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Development strategy for the national institute of infectious and tropical diseases to 2020

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CAPSTONE PROJECT

DEVELOPMENT STRATEGY

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Gricc ZRICC Group 8 - GaMBA01.M05

STATEMENT OF AUTHORSHIP

Except where reference is made in the text of the thesis (Capstone Project), this thesis contains no material published elsewhere or extracted in whole or in part from a thesis by which we have qualified for or been awarded another degree or diploma

No other person’s work has been used without due acknowledgement in the main

text of the thesis This thesis has not been submitted for the award of any degree or diploma in any other tertiary institution

Group No: 8

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BỘ Y TẾ CONG HOA XA HOI CHU NGHIA VIET NAM

BENH VIEN BENH NHIET DOL Độc lập - Tự do - Hanh phúc

TRUNG ƯƠNG

Số: ;¿ /NĐTU Ha noi ngay 18 thang O1 nam 2010

Kính gửi: Trường đại hoc Griggs

Chương trình đào tạo thạc sỹ quản trị kinh doanh Quốc tế

Bệnh viện Bệnh Nhiệt đới Trung ương xin gửi tới Trường đại học Griggs, Chương trình đào tạo thạc sỹ quản trị kinh doanh Quốc tế nhận xét về Đề tài:

“ Xây dựng chiến lược phát triển của Viện Các bệnh Truyền nhiễm và Nhiệt đới Quốc

gia đến năm 2020” (nay là Bệnh viện Bệnh Nhiệt đới Trung ương) do nhóm tác giả thực

hiện như sau: Đề tài đã đưa ra được bức tranh tổng thể về chiến lược phát triển của Bệnh

viện từ nay đến năm 2020 nhằm đáp ứng được nhu cầu phát triển của Bệnh viện nói riêng và ngành y tế nói chung Đề tài cũng mang tính thực tiễn cao, có thể được áp dụng vào thực

tế của Bệnh viện trong quá trình xây dựng và phát triển

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Griccd) Group 8 - GaMBA01.M05 CONTENTS [INTRODUCTION 000002020011 2n nh nh nk kh nh khe § Chapter |: Th€OFY c2 SH KT ĐK km nh nh ki na 11 l.] - CONC€DIS c0 Q HS HH HH n Km kh kì nh he 11 1.2 Stages in stratepy establishmenI se 12

1.3 Analysis of the öoperationai environment of te business orgari2ation Ì Š

1.3.1 Analysis of external environmenI ««« 16 1.3.2 Analysis of internal environmenn 20 1.4 Proper strategies for the organ1ZatIOn «<< <s- 21 1.4.1 SWOT MatrIX co HQ HH HH nh shn 21 Fg Me IN cc ocosn 545 Guanine 0 wins eresrers 4 waaperies deanine, 8 Caceres eutSiabehs enone 23

Chapter 2: Analysis and evaluation of the operation of the National Institute of

Infections and Tropical [DÍEA964 c (code con sa ecerbs se 29

2.1 General introduction to the instItuf€ <<«‹ 29

TL G — TÔ” TC số TC Ì 77/0 707 10/2 S300 Ð 09 HE VỊ HỆ (Lọ HỆ 29

2.1.2 THẾ 0fWRBIZSfGf GÝTfi€ hOSWHNÌ (.((2‹2222441(2227/0227222126 30

“.1.2, TH HðY ĐI WIREUN.(oa i40 2000ycicsopGedit200 0610000660204 42s66c41td20%x 32 2.2 Analysis of EXiernal EnyifonittefL eee.ĂVe« 32 Late Nc, XJếWRIeElfYITO(HEDEs cioc cc(ccceot012020//1600074- 020020 pete dias 32 2.2.2 Industry environment (Medical environment) 37 2.2.J, COI(GHŒfS” BEVHDNGGI c c0 2202k 2s cs6addscreslovgSse 38

2.3 Analysis ofinternal environmen - «-+ 42 EF II MU cctrbikeccapoiseor bieeseisosesese cerliaglllyv cssibasiE+aledSV keesaSMt SSfsgSi 42 2.3.2 Organization and HR cc cà Sààseeee 45

2.3.3 Infrastructure, facilities and technology -.-‹ ‹-«- 48 2.3.4 Image of the hospital and its brand ‹-«- 49 “.i”, LURE RI TOSCBUO ies 6 crcecssees 5 cnsione 5 1S aeee s omenies sven a remed Meee 50 2.3.6 Leadership Im the fight against Infectious điseases 51

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GRIGG Group 8 - GaMBA01.M05

2.3.7 International €OOD€TALION cu nh nh nh ng 51 Chapter 3: Establishment of the development strategy of the hospital to 2020 52 BR TT 10 paces perience exacnsnr ts secmane 949 smarmcraee «4 mensones anne + pseemae eee 52 Bite SNES NỈ rere 25 e srecctns 2 scree $5 diteewennn 3 <5 ewomnmn senna a panera tons 52 3.3 Bases on which NIITD sets up goals and obJectIVes 52

