165840100136443G5610/0468609uggy400n8001000000040308 30 2s8„u VY HRHSI/SIS di tế gEGfor 8 EIVIYDHTGHÍ seeeeeeeeiieeeiidsseeseokireeaekodldikssuec4SiNGRUESGGHSHHEEGEOSIS 36 2.4 The internal analysis of Thang Long Foundation JSC . - 55s ssesekesreeeeee 43 #-0,1 VGIIE=CIBIN TH NỈ, vàeaseeenieeiadedosaieonseseseseonrskntoreorniet0VOIGSSINMGIS04400900148010000/66010008003858803 43 2.4.2 Competitive advantages of Song Da Thang Long Foundation JSC 50 2.5 SWOT Matrix Analysis of Song Da Thang Long Foundation JSC - «<5 ao 2.6 Selecting a business strategy for Song Da Thang Long Foundation JSC by weighting method 59

CHAPTER 3: RECOMMENDATIONS AND CONCLUSION

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Global Advanced Master of Business Administration

Program

3; lov Subcontracting capital mobilizaties aid PROVIGGES ccc cecssssmesccs cioecsnennena-eenananmniemememummenynnne 67

3.2 Recommendations, limitations and directions for further research . ¿+ <<<<<<+ 67 3:2.1„ RiecomTETH[LIOTfSiiseeernniaioanesttGilibt4G81018 su ngiedissessipsgldicesgd0086800610099801909988008390501000G04610110014000006 67 3x2): 0n o1ffTI (4O S oaseseoeeilxGSGGEGEExssysssaualggsrgigggn9S/S000999-010050450212N0191/129183418008)39038188g99008G099U88181.11./312lorsiliswausst 68 3.2.3 Directions for further researCH - - - - << c c s0 ng HH ng ng 68 SER Gs (| er 68

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Global Advanced Master of Business Administration Program

THE INITIAL

In recent years, in term of business, together with strong development of economy, many enterprises are found and gradually assert their role However, in business activities, especially, in the context of marketing economy, it is essential for businesses to constantly reform, strengthen ability of responding to market Businesses need to clearly determine where they want to go? And how to go? Therefore, they have to well set up and implement business strategies

An adequate business strategy will guarantee enterprise’s existence, long and stainable development, achieving their goals However, business strategy’s creation and implement in many Vietnamese business, in general, and in constructing business, in particular, is limited, moreover, a lot of businesses are lack of knowledge and facility to access the new

Song Da Thang Long Foundation JSC is a young company, hence, the company’s marketing activities have not well been concerned and researched New business strategy has just been creation and carrying out annual business strategy But "medium term plans" and "long term plans" is often sketchy, lack of science, sometimes arbitrary, voluntarism and difficult to meet market’s requirements It has not assessed impacts from inside business to outside business, determined potentials in master relationship to see strong points and weak points of the company, identify opportunities and challenges of market, yet With high pining for applying studied knowledge into practice at the company where one member of our group is working for Yet, the theme “setting up business strategy for Song Da Thang Long Foundation JSC company to 2016, vision 2020” is selected For result of limited time and students, our group just focuses on researching, analyzing and setting up business strategy for the field: “foundation implement and treatment’”- one of the main business activities of the Company

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CHAPTER 1

RATIONALE

1.1 Theory of business strategy to Enterprise 1.1.1 Some definitions of Strategy

“Strategy” is a term derived from the Greek- "Strategos", used in military, Clazevit — a military theorist in modern era said that military strategy is the art of monitoring at advantage position Edward Mead Earle historian described the strategy is "The Art of controlling and using resource of a nation or a coalition of nations to ensure and increase the efficiency of its essential interests”

Since the 60th decade, the twentieth century, the strategy was applied in business and the term "Business Strategy" was born The concept of business strategy has developed over time and human beings have approached it in many different ways There are a lot of such definitions of strategy as: Identifying of objective, long-term fundamental purpose of enterprises and the applying of a chain of actions as well as the allocation of essential resources to implement this goal (Chandler, 1962) The strategy is plan of controlling using organizational resource of human, property, finance to improve and secure its vital interests

TKenneth Andrews was the first person who gave these prominent ideas in the classic book “The Concept of Corporate Strategy” From his point of view, strategy is what an organization must do basing on their strengths and weaknesses in the context of having both opportunities and challenges

1.1.2 The basic features of business strategy

The basic characteristics of business strategy was conceived relatively uniform The characteristic that is:

- Clearly identify the strategic objectives underlying business direction to achieve in each period, and be reflected fully in the areas of administrative activities of the business Orientation of the strategy to ensure business continuity and development firm in the business environment is constantly fluctuating

- Business strategy orientation only outline the activities of enterprises in the long term, the framework of business activities in the future In business practice requires

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combining strategic objectives with economic objectives, consider adjustments to suit the environment and business conditions to ensure business efficiency and overcome differences due to the strategic direction of cause

- Business strategy is built on the basis of competitive advantage cdoanh industry to ensure maximum mobilization and mix well with the exploitation and use of resources, core competence of enterprises in the current and future to promote the advantages, seize the opportunity to gain advantage in competition

- Business strategy is reflected in a constant process of construction, implementation, evaluation, testing, and strategy adjustment

- Business strategy always trends to win in the competition and is formed, implemented based on detecting and taking advantage of business opportunities, comparative advantages of the business to gain high business effect

- All of important strategy decisions in the process of organizing, developing, assessing and regulating strategy have focused on team of senior managers to ensure the accuracy of long-term decisions, the information confidentiality in competition

1.2 The process of developing strategy:

It requires strategic thinking and the answer 3 questions to develop a strategy : "Now where are we? Where do we need to go? And how do we get there? ", through 7 following steps as:

1 Evaluating present: mission, objectives, strategies Analyzing business environment

Analyzing macro environment

2 s,

4 Analyzing inside enterprise

5 Analyzing strengths, weaknesses, opportunities and challenges 6 Analyzing strategic options

7 Evaluating performance

Managing strategy process include: Analyzing outside environment to identify opportunities and challenges, and analyzing inside environment in order to find out strengths and weaknesses to outline the strategies and choose appropriate strategy Managing strategy process described in Figure |-1 below:

