GRIGGS UNIVERSITY
GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM
CAPSTONE PROJECT REPORT
STRATEGIC BUSINESS DEVELOPMENT | OF PETROSETCO VUNG TAU GENERAL
SERVICES JOINT STOCK COMPANY (PETROSETCO VUNG TAU)
PERIOD 2010 - 2015 Group Number: 3
Student’s name:
Bui Thi Minh Chien Truong Minh Chien Vo Thi Thuy Huong Pham Ke Nghiep Pham Huu Tri
Ho Chi Minh City, 2011
Trang 2Thank you!
^^
First of all Group 3 sincerely to thank the GaMBA 01 C02 program, the teachers, the monitors, the supervisors has been communicating and teaching all the most valuable knowledge for us duration the course — Global Advanced Master of Business
Administration program
Secondly we would like to say that: the research was completed by the Group 3's working, However, due to time limited time, the limited knowledge, so the research haven't good as much as your respect We would like to receive the comments of the teachers, lecturers and other suggestions to make this completely
Last of all we would like to thanks you very much and give the best wishes for all of you — who have been enthusiastic to asstst us in the process of implementing this course
Trang 3Petrosetco Vũng Tàu APPENDIX APPENDIX Q0 221cc | Ji N.(0))00000000.a l Ï: TOĐIC `S TCASONT 020 2021212121 121 1212212 1n HH HH HH HH l 2 Research purDOSeS c2 1 HH HH HH HH HH 2 3 The limitations of the Assignmen ác ch 2 4 The structure Of assignm€nIs - c2 Hee 2
CHAPTER I: THEORY OF STRATEGIC MANAGEMENT 2 4
[ Defining STRATEGY - 12s 1 E121 11121 tr HH 4
If STRATEGIC PLANNING 0 n2 21 1 1 Hee +
LH STRATEGIC MANAGEMENT PROCESS Hee 5
3.1 Identify tasks, objectives and current strategy of the Or8anization 7 3.2 Review Of business tasks .ccccccccscsssssessessessssssssssessessessesuesessessseseessetervereecescecece Z
3.3 Environmental studi€s :- 5: tt 11111 1111111121 E1 7
3.3.1 Environment for micro ent€rpris€s - s 5s s St St 2522515111111 7
3.3.2 Macro environment of business - s5 - c n2 SE SnEEnnnnnnH 10
IV ANALYSING PROCESS AND STRATEGIC CHOICES 32s 2 15 4.1 Establish long-term goals .c.cccccsscsssssessesssssesssssesvesessessessessesssssssesesereaveceveece, 15
4.2 The process of formation and strategic ChOiCES .ceccccccscsscsssssesseseeceesceseccesecsce, 15
4.2.1 Stage Ï: ÏnpU 52s t2 E221 112112 11t re 15
4.2.2 Stage 2: COMBINE oo cccccccscssssesssessesseasseassueessseatesssssissstesesteseateececeecececeece 15 4.2.3 Stage 3: DeCisiOn cecccccccccsssessssssssvssvsessssrsetsseatesssssessstereaveseateeseceecececeeceee 20
CHAPTER II: REAL SITUATION ANALYSIS OF PETROSETCO VUNG
TAU GENERAL SERVICES JOIN STOCK COMPANY 2n 23
I ABOUT PETROSETCO VUNG TAU GENERAL SERVICES JOIN
STOCK COMPANY c2 2 221211211212 treo 23
|.1 General information about Petrosetco Vung Tau General Join Stock
COOTER, mca sungsnntgtontdESEUBMB Soclsecseccsorreto rụng Hy hy 05050050 THE001000 1815016 SE TT 23 1.2 About the main business activities of the Company nhe 23 J3 About the catering S€TVICG 5c cs t1 2E 11 12 TH 24 JI.‡ Vision - Mission - Core Values - Business Philosophy cccccccccse, 25 1.3 Organizational structure and apparatus c.cccccescssccssessessescesessesseeseeseevecceeeeee.25
a GaMBA01.C02.G.3
Trang 4` JareAeaTe = 4
Griccd) Petrosetco Ving Tau
Il REAL SITUATION ANALYSIS OF BUSINESS ACTIVITIES OF
PETROSETCO VUNGTAU (INTERNAL FACTORS) 0o ccccccccccccccsecceseeeeeees 27