1.11 ENẾVEHNDHIWUTESIEHWHIRÍESSrrkioicnddiinn vi xearnienes s notiene seseemeind +4 08 52 Bokedes SSVI TẾ NI TY sưa ii can nước s anemmmer tsaneneos 54s sane NGA030139163 9 00120116 55

1.1.2 HỮTfAI-E1ifil NHAN caaeaccgauaiieecccaỷeoaniiiiiiidd chággge2nuaene 56 3.4 Establishment of developrnent strategy cceieeỶ 58

SA SH6lg0v ð0n Wofkiilg SKÌNNN: các: keaiiiniricienooioia soi ba-ipsjkscersei 58 xuất TIENEDW BH NDEDEeorceienssiroavrrria ko veisnernoiosiskaynoponng saiprang gnng0gnsnE 62

3.4.3 Strategy on structure and organization «0:00 iseressonaevessedovennns 62

S.A Ntafeeyon HN GVEIGDIEHÍ i.cecseearo co CD co BebLodcei 66 3.4.5 Strategy on infrastructure and other facilities 66 3.45 PNNNEONE XHNEDDWGreecoeeeesi.cceeeiceeooooneciciecccecoyelcss 0á bai 67 3.4.7 Strategy on professionalzing the services provision of the hospital 69 3.4.5 Inaplemmentation rosdiiaph csicc cessescdlessssevcesece sepseeressebnredsenens 69

D0: RHCOINHWINONIOfA ịroei022666.iii0n0001.ïi 1clodnesenogigl0ai soi faryrel 71 CCRT cisssccscs sensins » wearnns cwalea| o4 carsaeerseannnnephnnssniil'e edie? Ohne leeiwels 73 HH T1 e2 cŸẽacŸeeaacằằ cố ằẽ cố hy em ee 74

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GRIGGS Group 8 - GaMBA01.M05

LIST OF TABLES

Table 2-1: Description Ol WarS con nh kh nh na 32 Table 2-2: Comparativeness and market share in 2008 38 Table 2-3: Number of patients when NIITD was a department

of Bach Mai hospIfal c2 SH nh kh nh nha 4I

Table 2-4: Number of patients after separation ca 4i Table 2-5 : Financial figures over the past thre€ y€AFS c cà cà 43 Table 2~ 6: Spendingys over the Years « «scsscss is excmme s vances ss sewnns aoanene ss iawwestemwns 44

Table 2-7 : Differences in revenue and spending ‹ ‹ 44

Table 3-1: Estimates of patients to 2020 0.0 ccc ccccee cee ec ceases een eenaeneaeaee 53

Table 3-2: Score table of internal factOrS - << << << << << 56 Table 3-3: Score table of external factors «0:00 seuss spine eines aaeueteruscnnasbinnemens 57

Table 3-4: Human resources development pÏan ‹- 66 Table 3-5: Estimation of main financial sources up to 2020 68

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Grice sZRIGC Group 8 - GaMBA01.M05

LIST OF FIGURES

Figure I — l: Comprehensive model of strateøy managemehnI 11 Figure 1 — 2: Model of the relations between business organization, external and

TRE ee de sờ gian wenngce aeheresaa> 1 eed event srdemintecemdees lễ

Figure 1 — 3: Model of five competing forces according to M Porter 18 tiếng la: TH: HE 1: aseecovesde:: taaicabobvibirduoiLionsssioisidonidy3tengas 23 Wagere 1 3: FE Te cn ceca s sere a ss snes os ores «sores tarewen ss emmene sasaromes oe mean 27 Pigere 2-1; Diente Of MTD sisicics 1 aenowms seenwasa savas sjanzmas} oxnmmmnsamensatins 31 Figure 3+ 1: Model SWOT Mate, «5 sscsss a sxcwwes canes crsmvnnss canes semen ssnnmmenes 55

Figure 2— 2: Motel GP TF GE, Matis 5 os icssiiae: seaicn ss somtassgaiwes eamimacsatanntvatuawes 58

Figure 3-3 : Gantt model of activities and their time frame 69

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GRIGG Group 8 - GaMBA01.M05

LIST OF CHARTS

Chart 2-1: Number of patients overt the years wu isis: scwssasssancws scsaansssamanne ss sowed 4] Chart 2-2: Comparison of revenue and spending over the years 43 Chart 2- 3: HiatribuHori 6Ý flutfiafi TESOUCES cccccccconncc on nua ko ng5á G13 036264 ganoi 47 Chart 2- 4: Distribution according to education and qualifications 47

Chat 2- 5: Dietribtillohi đ6eordliNg lơ HEGS:::.osicc cac ba nhai cái gia na tá a0t6x cvyrtaaasa vanei 48

Cheñt 3 = ï: Esiiwiftes:óf Patients 06 2020) «sisi iss sanccssaanes spnmanans sanine a1 swans se 53

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Griges) SARIGC Group 8 - GaMBA01.M05

INTRODUCTION

The system of state-run hospitals in Vietnam is considered vital part of health

care system in the country State-run hospitals receive a big part of total medical spendings of the state budget, accounting for 35.8% Increases in the financial resources and in the quality of services are those which should be paid attention to To do this, the goverment of Vietnam issued two important decrees No 10/2002/ND-CP and 43/2006/ND-CP which gives state-run hospitals autonomy in

their financial policies These two decrees are hoped to ease the operation of state-

run hospitals by giving them a chance to increase their financial budget In addition, these are also hoped to give momentum for the whole medical system to increase their service quality and increase the public health