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Global Advanced Master of Business Administration Program Figure 1-1: Model of strategy management process Mission, vision

Inside analyzing: { Outside analyzing:

+ Model: Constructing & + Macro Analyzing:

- Value Chain choosing outside environment

- Competitive advantage - strategy + Micro Analyzing: 5

+ Conclusion: (SWOT) competitive forces model - Strengths + Conclusion: - Weaknesses | - Opportunities Strategy options - Challenges -Leading in cost - Varying products - Concentrating - Diversifing products Ỉ

Making structure of Implementing and Monitoring and Organization —> regulating strategy 4 evaluating strategy’s

appropriate to strategy implementation

Source: Documents in Strategy Management lecture - Gamba X0710

Vision: The most important factor of developing and selecting strategy is vision of individual or group involved in strategy planning; this factor depends on intuition of each person orgroup Analysisand intuition is foundation forgiving decisions about forming strategy being suitable with business environment

Mission of business: Each organization has a specific mission or task even when this has not been officially informed Identifying tasks, goals, current business strategy is the first point in governing As business has developed in a changeable business environment, managers will find that they need to determine the initial target

Goals and tasks:

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- Ensuring consensus on purpose within company

- Providing a basis or standard for delivering company’s resources

-Servingas afocal point forindividuals in order that they can identify with Company’s purpose and direction and prevent people who are incapable of joining the market, the operating field of Company

- Favoring for making goals and working structure related to allocating tasks to responsible elements within the company

- Clearly determining purpose of Company and transforming these goals into objectives in a way of cost, time and performing parameters can be assessed and managed 1.3 The model of analyzing external environment

1.3.1 Macro analyzing

It is often used to analyze macro environment - objective environmentof the business In order to analyze and synthesize elements existing outside the enterprise, deciding effect on survival and development of enterprises Enterprise must realize opportunities, challenges which objective environment brings to, business have to not only adapt, but also promote environmental change The elements of the macro environment is expressed through the following model:

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Global Advanced Master of Business Administration Program Figure 1-2: External Environment Demographic

- Analyzing of the demographic environment

Population size: Observing the change of the demographic of population to highlight the importance of this segment

Age structure: To see opportunities of elderly care services, insurance services However , it can hide potential threats of human_resources issue to the business Geographic Distribution: May bring advantages for telecommunication technology

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Political environment is the political factors affecting business of the enterprise Legal environment is a law system related to the enterprise Effect of political and legal environment on business is very extensive, even at significantly decisive

- Analyzing economic environment

Economic environment is the social, economic and economic policy situation of the country where business survive and develop Macroeconomic environment includes socioeconomic structure, economic regimes, macro-economic policy

Analyzing socio-economic structure: socio-economic structure is also known as the structure of the national economy, including such structures as: lines, distribution, exchange, consumption, technology, property so on In which the strategy of developing lines is the most important factor

Therefore, when creating business strategy of the enterprise, it must study development of lines that business enterprises

Analyzing economic policy of the State: Economic policy is target of economic development in a certain period set by the State with the strategy, tactic to achieve that goal Economic policy of a nation consists of business strategy development of the whole nation, price policy, trade policy, wage policy, fiscal policy, fiscal policy and so on

- Analyzing scientific-technical and technology environment

Scientific- technical Environment: is scientific and technical factors and sets of social phenomena which are directly related to scientific and technical factors where dusiness survives and develops

Currently, international science and technique develop very quickly Developed countries are in the era of knowledge economy

Knowledge is constantly innovative; many new techniques are applied quickly making the developed countries spread knowledge and network

That will change science and technology environment of enterprises, promote technological innovation of the society, promote technology transferring and change the current occupation structure Businesses need to recognize the changes and embrace opportunities which those changes bring, improve and upgrade technique in enterprises

Businesses need to recognize the changes and embrace opportunities which those changes bring, improve and upgrade technique in enterprises

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-Analyzing socio-cultural environment

Social environment: includes formation and change of social classes, population

structure, movement population situation, and social power structure, mode of living and

working The status and movements of these factors all may affect business operations of enterprise

Cultural environment: include the elements of philosophy, religion, language, literature and art The impact of these factors on business of enterprise is largely indirect effects, cannot be ignored

Global Environment: Global environment includes concerned global market, the current changing market, the important international political events, the characteristics of the basic institution and culture of the global market

1.3.2 5 competitive forces model - Industry Analysis

Industries are divided according to types of properties, characteristics of product or service and its role in the national economy In any job, each enterprise must be suffered competitive pressure from 5 items

They arethe competitive pressure ofnew business entrances; competitive pressure among peers; competitive pressure of substitutes; influence of suppliers; influence of the consumer

Model analyzing 5 forces of Michel Porter will help analysis analyze these forces- competitive occupation structure is summarized in the following diagram:

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- The risk of potential competitors: New enterprises joining market may be a newly established business or a business other products before, is now dealing many products These enterprises bring to his line new capacity, and also require a certain market share

This competitive pressure islarge or smallduetomore or lesscost such enterprises must pay and reaction level of other firms when that business joins market

- Threats of substitutes: substitute is one offering similar using If substitutes’ benefit ¡is large,competitive pressures will be alsolarge (pressure on costs and prices) and make enterprise in passive If substitute manufacturer quickly develops products, this industry will be threaten its power If consumers favorably accept substitutes in both economy and psychology, that threat is greater

- Negotiating power of buyers: Customers of businesses may be directly consumed; consuming goods, consumers’ requesting cheaper prices, better quality goods and better sales services that are a pressure on that industry but customers can also be a distributor or dealer The problem is who are main customers having the power to negotiate and enterprise has to pay special attention to them To the particular goods which commonly services society, the pressure on business is "buyers"- investors give the criteria on specifications, quality, operating technology, time to complete, "the ceiling price", requires businesses to be available to meet the demands during the competition "bidding",

"selecting contractor."

- Competitiveness of the current companies:

Competition between peers reveals pattern of competition, way of competition Competition involves such following elements:

+ Characteristics of industry, enterprises can be based on industry’s assignment, its position in production process of society, its resources, engineering structure , technical outlook to analyze technical characteristics of industry

+ The structure of firm size in an industry often come in two forms, first as a big business is very big, small businesses are very small

In this case, situation of competition is not very stiff because big businesses have absolutely dominated The second oneis big businesses are not very big, small businesses are not very small

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In this case, competition will be fierce because capacity of companies in industry does not differ a lot

+Structure of a number of firms in an industry, in general, if a number of firms in an

industry are big, it proves a large market scale, few obstacles when entering market and the relatively small number of big businesses in line.If the number of businesses in an industry is small, it demonstrates a small market scale, the relatively big number of firms, many obstacles when entering market

+ Market structure of industry, supply and demand situation in market, exceeding of supply over demand, balancing between supply and demand or inequality of supply to demand If demand exceeds supply, businessneed to study howto enter market with certain advantages If supply balances demand, business must strengthen their strengths If supply exceeds demand, business need consider creating advantage for competition or withdrawing from that industry

+ Negotiating power of suppliers: suppliers of raw materials may increase prices or lower quality or lower price and increased product quality at the same time Businesses should pay attention to negotiating ability with suppliers to resolve, reach main requirements: specification and quality, availability in quantity supply, price, ability to pre-paying capital, circling capital

1.4 Model of analyzing inside enterprise: 1.4.1 Value Chain:

Value of business is measured by the volume of buyers being willing to pay for products or services Enterprises get profits if generating value is more than the costs To achieve a competitive advantage, functional departments of business have to create a

value with a lower cost than competitors, or make products different

from product of competitors in order to createa higher sale capacityin the market Therefore, business has to pursue low-cost strategy or differentiation products strategy Michel Porter, derived fromthe analysis, "Each company isa collection of activities in order to design, manufacture, sale, delivery and product

support "Each activity will increase product value "Value Chain" is divided into

primary activities and supporting activities The main activities are: internal logistic,

production, external logistic, marketing and sale after sales service Supporting

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activities are: function of materials management, function of research and development, function of human resource management, infrastructure of business

Supporting activities support for key activities, outline in more details as following: Shopping: controlling material flowthrough value chain from supply to producing and into distribution The effect of this flow can create value, contribute

to control input qualityin manufacturing process, consequently, output quality increases, price also more easily increases

Technology development: developing new products and manufacturing technology Developing technology can lower manufacturing costs, make more attractive products, can sell at higher prices As a result, research and development

affect manufacturing and marketing activities;

Human Resource Management: Human resource is the common name of employee capacity of enterprise, is the most precious assetof business High qualities human and effective are an important factor for business success

Infrastructure of company: characteristics slightly differ with other supporting activities This content is master context of all business in which happens all activities creating value

Infrastructure includes organizational structure of controlling and culture systems Senior leadership through power of management can actively form infrastructure of enterprise and then, all activities creating other value are made

1.4.2 Sustainable competitive advantage of enterprise

Sustainable competitive advantage of enterprise has 4 characteristics:

Firstly, it can help enterprises create value, reduce price, improve business efficiency

Secondly, its unique feature combines with resources in unique ways Thirdly, it has intrinsic properties; production is a_ result of interaction between units, individuals in organization, it can create basic capability of business through coordination and organization of the technical resources of enterprise

Fourthly, competitive advantage of company is formed through studying and accumulation process of business, this cannot buy in the market and it is difficult for other

to imitate

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Competitive advantage of the business is a competitive strength associated with organization Business only can keep long-term competitive advantage in the context of an ever changing market by constantly nurturing and developing

Competitive advantage of enterprise is formed by 4 factors:

Firstly, it is technical knowledge and competence of staff including knowledge and skillof each individual and qualities and knowledge of all staff Secondly, it is technical systems of business, which is technical capability system required to implement business strategy of business

Thirdly, enterprise management system, the whole strength of company is formed by regimes, regulations, organizational structure, organizational plan, leadership, encouragement, monitoring of business and leading art of leaders

Fourthly, it is conceptof culture and value system of enterprise-an important component of business

Analysis of competitive advantage of enterprise must address 3 issues: - what is competitive advantage of business, how is the current situation?

- What are effects of competitive advantage on competitive strength of enterprise? - How to develop and foster competitive advantage of business?

1.5 The EFE matrix and IFE matrix , image competition matrix: 1.5.1 EFE matrix:

This is a strategic management tool used to evaluate the current business situation, is a good tool to visualize and set the priority level of opportunities and risks that a business faces

The external factors influenced the work force of social, economic, political, legal the

process of conducting an EFE matrix consists of 5 steps:

Step 1: List of external factors have a decisive role to the success of the enterprise (including 2 groups: The opportunities and threats)

Step 2: Assign weights to each factor (from 0-1), 0 means not important, a factor that influences the most important The total score of the importance of all factors must equal | Step 3: Ranking of factors to see how the current strategy of the business response to

factors such as how, where 4 is the good response, 3 is the normal reaction, reaction 2 is

average a less reactive

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Step 4: Multiply the weight of the rankings to determine the importance score for each

factor

Step 5: Total all points weighted to determine the total weighted score of the business Total score the highest importance that a business could be 4.0 for the enterprise is responding (response) is very good with the opportunities and threats present in the environment In other words, the business strategy to effectively leverage existing Opportunities and minimize the threat cf negative impact possible external threats Lowest score of 1.0 indicates that the business strategy that does not set out to take advantage of opportunities or avoid external opportunities and overall average score of 2.5 is important

Table 1.4: EFE Matrix Elements of the external business environment The relative importance Classification Important scores 1 3 List the factors of business environment outside companies (international, national, industry .) Scored from 0 to 1, higher corresponding factor the the is more important 1 Business small 2 Business average 3 Business above average 4 Business well respond respond respond respond (4)=(2)x(3) Total = 1 Total scores = X 1.5.2 IFE Matrix:

This is a strategic tool to test and evaluate the strengths and weaknesses in key parts

(fields) of the business function IFE matrix also provides a basis to identify and evaluate

the relationship between these areas, is a tool used to shape strategy The steps:

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Step 1: The key factor inside: To inspect and determine the strengths and weaknesses in all

areas of business (can be from 10 to 20 internal factors)