In recent years, tropical and infectious diseases such as HIV/AIDS, SARS,

different types of flu (HIN1) strike Vietnam heavily The National Institute of

Infectious and Tropical Diseases (NIITD) is the leading medical organization in Vietnam which is fighting those diseases However, so far there is not a very comprehensive development strategy for the hospital In order for the hospital to

operate more effectively, it is necessary to establish a comprehensive development

strategy This study is conducted with the hope to provide a development strategy

for NIITD to 2020 Aims of this project:

- Provide a brief review of literature on the planning of development strategy - Provide some analysis, assessment and evaluation of the operations of NIITD

over the past three years and different kinds of factors (internal and external) based on which the development strategy for NIITD will be built

- Establish a developmental strategy for NIITD from 2010 to 2020

- Work out measures and make some recommendations and suggestions for

NIITD to achieve its strategic goals

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GRIGG Group 8 - GaMBA01.M05

Subjects and scope of the study:

Analysing business environment of the hospital from 2007 to 2009 in order to orient

the business strategy for the period of 2010-2020

Methodologies:

Data collecting methods:

Primary sources: personal meetings with those in charge and those who can provide information (Board of Directors and staff)

Secondary sources: hospital’s reports, newspapers, medical magazines, Internet, etc Comparison, analysis and synthesis:

Make comparisons between different variables, between specific objectives, goals and real business achievements, etc Then the authors will analyse the differences

between variables, objectives and goals set up and those real achieved After that,

they will synthesize and summarize the results

Use of tables, figures and charts:

The authors will use the tables and charts to find out the common things or

differences or trends of those variables analyzed and reflection on them

Connection with experts:

The authors of the papers consult with experts in the subject matter for further understanding of the data and conclusions of the matters concerned

SWOT method:

Idenitifying and analyzing strengths, weaknesses of the hospital, opportunities it has

and threats it encounters

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GRIGG Group 8 - GaMBA01.M05

IE method:

Giving points and score to work out the direction for development of the hospital The authors of the papers will also try to use the data collected to reflect on theory in the area of developmental strategy and use the ideas in the theory to evaluate the operation of NIITD

Organization: Three chapters Chapter |: Theory

Chapter 2: Analysis and evaluation of NIITD operations

Chapter 3: Establish the developmental strategy for NIITD to 2020

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(1 Global Advanced Master of Business Administration

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Grice ZRIGG Group 8 - GaMBA01.M05

CHAPTER I: THEORY 1.1 Concept

There are many different definitions of business strategy Many of them claim that business strategy is to do with art of implementation and monitor of business activities in order to achieve long-term goals of a business organization Here are

some:

According to Alfred Chandler (1962), strategy is the “determination of the basic long term goals and objectives, and the adoption of courses of action and the allocation of

resources necessary for carrying out goals ”

“Corporate strategy is the pattern of decisions in a company that determines and

reveals its objectives, purposes, or goals, produces the principal policies and plans

for achieving those goals, and defines the range of business the company is to

pursue, the kind of economic and human organization it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its

shareholders, employees, customers, and communities.” (Andrews, 1980)

“Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil

stakeholder expectations” (Johnson and Scholes, 1992)

Bateman and Zeithaml pay attention to the psychological context of strategic decision making, to its incremental nature, the role of historical antecedents and

individual biography, and the extent of convergence between personal and

organizational goals (1989)

In general, the definitions of strategy include the following features: 1 Clearly developmental goals measures in each periods

2 Strategic directions which guide the activities of the business organization

and ensure the success of the organization in the constantly changing

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Grigcs) Group 8 - GaMBA01.M05

environment

3 Mobilization of all the resources of the business organization and utilization in the most effective way both in the medium and long term and grasp of

opportunities in order to become more competitive and successful

4 Business strategy should be built with the philosophy that enables bold steps

which enhance success in the business environment

5 Business strategy should be built for a long period rather than short term

(e.g often 3-10 years at least)

Business strategy helps the business organization to:

1 realize clearly the goals and objectives in doing business

2 seize the business opportunities and make the best use of those opportunities

to actively overcome threats and difficulties in the business environment 3 increase the effectiveness of the use of the business’s resources with a view

to ensuring sustainable long-term development of the business organization

4 create solid bases on which business policies and decisions are made so that the business organization can survive and develop in the competitive and constantly changing environment

1.2 Stages in strategy establishment

According to Fred R David, strategy management includes the following three stages:

- Strategy formulation

- Strategy implementation

- Evaluation of the implementation of the strategy

Stage 1: Strategy formulation

In this stage, the business organization has to establish the business goals and

objectives, to examine the strengths and weaknesses, opportunities and threats that