Step 2: Assign weights: After identifying the strengths, weaknesses, assigning weights to

each factor, showing the relative importance of factors

Step 3: Rank: Attach the order of importance for each factor under subparagraph (can be

from 1-4; with 1, 2 shows weaknesses; 3.4 represents strengths)

Step 4: Multiply the weight of rank, we get the weights of each factor

Step 5: Add the weight of each factor, we have weighted total score: total weighted score

can range from | to 4, total less than 2.5, the internal weaknesses, over 2.5 is considered a

strong internal

Development of a matrix similar to IFE matrix EFE differs only in step 3: we classified as a point if that is the weakest point, 2 if it is the smallest weakness, 3 if there is a strong point the smallest, 4 if it is the greatest strength

Table 1.5: IFE Matrix Elements of the The relative external business Classification Important scores ; importance environment l 2 > 4 1 The most important

Scored from 0 to 1, | weaknesses

List the factors of ;

; the higher the | 2 weaknesses business environment ; (4)=(2)x(3) ; corresponding factor | 3 Strengths inside companies ; is more important 4 The most important strengths Total scores = xX Total=1 Synthesis EFE matrix and IFE matrix IE was formed to identify and appreciate the position of the business strategy Corresponding to the position of the business will have appropriate strategic direction

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Global Advanced Master of Business Administration Program Table 1.6: IE Matrix

IFE — internal factors

Strong Average Weak EFE- | Hight I 1 H external factors | Average IV V VỊ Low VII VI x

- Values: I, II, IV is the fastest growing

- Values: III, V, VII is the growth area should be used selectively or stable strategy

- Values: VI, VIII, LX is the best, as an orientation and retreat harvest, even trying to flee to

preserve force

1.5.3 Image competition matrix:

Set this matrix to identify the comparative evaluation of companies with major competitors in the same industry, the comparison is based on the factors affecting the competitiveness of companies in the industry Thereby it to the Administration recognize the strengths and weaknesses of the company with competitors, identify competitive advantages for the company and weaknesses should be overcome To build a competitive matrix images should be taken through 05 steps

Step 1: Make a list of about 10 influential factors important to the competitiveness of companies in the sector

Step 2: Classification importance from 0.0 (not important) to 1.0 (very important) for each factor The importance of each factor depends on the level of the factors affecting the competitiveness of companies in the industry The total score of the importance of all factors must equal 1.0

Step 3: Determine the weight of 1 to 4 for each factor, the weight of each factor depends on the ability of the company with the elements, of which four are good, 3 is above average, average 2 , a weak

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Step 4: Multiply the importance of each factor with its weight to determine the number of elements

Step 5: Sum of all the factors to determine the total points of the matrix 1.6 General analysis model (SWOT)

Objective environment of business constantly changes, which brings business potential opportunities Only when does company have fixed subjective condition,

those new opportunities may become true.In fact, many businesseshave a very convenient objective environment, but they lack some subjective factorsso they lose opportunity However, there are some business having inconvenient objective environment they succeed by promoting the unique knack Thus, analyzing objective and subjective factors of enterprise is very important

SWOT Analyzing: Strengths, weaknesses, opportunities and threats SWOT analyzing is key ofdeveloping strategy, clarifying strong internal forceof organizational, weaknesses and the opportunities, risks from outside

Strengths and Weaknesses are internal factors of enterprise; opportunities and challenges are external factors SWOT analyzes different factors that relatively affect competitiveness of enterprise To make aSWOT analysis for competitive advantage of business, following questions should be asked:

- Strengths: what are advantages of business? Which work does business do best?

Which resources can business use? Which advantagescan others findin business? -Weaknesses: what are weak points? What can improve? Which work does business do best? What need to avoid? Others may see weaknesses that enterprise does not see himself Why can competitors do better? Now business must realize the fact and

face the truth

-Opportunities: Where are good opportunities? What was Interesting trend? The most useful searching method is reviewing advantages of enterprise and ask himself the question whether those advantages can open up any new opportunity Business can also do contrast, reviewing weaknessesandask the questionwhether there isany chance of eliminating them

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- Threats: What are obstacles encountering? What are competitors doing? Do specific demands of work, product or service have any change? Technological change to business is risk or not? Are there problems of overdue cash flow? Is there any weakness that threatens company? SWOT model is used to analyze the strengths, weaknesses, opportunities, and challenges of enterprise to determine an appropriate business strategy This business strategy will promote strengths of business, overcome weaknesses in taking advantage of business opportunities and overcome challenges of the external environment

1.7 The overall competitive strategies:

Business pursues Company level strategy to achieve competitive advantage, perform better than competitors in orderto achieve higher revenues on _ average Businesses often choose from three basic strategies: Leadingon costs, product differentiation and focusing

1.7.1 Leading cost strategy

It is strategy to produce goods or services at lower cost than competitors

This strategy has two fundamental advantages First, with lower costs, the cost leader can set a lower price, but business still get profit equal to opponents If firms in

an industry reachthe same value fortheir products, leader incost can be more

profitable because of lower costs Second, if competition in the industry increases and businesses compete ¡in price,costleader can be in viable competition than other

businesses because of their lower cost

Leading incostcan be protected from competitors in industry with its cost advantage; low cost means thatit will beless affected than competitors from increasing price of inputs if suppliers are power and less affected by reduction of prices oftheir products and buyers have more power; leading in cost often requires much bargaining strength to suppliers, if substitutes start entering inthe market with low

cost, leader can reduce price to compete, maintain their market share

With the advantages in cost, cost leader increases barriers to entry It is difficult for other businesses to wantto join industry with appropriateness of cost or price of cost leaders Cost leader has a relatively safety positionas long asit is possible to maintain its cost advantage and price is key toa significant number of buyers Low cost

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only has competitive advantage if business ensures a degree of certain differentiation of products which consumers know and accept

1.7.2 Product differentiation strategy

The purpose of this strategy is to gain competitive advantage by creating products, goods or services which are unique in consumers’ view An enterprise makes their product different to satisfy consumers’ need in a way that competitors cannot

Product differentiation can be achieved by three main ways: quality, innovation and adaptability to customer Renovation is very important to complex technology products attraction of product to original expectation of differentiation A psychologically difference of customers can become the origin of product differentiation The appeal may be factors associated with status or pride of groups of age and socioeconomic groups In fact, basis of product differentiation is endless

In deciding to pursue a separate capacity market, product differentiation focuses on organizational function providing the source of distinct advantages of its products Product differentiation is basis for innovation, technological capability and relies on research and development functions The product differentiation of work differ from competitors, customers’ loyalty to brands is a very valuable property Threat of substitute products depends on ability of rival to products satisfying needs of

customers that product of differentiation consumers interest, breaking of

customers’ loyalty to labelof business Product differentiation requires high _cost, hence, pursuing combination strategy is the most beneficial and businesses quickly take advantage of new production,

material management and marketing methods 1.7.3 Focusing strategy

The focusing strategy differs two above strategies mainly because it is oriented to serve needs of a limited group of consumers or market segment Enterprises pursuing this strategy concentrate on serving a specific market segment, the segment can be determined by geographical criteria, type of customers or a branch of product line

Through either product differentiation or low cost Essentially, focusing business is a product differentiation one or cost leader A focusing business has many opportunities to develop their own activities and compete with low cost ones and product differentiation is

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getting larger Focusing strategy Focusing strategy creates an opportunity for entrepreneurs to fill that "gap" of needs of customers

Competition among focusing businesses originate from its unique capability- efficient, quality, innovation, or adaptability to customers It is protected against competitors by the extent providing goods and services that competitors cannot Creating loyalty to customers reduces threats from substitute products

Another advantage of focusing strategy is to allow businesses to be closer to customers and respond promptly to changing demands of them Because focusing one produces less volume of production, costs are usually higher leading cost enterprise, higher cost may reduce profitability if the focusing one isrequired toinvest more on developing a distinct possibility; the market segment of focusing business may suddenly disappear because of changes of technologyor changes of consumers’ preferences

The disappearance of market segment is reason why many small businesses fail; product differentiation businesses compete to grab market of focusing people

Managing competitive strategy successfully requires strategy managers to pay attentiontwo main issues: Firstly,ensuring thatdecisions about products /market / private capacities is oriented in a certain competitive strategy

Secondly, Monitoring environmentin order thatorigin of competitive advantages of enterprise is in accordance with opportunities and threats

1.8 Selection and strategic decisions:

QSPM matrix using the inputs by the analyst to "decide" objective of the strategy has the potential to replace It is a tool that enables the strategic objective assessment strategies can be replaced, first based on the key success factors inside and outside have been identified and the analysis tools to form other strategies Strategists need to have good judgment by intuition to choose the strategy of the matrix QSPM

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Table 1.7: QSPM Matrix

The selection strategy can

The main factors

Classification | Strategy | Strategy 2 | Strategy 3 The internal factors: - Management - Marketing - Financial - Accounting - Production - done

- Research and development - The information system

The external factors: Economics - Politics - Law - Society - Culture - Population - Techniques - Competition The internal factors: one is the weakest; 2 is at most weak; 3 is less powerful; 4 is the most powerful

The external factors: one is the response activities of the company is low, 2 is the active response of the average company, 3 is the response activities of the company is above average, 4 is active dynamic response of very good companies The steps required to develop the matrix up QSPM

Step 1: List of opportunities / the large external threats and weaknesses or strengths within key

Step 2: Classify each critical success factors inside and outside

Step 3: Look at the stage 2 matrix and identify possible alternative strategies that businesses should consider to make

Step 4: Determine the gravitational

Step 5: Calculate the total number of attractions

Step 6: As public attractions The higher score indicates more attractive quality

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The enterprises in the business process must always determine the annual goals and long- term goals for themselves Today, the strategic management process is increasingly widely used to help them proactively anticipate and actively influence the environment through which helping strategist administrators and staff understand the work the priority of the business logic methods, systems and objective in determining the future development of enterprises, help enterprises to operate effectively Management strategies will not ensure a successful business but it helps the strategist to make decisions taking a more active, creating a positive change of direction, objectives consistent business enterprises

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CHAPTER 2

ANALYSIS ON THE REAL CONDITIONS OF SONG DA THANG LONG FOUNDATION JOINT STOCK COMPANY

2.1 General overview of Song Da Thang Long Foundation JSC: 2.1.1 Formation and development process

The first form of Song Da Thang Long Foundation JSC is the Building Enterprise | which was established in 2008 It belonged to the Song Da Thang Long Foundation JSC —a big real estate company of Song Da Corporation In 2010, due to the business scale development and huge revenue, the Building Enterprise | — Song Da Thang Long Foundation JSC — was equities into Song Da Thang Long Foundation JSC (Song Da Thang Long Foundation JSC covers 30% of the charter capital)

At first, Song Da Thang Long Foundation JSC implemented construction assigned by Song Da Thang Long Foundation JSC; now it rapidly develops into the number 1 enterprise of Vietnam, specializing in building basements, drilling cast-in-place piles and constructing foundation

The enterprise has taken part in a number of national important projects such as: Constructing the foundation of the new headquarter of the Ministry of Foreign A ffairs’s, Dong Tru bridge — extended highway 5, Tran Thi Ly —- Nguyen Van Troi bridge over Han river — Danang, constructions of Noi Bai — Lao Cai highway, the new urban area Van Khe — He Dong which includes all the foundations of 9 buildings from 35 to 50 storeys, Anh Son —- Nghe An cement enterprise, the mixed 40-storey- building Hattoo, Elip Tower high- grade 33-storey condo-office for lease, constructions of Long Thanh — Dau Giay highway

The enterprise has modern equipment of Bauer and Soilmex brands to build cast-in- place piles and enclosures, with high-qualified employees

2.1.2 Business fields of the company

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Global Advanced Master of Business Administration Program - Real estate - Real estate consultancy, management and auction - Advertising

- Consulting in bidding and calling for tender

- Drawing investing projects and managing construction investment services - Construction equipment for rent

- Building every type of houses

- Implementing railways, highway, and public constructions

- Civil constructions: Ports, on-river constructions, harbors for tourism, drain mouths, dams, dykes,

tunnel, outdoor sport constructions - Implementing clearance

- Installing electricity and water systems, heater and air- conditioner

- Installing other constructing systems: Elevators, moving stairs, types of automatic doors, lighting, audio and entertainment systems