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GRIGG Group 8 - GaMBA01.M05

the organization has to encounter Based on the analysis of the strengths, weaknesses, opportunities and threats, the business organization can set up its long- term goals and measures to achieve those goals, select its strategy and work out alternative strategies More specifically, the business organization has to consider the following issues: what to penetrate, what to skip, how to allocate resources, expand operations or diversify, enter international markets, merge or form joint

venture, avoidance of hostile takeover, etc

Stage 2: Implementation of strategy

This second stage can also be referred to as action stage of strategic

management Four activities often carried out in this stage is: (1) set up annual

goals, (2) make policies, (3) motivate employees and (4) allocate resources This

Stage is most difficult It is to do with the mobilization of human resources (managers and other staff) and other resources to carry out measures to achieve the

goals In this regard, interpersonal skills and consensus on pursuing goals are

critical

Stage 3: Evaluation

This last stage in the process often includes the following activities: (1) review the bases for the present strategy which includes internal review and

external review, (2) measure the achievement of the goals and objectives or

performance measurement and (3) make adjustments to pave the way for sustainable future development or corrective action

This process is of great importance because present success does not means the business organization will continue success in the future So it is important for the business organization to evaluate the present success comprehensively and to learn lessons from the current success and failure so that it can succeed in the

future It is also important for the organization to know that success creates new and different problems and thus complacency will lead to demise

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z GRIGG UNIVERSITY Group 8 - GaMBA01.M05 Process of strategy development Feedback Ỷ | |

External audit Set up long- | | Set up :

term goals ‘| annual goals

Ậ ị a

A '

Ỷ ! |

Identif _ y ¥ ' ‘ : Measure

current Finalize the ; Allocation | : led

missions ảnd —> business : ' of ' ðÌ evaluate

ar goals resources | ¡ Í performa visions ' ' ' ‘ nce 7 ' ' Ỷ ' Internal audit Ỷ Ỷ ' Choose the | | appropriate Set up ' strategies policies Ầ Feedback

Formulate | Carry out Evaluate 4 strategy | strategy | strategy

Figure I-1: Comprehensive model of strategy management

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GRIGG Group 8 - GaMBA01.M05

Because the focus of this paper is placed on the establishment of the

strategy, the authors will concentrate on the period of planning the strategy

1.3 Analysis of the working environment of the business organization

In order to establish the strategy for the business organization, it is necessary for the organization to consider all the factors that can exert influences on the operation of the organization In this regard, it is important to focus on external factors (e.g general circumstances, the field in which the organization is operating,

competitors) and internal factors (e.g the organization history, staff, etc.)

The relationships between the factors are presented in the following figure:

Figure |—- 2: Model of the relations between business organization and external and internal factors

CG Global Advanced Master of Business Administration

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The above model shows us the influence of the external and internal factors exert

on the operation of the business organization 1.3.1 Analysis of external environment

General environment:

The influence of the demographic environment:

Demography in the macroscopic environment has a connection with: Population; Structure of age; Distribution of geography; Ethnic Community; Distribution of

income

The influence of the economic environment:

The condition of macroscopic economic environment determines the wholesome and prosperousness of the economy It also has an effect on businesses and industries Economic environment defines the essence as well as orientation of

economy in which buisiness operates The influences of economy on a company can

make a change in making value and its income

Here are four important factors of macro-economic environment:

e =Rate of growth of economy,

e lnterest,

e Exchange rate,

se —_ Rate of inflation

The influences of polical and legal environment:

The political and legal factors also have a considerable effect on opportunities and

threats from the environment such as: The related and new policies of the government, Law, Industries the organization chooses to operate in, the fields in

which the managing policies of the State can influence on the orgnainzation’s

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activities and profits

On global scale, companies have to face a series of noticeable matters about politics

and law as: Trade policies, Traditional barriers of protection set up by different

countries

The influences of cultural and social environment:

Social attitude and cultural Vatue create Social foundation, Changes, Technical conditions, Political-Law, Economy and Demography The social change also creates opportunities and threats

The influence of technnonogical environment:

Technology is a very active factor It is changeable For this reason,

technology brings businesses many oppotunies as well as threats It is the fact that few industry and business do not use or do not depend on Technology It is sure that a lot of advanced technology will be invented and come out into society This creates chances or threats for businesses and industries The development of the

new technology can make a new market and as multiply many kinds of new

products as a result Also, new technology can create a change in competitive relationships in industries and make the existing products become backward and their quality does not meet requirement of society Changing in technology

influences on many parts of society

Technology includes the activities which are related to creatation of new knowledge,

application that new knowledge in creating: new products, processes and new materials In short, Changing technology includes creativeness and extermination, opportunities and theats Changing technology can have an effect on the height of

the barrier and reorient the structure of industries at the root

The global environment:

Global markets, existing markets which are changing, important international —

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Grigcd Group 8 - GaMBA01.M05

political events, the institutional particularities and culture of global market, globalization of market creates both opportunities and threats, therefore should be

aware of the different particularities in culture, society and institution of global

markets

Analysis of industry environment and competitive environment

The analysis of industry environment is very important to external environment analysis Here we will present Porter’s five forces model to analyse:

Figure 1- 3 : Porter’s Five Forces Model

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Rivalry among existing competitors in the industry

Industry consists of a group of companies which supply same or alternative

products or services

Pressure from competitors should be taken into consideration and analyzed carefully because it can directly threatens the existing and development of all businesses

operating in the same industry The following factors affect the level of

competitiveness of companies: number of competitors, degree of competitiveness, the growth rate of the industry, differences in products and services provided, diversity