- Perfecting the constructions

- Implementing other specialized constructions - Cleaning houses and other constructions services 2.1.3 The management structure

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Global Advanced Master of Business Administration Program Figure 2-1:The management structure of Song Da Thang Long Foundation Joint Stock Company THE COUNCIL OF MEMBERS THE SUPERVISING BOARD OF MANAGEMENT HUMAN > RESOURCE > CEO EQUIPMENT — > MANAGEMENT FINANCIAL MANAGERS VICE- PLANNING ‘ DEPARTMENT TENICAL VICE- DIRECTOR CONSTRUTING BUILDING AND SOUTH VICE- > DEPARTMENT INSTALLING DIRECTOR FINANCIAL = ACCOUNTING AUCTIONING PROJECT DE BRANCHES Ỷ PART BUILDING NERS AND

Source: Song Da Thang Long Foundation Joint Stock Company

The highest organ of the company is the Council of Members On behalf of the Council of Members, the Board of Management manages the company and implements all the decisions of the Council of Members The CEO directly manages all the business

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operations of the company Elected by the Council of Members, the Supervising Board, on behalf of the Council of Members, supervises the activities of the Board of Management, CEO and all the business activities of the whole company In terms of function, the company’s management structure includes: The Board of Management, the CEO Board, assisting departments and branches, relevant teams and construction supervising groups

At the present, the company has | branch in Ho Chi Minh city, 3 building and installing teams and many construction supervising groups from the North to the South, supervising the building of drilling cast-in-place piles There are 6 assisting departments: Administrative Department, Project-Investment Department, Planning Department, Technique - Building Department, Mechanical Management Department and Financial Accounting Department

2.1.4 Business outcomes

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Source: Report by Song Da Thang Long Foundation JSC - 2011 2.2 Vision, mission and objective of the company to 2020

2.2.1, Vision

The company wants to be in the top 3 enterprises specializing in drilling cast-in- place piles, constructing foundations, tunnels for bridges and high-rise building in Vietnam; having prestige in both domestic and foreign markets

2.2.2 Mission

Employees in the cornpany are determined to renew and develop the company which contributes to the national industrialization-modernization strategy They all have the spirit of developing the whole organization, increasing the producing capacity, improving the prestige and competition ability to have increasingly effective production, enhancing employees ‘lives, ensuring the dividends for shareholders, fulfill the obligations to the Government, rising up the company’s wealth

2.2.3 Strategic objectives until 2016 and 2020

— 2012 — 2016: The company aims at the stable production and development, business volume of over 1000 billion by 2016; product density of drilling cast-in-place piles and foundations of 70-80%, industrial production of 5-10%, mechanical processing of

5-10%, real estate of 5-10%

— 2016 — 2020: The Company aims at improving the building capacity, developing the project investment The business volume is expected to increase from 10-12% annually, 2020’s business volume is 2.5 times as much as 2010’s of 1700 billion The company’s annual revenue is supposed to increase over 8-10% with the following fields: Building of

60-65%, industry of 15-20%, constructions and semi-constructions of 10-15%, mechanism

and constructing mechanism of 8-12%, real estate of 5-10%

2 3 An analysis of the external environment of Song Da Thang Long Foundation JSC (SDTL JSC):

2.3.1 Macro environment analysis a) Demographic environment

With the total population of 89 million up to 2010, Vietnam now ranks the 14” among the most crowded countries in the world; and the number is expected to climb up to 111.7

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million people in 2050 The rapid increase in population might not only limit the investment budget, but also lead to a high demand for superstructure and infrastructure construction needed for accommodation and transportation purposes

In the population structure, the majority are under 30 years old and to be in the working age Besides, the awareness about the importance of constructing an industrial development towards residents as well as enterprises in the economy is gradually raised People desire a modern infrastructure system; a more comprehensive and timely planning on urban, superstructure, and services

b) Political and legislator environment

- Politics: The stability in politics can assure a stable business production environment The Government of Vietnam manages the market economy with these following perspectives:

+ Distinctiveness: A multi sector market economy, which is mainly regulated by the State economy, together cooperate to foster the national economy foundation

+ Common features: Acknowledge the independence of the market economy subjects, comprising of individuals and enterprises They make economy decisions and take the responsibilities themselves; establish a competitive market system in which the market sets the price; construct an effective macro-economy regulating mechanism for guiding, supervising and controlling the market; finalize the legislation system and economic laws to ensure the legal basis for all economic activities

- Legislation: More and more concerns are paid to the legal system make it reach the comprehensiveness gradually, facilitating the favorable conditions for business production environment

Investment management policies are improved on the aspects of enhancing the supervising activities, reducing the direct intervention of the State into investment activities, completely decentralizing to sectors and localities the State authority in making decisions in order to foster the construction effectiveness The activities attracting the foreign direct investment ODA, FDI are getting much enforcement, mainly on the field of industry and building with 81.3%, services sector with 13.3%, and the remaining percentage of agriculture, forest and fishing aspects

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Enterprise Law, Construction Law, Investment Law, Procurement Law, and Competition Law are put into effect; together with regulations on business activities are developed to eliminate the discriminative prohibitions and create a fair competitive environment for all construction enterprises The more and more comprehensive legal system which is getting closer to the international norms and practices has created such an attractive investment environment for Vietnam The open diplomatic policies are showing their effectiveness, fostering rapidly the improvement of construction investment situation in Vietnam; hence more and more large projects are invested and developed here

2011 is the year in which Vietnam’s Government applies many policies towards Real Estate arming to stabilize the macro economy Consequently, it is considered to be such a hard year for the whole construction sector, in which constructing enterprises are directly affected However, given the stable political context and policy mechanism, legislation to warding macro economy stabilization and social security development; this is a very good condition for all constructing enterprises to grow in the coming years in general and for Song Da Thang Long Foundation JSC in particular

c) Economic environment

In 2011, Vietnam’s economy suffered many difficulties as severe financial crisis, high

inflation rate, large public debt, etc.; hence our Government has implemented a series of policies for

the sake of stabilizing the macro economy This, in the short time, affected seriously almost constructing enterprises