Threats of potential entrants:

According to M-Porter, the potential competitors are businesses which have not

appeared yet but will influence on industry in the future Whether there are more or less competitors and how much the competitors influence, the industry depends on

the following factors: industry attractiveness and the barriers when joining the industry The more competitors, the more competitive and the less profits the

companies in the industry gain

The entry of new competitors depends on the industry attractiveness The

attractiveness itself depends on economic environment and the “future” of the industry, whether it can be profitable in the future and how profitable it is

The entry of new competitors also depends on barriers to entry The more barriers, the less competitors and vice versa

Joe Bain (1956) claims that three factors that can influence a company’s entry to

a industry: initial capital requirements, threat of price cutting by established firms, and product differentiation

Bargaining power of buyers

Buyer groups are likely to powerful if: Buyers are concentrated or purchases are

large relative to seller's sales: Purchase accounts for a significant fraction of

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supplier’s sales; Products are undifferentiated; Buyers face few switching costs; Buyer’s industry earns low profits: Buyer presents a credible threat of backward integration; Product unimportant to quality; Buyer has full information And buyers often compete with the supplying industry by: bargaining down prices, forcing higher quality and playing firms off of each other

Bargaining power of suppliers

Suppliers are likely to be powerful if: Supplier industry is dominated by a few firms; Suppliers’ products have few substitutes; Buyer is not an important customer to supplier; Supplier’s product is an important input to buyers’ product; Suppliers’ products are differentiated; Suppliers’ products have high switching cost; Supplier poses credible threat of forward integration And suppliers exert power in the industry by: threatening to raise or to reduce quality Powerful suppliers can

squeeze industry profitability if firms are unable to recover cost increases

Threat of substitute products or services

This is to do with products with similar function that buyers can choose Clearly, more substitute products can limit the prices that firms can charge Competiveness is high when the relative price of substitute products declines, consumers’ switching costs decline and competitors plan to increase market

penetration or production capacity

1.3.2 Analysis of internal environment

Studying the internal environment helps businesses to define what they can do

Businesses can create good value for themselves and expoilt resources effectively

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Human resource plays an important role in success of business For example, a company has an excellent strategy but its staff do not work effectively, they can not carry out the strategy successfully and thus the company can not become profitable and successful So businesses should prepare a good human resource in order to achieve the targets set up

Financial resource:

Financi! condition is often considered to be the best method of evaluating value of competitive position It is also the best condition to attract investors

Analyzing financial index is the most popular method to define the strength

and the weakness of organization about business finance

Facilities and Equipment:

Equipment and technology help business to raise the ability of competition However, investing on equipment requires a careful calculation when deciding to

invest

Some other resources of business:

It depends on each business industry Each business can consider some factors in

internal business which affect the business result

1.4 Selection of strategy for business

1.4.1 SWOT Matrix

SWOT Analysis is to analyze the outside factors which businesses have to

face (Opportunities and Threats) as well as the internal factors of business (Strengths and weaknesses) This is a hard job which requires plenty of time, labour,

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expenditure, ability to collect information, analyze and deal with it in the most

effective way

A business organization has to identify opportunities and theats by analyzing data in the following areas: Economy, Finance, Politics, Law, Society and competition at the markets where businesses operate or intend to join in Opportunities may include potentiality of developing market, lack of markets, being located near to material resource or cheap and skilled labour resource Threats may include the limit of market, more and more merciless competition, changes in strategy, politic unstablility in key markets or the development of new technique which makes existing equipment and facilities backward

It is necessary for the business organization to analyse the internal factors including strengths and weaknesses, for example skills, resources, technology, trademarks,

excellent managers and other advantages the organization has over its competitors so that it can build a good image in the public and important or potential markets

The weakness of business is shown by means of defects, weakness or skill, resource or the factors which limit ability of competition of business They are uneffective distribution system, un-well labour relationship, shortage of experienced international managers or backward products in comparision with the competitor

SWOT is the abbreviation of: Strengths - S Weaknesses - W Opportunities -O Threats - T

SWOT Matrix helps us to develop 4 types of strategy:

e SO — strength— opportunities strategies: Use inner strength to make full use of the outside opportunities

e WO- weakness— opportunities strategies: Improving the inner weakness in order to make full use of the outside opportunities

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e ST- strength— threatens strategies: Use strengths to avoid or reduce the effects of outside threatens

e WI- Weakness - Threats strategies: Improving the inside weakness to

avoid or reduce the influence of outside threats SWOT Model Opportunities (O) Threatens (T) aD S+T Use S to make full use | Use S to limit/avoid T of O Opportunities (S) W+O w+T Weaknesses (W) — O to cover with | Overcome W to limit T Overcome W to make full use of O

Figure 1—- 4: SWOT Model

The result of analysis process of SWOT should be ensured to be concrete,

accurate, and satisfactory as business will use that result to develop the next actions: establish strategy, strategic target, strategy and concrete system to control strategy:

Strategies are considered to be effective when they can make full use of outside O and inside O and inside S as well as neutralize outside dangers, limit or overcome

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IFE Matrix (FE — Internal factors environment)

IFE Matrix summarizes and evaluates the important strengths and weaknesses of the functional marketing part

IE Matrix is developed in 5 steps: Step 1: Key internal factors

Conduct internal audit and identify both strengths and weaknesses in all

business areas Jt is suggested 10 to 20 internal factors be identified, but the more, the better The number of factors has no effect on the range of total

weighted scores because the weights always sum to 1.0, but it helps to diminish estimate errors resulting from subjective ratings First, list strengths

and then weaknesses Step 2: Weights

Having identified strengths and weaknesses, the core of the IFE matrix, assign a weight that ranges from 0.00 (unimportant) to 1.00 (very important)

to each factor The weight assigned to a given factor indicates the relative importance of the factor Zero means not important One indicates very important The weight assigned to a given factor indicates the relative

importance of the factor to being successful in the firm's industry Step 3: Rating

Assign a | to X rating to each factor The rating scale can be per preference Practitioners usually use rating on the scale from 1 to 4 Rating captures whether the factor represents a major weakness (rating = 1), a minor

weakness (rating = 2), a minor strength (rating = 3), or a major strength (rating = 4) If the rating scale | to 4 is used, then strengths must receive a 4 or 3 rating and weaknesses must receive a | or 2 rating

Step 4: Multiply

Now, multiply each factor's weight by its rating and we will have a weighted

score for each factor

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Step 3: Sum

The last step in constructing the IFE matrix is to sum the weighted scores for each factor This provides the total weighted score for the business

No matter how many internal factors there are, the highest weighted score is 4, the lowest score is 1.0 and the average score is 2.5 If the total weighted score is bigger

than 2.5 then it means that the business has a strong internal organization If the

total score is smaller than 2,5, it means that the business is weak

EFE Matrix (EFE — External factors environment)

External factors evaluation helps us summarize and quantify the influences

of environmental factors on the business organization

Developing an EFE matrix is an intuitive process which resembles the way of creating the IFE matrix The EFE matrix process uses the same five steps as the

IFE matrix

Step 1: Key internal factors

Conduct internal audit and identify both strengths and weaknesses in all business areas It is suggested 10 to 20 internal factors be identified, but the more, the better The number of factors has no effect on the range of total weighted scores because the weights always sum to 1.0, but it helps to

diminish estimate errors resulting from subjective ratings First, list strengths and then weaknesses

Step 2: Weights

Having identified strengths and weaknesses, the core of the IFE matrix,

assign a weight that ranges from 0.00 (unimportant) to 1.00 (very important)

to each factor The weight assigned to a given factor indicates the relative

importance of the factor Zero means not important One indicates very important The weight assigned to a given factor indicates the relative importance of the factor to being successful in the firm's industry

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Step 3: Rating

Assign a | to X rating to each factor The rating scale can be per preference Practitioners usually use rating on the scale from | to 4 Rating captures whether the factor represents a major weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a major strength (rating = 4) If the rating scale | to 4 is used, then strengths must receive a 4 or 3 rating and weaknesses must receive a | or 2 rating

Step 4: Multiply

Now multiply each factor's weight by its rating and we will have a weighted

score for each factor

Step 5: Sum

The last step in constructing the IFE matrix is to sum the weighted scores for

each factor This provides the total weighted score for the business

No matter how many external factors there are, the highest weighted score is 4, the

lowest score is 1.0 and the average score is 2.5 If the total weighted score is 4, then

it means that the business makes the best use of external opportunities and

minimizes its threats IE Matrix:

Internal-External Matrix (IE Matrix) is built based on the 2 basic aspects:

Total weighted score of IFE matrix Total weighted score of EFE matrix

The IE Matrix analyses a business organization as follows

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POTAL WEIGHTED SCORE OF IFE MATRIX

Strong Average Weak 3,00 to 4,00 1,00 to 1,99 eb 2,00 to 2,99 WEIGHTED SCORE OF EFE MATRIX High 3,00 to 4,00 Average 2,00 to 2,99 Low 1,00 to 1,99

Figure 1-5: Model of IFE Matrix

- Way of reading matrix:

e Total weighted score from 1,00 to 1,99: Shows the weakness

e Total weighted score from 2,00 to 2,99: Average e Total weighted score from 3,00 to 400: Strong

- The IE matrix can be divided into three major regions that have different strategy implications

e Growth and Build (The yellow cells — I, Il, 1V): Cells I, I, and IV suggest ‘the grow and build strategy This means intensive and aggressive tactical strategies Your strategies should focus on market penetration, market

levelo pment, and product development From the operational perspectIve,

1 backward integration, forward integration, and horizontal integration

should also be considered

e Told and maintain (Vhe green cells — IH, V, VI): Cells I, V, and VII

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suggest the hold and maintain strategy In this case, the tactical strategies should focus on market penetration and product development

Harvest or divest: (Vhe red cells — VI, VIII, EX): Cells VI, VIII, and LX are

characterized with the harvest or divest strategy If costs for rejuvenating the business are low, then it should be attempted to revitalize the business In other cases, aggressive cost management is a way to play the end garne