Vietnam is a developing country with such a high growth rate of the economy To the aim

of long — run macro economy stabilization, the need for investment on infrastructure, urban

development or services support for the residents is very large; this is a favorable condition for the basic construction to develop However, the unsynchronized policies implementation results in the lack of control on fluctuate changes of the interests, exchange rates and the high inflation rates All these factors have direct impacts on market price, leading to high production costs, lower production efficiency, and even severe price competition among sectors

The global integration or globalization is a unenviable development phase that no country deridng a development can stand out Thanks to this opening — economy tendency, Vietnam has

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recently gained advanced achievements However, this at the same time arises many challenges for our country — a newly opening economy with low starting point and weak infrastructure system

Especially, the strengths of international enterprises on aspects of capital, technology, modern management techniques brought to Vietnam can put extremely high pressure on the domestic construction companies Integration means an opening period for other foreign investors coming into Vietnam, ad equating an opportunity for the expansion of a more diversified construction market Simultaneously the foreign enterprises will pour

into our market, causing a harder competition Therefore, in order to survive and develop,

our domestic enterprises should establish appropriate strategies that displaying innovative thinking and management practices, improving capacity in using modern technology to increase productivity, lower the costs to compete and stand in the market

- Economic policies relating to the sector in the coming years

+ The philosophy of developing the industry faster; improving the quality, competitiveness, and modernization; implementing the policies that foster favorable environment for investment activities, business, and enterprise development; attracting foreign investors; stabilizing money value in 5 years; controlling inflation; developing rapidly and enhancing the effectiveness of technology and scientific activities The need for

some industries as Electronics, Cement, Iron, Chemical fertilizer, mining, and

mechanical, etc is very high

This can bring golden opportunity for many enterprises to develop in the field of providing materials for other industrial sectors Vietnam’s transportation infrastructure is very backward in comparison to the world, from transferring equipment system to management Our high way rate accounts for only 0.1%, while in Thailand is 13.3% Our total number of bridges is not enough to meet the demand of travelling for a country with such a high rate of rivers

Besides, Vietnam still has not either had the high — speed railway systems or modern airway to meet the multi method transportation requirement Hence, the need for investment on infrastructure is very high; with the expected total amount is 2,200 to 2,300 billion VND in the period of 2011 — 2015 (around 110 to 115 billion USD) More specifically:

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Global Advanced Master of Business Administration Program Table 2-3 A review on investment need of infrastructure from 2011 to 2015 Infrastructure Total capital (Billion VND) Transportation infrastructure 1.100 -1.150 5 ist—‘“‘<“‘“<“<zx RT Urban and Rural infrastructure |220 _ có Source: Data from the Ministry of Planning and Investment 2010

In the period of 2016 to 2020, the total investment amount needed reach 3,700 to

3,800 billion VND (equivalent to 185 to 190 billion USD)

Such a large investment on developing industry as well as infrastructure can be a very good condition for enterprises to develop, including Song Da Thang Long Foundation JSC

d) Social environment

- The social environment of the enterprises

In these years, along with the country’s development, Vietnamese living standard is gradually improved; the desire for a more equipped society with full infrastructure and services, industry development in order to produce more and more material value for the whole society is on the increase This is advantage, but also pressure in developing the construction sector

On the other hand, in recent years, corruption in basic construction and the fraud phenomenon in procurement have lead topoor quality work,loss of capital investment, slow progress, and more seriously the creation of an unhealthy market competition Some unitsin the construction sector which have poor management and poor performance, try to keep the business survive by finding all ways to lower the price or bid at a very low auction price During the construction process, as they cannot cover all the costs, they tend to cut off material used, change the material category to ones with poor quality As aresult, many construction works show serious degrading just at the time of finishing

This requires a careful consideration with suitable selection method from the authority and the investors in finding the best construction agent that satisfy all technical requirement of the work with reasonable costs This can be a good opportunity for enterprises with real ability Those have gained established brand on the market and maintained the creditability with the

investors can have more chance to bid - Cultural environment

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comet POLAT RA "gui lâu REDE

The society is getting more and more modern with the increasing trend in international integration The shifts in social values as people are paying higher and higher demand on the spiritual life cause the higher desire to travel or stabilize the livings according to the philosophy of Vietnamese “Stabilizer life first, develop career comes later’ Besides, the increasingly high demand for accommodation leads to higher demand for transportation, urbanization; which creates good conditions for basic construction to develop

e) Technology environment

Our Government and Party set the philosophy: develop rapidly and upgrade effectively the activities on science and technology

Foster the research and application of technology and scientific achievements, creating innovation on productivity, quality, and effectiveness in every sector, every fields of the economy Enhance rapidly the internal technology and scientific capability together with learning from other scientific and technology achievements all other world

Set out the policies those motivate and support enterprises to change and transit the technology, research and implement science and technology achievements into production

Make use of the talents, leading scientists, general and chief engineers, and skillful technicians

Scientific and technology level in construction sector: We have fostered the activities on researching, applying, transiting the technology of construction aspect Vietnam now has obtained these achievements:

- Nearly 90% of tasks in the leading Design Counseling Company of the sector have made use of technology and digital

- Enterprises have applied information technology, and software on designing, managing, forecasting The management of the projects is now following the modern tendency with international practices

- We have gained certain success in the field of constructing piles, foundation, and basement; modern equipments and technology being made from German, Italia, Japan such as pile — digging machine can dig a depth of hundreds of meters into the soil with the large diameter either on the land or in the water has confirmed the advanced effect comparing to the previous one in the past With the current scientific and technical development, the manual work has been replaced by automatic machine The problem for enterprises is to make

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appropriate investment to get the most efficient use of the machines, meeting the requirements on technical, quality, and speed of the work in the most optimal way

The rapid changes in science and technology more modern, more effectively will push enterprises to the new competition on technology The enterprise that leads the innovation and technology modernization will obviously take the advantage in improving the products’ quality and reducing the price with the high — technical requirement works

f) Global environment

- The world economic relations are on the increase The trend of unity on the world economy with the emerging of many transnational companies (in the 60s of 20" century, there were only 7,276 transnational companies all over the world, including 27,300 subsidiaries

Till the beginning of 90s; 37,000 ones with 170,000 subsidiaries existed)