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CHAPTER 2:

ANALYSIS AND EVALUATION OF THE OPERATION OF THE NATIONAL INSTITUTE OF INFECTIOUS AND TROPICAL DISEASES

2.1 General introduction to the institute

2.1.1 History

The National Hospital for Tropica! and Infectious Diseases was formerly a department of Cong Vong Hospital (built in 1911 — now Bach Mai Hospital) Under

the domination of the French colonial, this hospital treated the popular infectious

diseases such as tuberculosis, dysentery, typhoid, fever In the war, infectious department of Bach Mai Hospital treated patients and also trained staffs and built a

network of specialized doctors

On November 11'" 1989, Ministry of Public Health issued the decision number 705/BY T-QD which separated the infectious department of Bach Mai hospital, which

paves the way for the later establishment of the National Institute of Infectious and Tropical Diseases (NIITD) However, the institute then still operated under the

control of Bach Mai Hospital

NIITD is a good place for treatment of serious infectious diseases all over the country, expecially the dangerous infectious diseases such as: HIV/AIDS,SARS, Bird

flu It also instructs related departments of hospital in treating the infectious

diseases and dealt with epidemic when they happens Annually, the Ministry of health and hospital and other hospitals together successfully control dangerous epidemic such as fever, tuberculosis, dysentery, typhoid, SARS, A-type flu, HSN1 and other dangerous diseases The hospital always completes its mission and gain big achievement It is also awarded with competitive/emulate titles such as the title of

labour heros in the new periods

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issued the decision number 487/QD-TTg on establishing the National Institute of

Infectious and Tropical Diseases

On the 1° of July 2006, the National Institute of Infectious and Tropical Diseases starts to operate independently, out of the control of Bach Mai Hospital and takes full responsibility of its operation and professional knowledge

Business name: Viện Các bệnh Truyền nhiễm và Nhiệt đới Quốc gia International name: National Institute of Infectious and Tropical Diseases Name in Abbreviation: NIITD

Address: 78 — Giai Phong road — Dong Da district - HN

Tel: +84.4.35763023 Fax: +84.4.5764358 2.1.2 The organization of the hospital

- Board of Directors: 3 people

Director

Vice Director (in charge of profession)

Vice Director, (in charge of logistic and paraclinic aspects)

The hospital includes:

9 functional rooms , 5 clinical departments and Paraclinical Here is the current chart of organization of NIITD:

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⁄ GRIGG UNIVERSITY Group 8 - GaMBA01.M05 BOARD OF Ñ DIRECTORS - The division of Hanoi Medical University - Organizations of Communist Party, Youth and_ Trade Unions Ỳ v Functional Department - General Department - Department of Training and Sicentific Research - Department for Professtional Guidance - Deparment of Administration - Department of Finance - Department of Logistics - Department of Materials and Medical Equipments - Department of Nursing Clinical Department - Department of Examination - Intensive Care Unit - Department of Hepatitis

- Department of General Infections

- Department of Viral and Parasitic

Diseases

Paraclinical Departments

- Department of Imaging

- Department of Pharmacy

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Group 8 - GaMBA01.M05 2.1.3 Number of wards Table 2-1: Description of wards Year Number of Actual In percentage | Compared to 2005 wards number of Gesigned | wards ii use | 2005 120 121 100% 0% 2006 120 148 123% _ 23% 2007 140 153 101% _27% ee Tr TT an ge 2009 170 252 148% — 200%

Source: 2007,2008,2009 Reports — NIITD

Comparing the number of wards according to the Ministry of Health’s quota with the statistical of numbers of wards in Figures 2-1, we can see a big increase in

the frequency of wards usage; especcially in 2009, since NIITD still has been an

affiliate of BachMai Hospital, the wards were used twofold 2.2

2.2.1 General environment

Demographic

Analysis of External Environment

The population of Vietnam is now about 86 million and there is much more people living in cities People who live in cities now account for about 29,6% of the

total population, increasing by 3,4%/year: and only 4%/year increase in the

countryside According to the last population census and population health

assessment in 2008, there is a big gap between the health indices of upper-income

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and lower-income people and those in different parts of the country ( Source : VnEconomy ) Opportunities: The increase in population may increase the need for medical check-ups and health protection Threats:

Very poor living habits of people living in the country with very poor hygiene may create environment for diseases to outbreak It is worth noting that up to more than 70% of total population live in the country

There is a big gap between people in cities and those in the countryside

Economic

The program of hunger elimination and poverty alleviation by the government of Vietnam has brought about positive changes in the country’s economy Many people have escaped the circle of hunger and poverty Some even become rich

Opportunities:

More rich people means that more people will be able to take care of their health In other words, there is an increase in the demand for health services Clearly, this is an opportunities for the hospital as a “supplier” of health services

Threats:

The current inflation increases the costs and expenses in the health care services

and negatively affects the lives of the medical staff and at the same time may indirectly reduce the investment in the health care services

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Political-Legal

The government of Vietnam and the Ministry of Health have made clear that they

pay much attention to the public health care by issuing a series of decrees and decisions (46/NQ-TW, 43/ND-CP) which favor medical institutions and their activities More specifically, the decree No 43/ND-CP give the Institute a more free hand in its operation by giving it a “semi-autonomy” in its financiat poticy It is also worth noticing that the health care area of tropical and infectious diseases receive special attention from the government and the ministry The government annually increases its investment in this area One more thing that should be noted here is that

the government now allows different sectors of the society to invest and participate

in the health care services activities

Opportunities

The government has made clear policies on the general area of health care and

the specific area of infectious diseases And this is the time for the institute to make the best use of those policies to develop The hospital is now partially regarded as a business organization operating in the market economny rather than a hospital of the

command economy which “purely” devotes to the public benefits Now there is no

limitation in the scope of the operation of the hospital So it can take the chance to

open up new health care services New policies from the government now allow the

hospital to source different funds from different parts of the society (e.g.: from private organizations, etc.) in order to enlarge the hospital and and its operation

Threats:

Together with the opportunities, go many threats If the hospital can not take those opportunities mentioned above They will surely become threats For example, now the government allows many sectors to invest in the area of health care This

means that the hospital now has more competitors If the hospital can not make the

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best use of its strengths and opportunities to develop, many of its competitors will

move forward and push it behind This is very threatening

Social-Cultural

Working in the health care sector is generally respected in Vietnam Many peeple believe that medical jobs are to cure people and therefore doctors are “the

salt cf the earth” Many people in Vietnam do not have a habbit of going to

hospitals for regular check-ups or many do not participate in the service of health insurance Many people do not have a good attitude toward protecting the environment This may increase the pollution of the environment and thus cause diseases Many do not pay attention to personal and social hygiene and thus

altogether leads to the fact that many people in Vietnam are infected with infectious

diseases

Opportunities

More people will go to hospitals for health care services

Threats:

More pressure and heavy workload may lower the quality of services For example, many staff may develop negative attitude toward patients and _ their

relatives because of being overloaded

The treatment of many poor patients without health insurance may be very costly because some of them can not pay for the service they receive

Technological

Now Vietnam has enjoyed many achievements in the area of science and

technology Undoubtedly, information science and Internet have greatly helped ease

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the work of the hospital In addition, a lot of modern equipment has helped doctors deal with many serious diseases effectively and helped cure many patients

Opportunities:

The hospital may receive more modern equipment in the future that may help the staff of the hospital to work more easily and more effectively

Threats:

Many staff worry that they can not keep up with the time and can not use the modern equipment because they are “outdated” This may also cause a stress for them and may result in the laid-off of some staff

Many pieces of equipment become out of date quickly and may cause a big

waste if the hospital makes a wrong “calculation” in purchasing them

Global

Now in the world, the outbreak and spread of infectious diseases have become

very complicated Recently, many new dangerous infectious diseases outbreak and

spread quickly, for example, HIV/AIDS, SARS, HIN1, H5N1, etc These diseases

spread very quickly and do not respect national boundary This situation requires a

global effort Clearly, it is time for an international cooperation in the fight against

infectious diseases

Opportunities:

The hospital receives investment and funds from many countries and international organizations in the fight against infectious diseases The hospital has more chances to learn about the ways other countries have dealt with infectious diseases in their

country The hospital has received support from other countries and organizations to

do research and develop different types of vaccines against viruses and bacteria

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Climate change:

Climate change clearly affects Vietnam as coastal country According to the reports of the Ministry of Natural Resources and Environment, the degree has increased by about 0.7° C and the sea level has increased by about 20cm and flood many coastal parts of Vietnam

Global warming causes ice melting and increases sea levels and floods many parts of the world

Clearly the changes in the climate such as floods pollute the environment and

increases the chances of developing new diseases, particularly infectious diseases

2.2.2 Industry environment (Medical environment)

Vietnam is a tropical country, often wet and warm This provides favorable

conditions for infectious diseases to occur and spread

In Vietnam now about 12-20% of the population is infected with hepatitis type

B and about 42,000 have been killed by the disease According to the report on HIV/AIDS in 2008, there were more than 135,171 people who had HIV, of which

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More recently, many other dangerous infectious diseases outbroke and spread

quickly in Vietnam such as SARS, HIN1, HSN1 It is feared that these types of flu

may cause epidemic in the future and kill thousands or even millions of people

2.2.3 Competitors’ environment

t is worth noting that there are many big hospitals in Vietnam which have been

operating for years and become well-known nationwide In addition, many private

hospitals have been set up to meet the increasing demands in the area of health care

However, because there is no hospital which solely focuses on fighting infectious and tropical diseases, these diseases spread quickly and threatened the lives of many

people in Vietnam Therefore, there is a need for a leading organization in the fight

against infectious and tropical diseases

Table 2-2 — Comparison of comparativeness and marketshare in 2008

Hospital Number of staff Number of wards specializing in the used for infectious

area of infectious and disaeses tropical diseases

Bach Mai Hospital 36 30

Saint Paul Hospital 46 40

Dong Da Hospital 32 30

Thanh Nhan Hospital 40 30

NHTD 200 158

Source: 2008 Reports — NIITD, Bach Mai Hospital, Dong Da Hospital, Thanh Nhan Hospital,

Saint Paul Hospital

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