- Impact on economy, or science and technology policies domestically Vietnam’s

activities as a member of ASEAN, AFTA, WTO; globalization tendency, international and

regional integration have created favorable conditions for attracting investment capital, widening the global integration connection for the business production;

- Along with above factors is the challenge that enterprises must face For instance, the free regional trade policy or the tariff barriers remove can be a big problem for Vietnamese enterprises due to the severe competitions arise from other foreign enterprises Hence, in the process of building the development strategies, the enterprises must improve their own capacity and recognize the management requirements in the current international conditions: Take into consideration the society's aggregate objectives, spirit

encouragement practices, talent value, corporate culture construction, leadership

management renewal

2.3.2 An analysis on the sector’s environment (5 — force model)

In the current construction field affected by many macro-environment factors of Vietnam and from the world, there are a lot of different factors affecting the enterprises from sector’s environment The 5 — force competition model developed by M Porter has helped managers in analyzing their own businesses The pressure comes from 5 main aspects, namely: new entrant’s competition, pressure from enterprises and current competitors, substitute products or service pressure, supplier’s pressure, customers’ pressure

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a) Pressure for market’s new entrants

- The Government’s regulations: Enterprise’s law, multi sector economic policies, broad auction, foreign investment create opportunities for new entrants to “overcome barriers” to access to the sector and increase competitiveness;

- In the context of rapid development of the country, real estate’s market booming, strong investment on the social infrastructure system from the State; many new enterprises will appear in the construction sector in general and in the foundation construction in particular These can be newly born business units, or big enterprises but lacking competitiveness in the aspect of pile digging foundation However, these companies understand the investors’ needs; accordingly diversify their construction fields in order to avoid the technology’s dependence on other enterprises

Besides, in civil engineering or road construction, the cost foundation handling is usually prepared very carefully by the investor to obtain the high liquidity payment and efficiency of production with big business, the share importance of values and pile foundation of value accounted for a large portion

So, there aremany businessesin the construction industry that do not

have experience in the field of construction, foundation treatment has expanded the

manufacturing business aspect of their own enterprises

- Calling for foreign investment will make appear many foreign contractors into Vietnam Foreign contractors have the competitive advantage capacity to participate, but due to the high costs hence they are mainly in partnership with other units in the industry

- Enterprisesin the sector with advantages incost, experience, expertise, technology, capacity (labor, equipment, and capital);the advantageof scope, higher output, higher

productivity, lower costs, advantageous tender criteria for selection of contractor; have the

advantage of product differentiation, new technologies, timely technology transfer; advantage of prestigious business image in the industry

b) Pressure from the customers:

AS a joint-stock enterprise Song Da Thang Long, a big name in the real estate investment market asthe main shareholder, with the guidance from Song Da Thang Long for main foundation construction industry and installation of the foundation, the projects backed by Song

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Da Thang Long as an investor ora general contractor construction The former customers are almost Song Da Thang Long Foundation JSC, the company is assigned to multiple categories of works such as construction projects: new urban area Van Khe, high quality residential and office parment Song Da -Ha Dong, a new State Department office apartment Truong Dinh Hoi Il, III - Ho Chi Minh city, the park service provides high-end residential resorts An Vien-Nha Trang, U hotel in Hue city

In recent years, the value ofconstruction worksin the system company Song Da ThangLong JSC accounts for85-90% of total construction output valueof the company Orientation of the Song Da Thang Long Foundation JSC is to determine to continue investing much larger projects in the coming years

This is a huge advantage for the expansion unit with depth development of piles and foundations, because any public works project for urban condominiums that are important to the foundations and bored piles, diaphragm wall, and basement

Therefore, the company has determined that the traditional markets are the Song Da Thang Long Joint Stock Company and other affiliates links

Currently customersof the company’ isexpanding, and more and more customers are general contratos with theadministrationunder the Ministry of Transportation as the corporation construction _ traffic (Cienco), the Thang Long Project Management Unit (PMU Thang Long) and corporations invest in developing Vietnam expressway and corporation infrastructure development with financial investment in Vietnam are the investors, capital and hub arrangements for decentralized

management, subsidiary of the bidding, selection of contractors for construction of road works There are also investors in the companies, joint-stock enterprise, foreign privates include the followings: Vina Megastar Group JSC, Investment Advisory Building Ba Dinh District JSC, Thang Long Public Real Estate Corpo ration, Heunghoo Vina Co., Ltd Vina Youngha, GS E & C Company of GS Group (South Korea)

- The govern ability of main investor (Government) in current mechanism is very high: in term of plan, the criteria for choosing or omitting contractors regarding of sector development can be beneficial for employment to agencies in the sector; price imposing (“price ceiling” auction criteria; price adjustment; additional volume or arising )

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The institution is quite rigid, the payment procedure is slow and long, the condition is quite subjective and unravel The investor’s responsibility id not regulated clearly, in fact the advantage always is bias to the investor’s side, causing loss to the contractor

- The increase in projects BTO, BT which invest in building infrastructure creates many new investors; this tendency is called rising foreign capital investment as lack of domestic investment capital

c) Competition among existing companies

Since the time of cperation as a branch of Song Da Thang Long Foundation JSC — Number one construction unit till 2008, and later being capitalization into Da Song Thang Long foundation JSC; the business after a 4 — year operation has become stronger and stronger, with the established position in the nationwide market of pile digging works Currently, the company is one of the most competitive and effective business units in the construction field, proving through the average revenue and profit of the company which are usually higher than the average level of the sector

Specifically, the company’s revenue and profit in 2010 was 459.9 and 15.6 billion VND, respectively

In terms of technology capacities, construction companies with the main purpose of building and dealing foundation all the time take the leading place in investing on the purchase of equipments and technology used for pile digging or foundation solving The Song Da Thang Long Foundation SJC is the latter comer in construction sector, so it has had more time to research and invest in modern advanced technologies, meeting the high demand of works such as Bauer’s pile digging (Germany), or Soilmec’s (Italia), which account for the largest portion in Vietnam in comparing to all other foundation dealing companies

Basing on the analysis results and the real constructing situations in the market,

together with consulting opinions from many experts and customers, the competition matrix of three companies as described as follow:

Table 2 — 4: Three companies’ competition matrix

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