2.1 Current situation Services Operations of Vung Tau Petrosetco Zi 3.1.1 Offshore Catering S€TVIC€S c1 ST TH TT 27 2.1.2 Onshore Catering S€TVICS c cc TH HT TT TH H nhe 30 3.2 Stuations Catering service of Petrosetco Vung Tau c c2 tt nen ccec, 30 2.2.1 Cartering Service providers on the rig -cccccsscsxsssa "1M 2.2.2 The services of goods supplied for ServiCeS ccccccccccsccssescssesseseescsssseseeseesees 32 2.2.3 Situations Onshore Services c.cccccccccsssesesssssssescssesssesseseescsevstsssesvatsecaeseses 33 2.3 The status of human resource manageMeNt .0 cccccccsesesesceceseseeceeveseevesseseees 34 2.4 Analysis facilities of Petrosetco Vung Tau cccccccccccscscscssesesescseesessstsvevevseseseees 37 2.5 Analysis of quality management systems and processes .ccccsccssssseseseeeeeevees 37 2.6 Analysis and market share brand .c cccccccceseesseseesesseseesecsecsecsessvsseseeseesceaes 38 2.7 Analysis System Provider .ccccccccccscccscssscssesessececesesvscsesscsstseescsesatssseeecessevaeseees 39 2.8 Analyzing business results and financial condition from 2008 to 2010 4] 2.9 Internal factors evaluation matrix (IFE Matrix) 0.ccccccccsccsscscssceccsceccssscesseececees 44 2.10 Real Situation analysis of external Factor affecting Petrosetco Vung Tau 45 2.10.1 Analysis of impact factor .c.ccccccccccccccsescsssescessvecseseeerscsecscsssseavavavevecseseseens 45 2.10.2 Competitor analysis .ccccccccccccsescescscssescscessessevsessesecsecsecsesecacsavavseeacsaseeees 47 CHAPTER III : STRATEGIC PLANNING AND IMPLEMENTATION OF STRATEGIC SOLUTIONS CORPORATION OF GENERAL SERVICES
PETROLEUM VUNGTAU PERIOD 2011 -2015 22 22s cv S2 E23 sE sec 53
I STRATEGIC PLANNING .- G5 n1 T HH TT Hee 53
BMv) 53 1.2 Planning Business activity in 2011 - 2015 o.ccecceeccesseceesesessssescsesssesatseesees 53 1.3 The main value need to be achieved in business operations .cccccccsesseseeeees 54 1.3.1 Create value for shareholders ccccccccccccescssessssesescsceesseecsetacseeeevevseeesseees 54
1.3.2 Create value for CUStOMETS c.ccccccccescscscscseseseseecevsesceecatstsesacatsssestasseavecees 54
1.3.3 Creating value for employees .c.ccccccccccsessscssecesescsceeesssecsesscsesevseesevevsceseecens 55 1.3.4 Create value ÍOT SOCI€TV - ác n1 TH TH TH TH TH TT TH HH HH nhe, 55
Il ANALYSIS AND CHOICE OF STATEGY IN PERIOD 2011 - 2015 56
2.1 Using analytical tools to devise strategies .ccccccscsecseseeeeesesvseseseseeseseseeeceses56 2.1.1 Matrix Strengths - Weaknesses - Opportunities - Threats (SWOT) .0.0 56 2.1.2 Matrix strategic position and Action Evaluation (SPACE) cccccccccccscsecceceeeees 60
Trang 5Petrosetco Vũng Tàu
2.1.3 Main SITaLCĐIC HAtTÌN 222525211 1211 HH HH HH HH nhe 62
2.1.4 Enternal - External matrix (IE) 2 22 nhe " 64
3.2 Preliminary Selection for the Strat€BI€S c2 nen nhe 65 2.3 Stratcgy S€l€CLION c2 2.2221 211212 nH He 66 2.4 CONCÏUSION 011 120101112 12111 111111 1H11 HH HH HH na 70 2.‡.1 Penetration and Exploitation existing markKet strateBY cccccccccc 71 2.4.2 Development and expand Markets Strategy o cccccccscecseseseseseseseseseecevseeees 7Ì 2.4.3 Joint venture to develop StFat€ØY các tt 11 11H HH eeereeg 7]
lil SOLUTIONS BUSINESS IMPLEMENTATION STRATEGY /2
3.1 Construction standards to choose the sOlUtion .ccccccccesssscsssescscecsecscecevsveveceees Tả 3.2 Choice of solutions to implement the strategy .c.ccccccccseccececssesestecscecscesesseeee 72
3.2.1 Human resources Solutions .c.ccccccccecseseseseseevscsvecscsvsvsvacsvassescscssscsesesseveveveves 72
3.2.1.1 Solutions to build staff (key person) c.c.cccccccsccssssesesesescscscscscscssscsesvevevevees 72 3.2.1.2 Building reward — discipline regulations 0 0.c.c.ccccccccssessscsesescscscecseseeesees 76 3.2.2, Solutions to improve management and efficiency business growth 76 3.2.3 Market n0 on n6 êdddaaajiaiaaa 78 3.2.3.1 To study the characteristiCS Of CuStOIM€FS 22 S2 n2 S2 SE SE nret 78 3.2.3.2 Psychological clients Research .c.ccccccssecesesescsesesesecsvscseseescssscsssseesesees 78 3.2.3.3 Make Impressed 0.0 cccceccsesesecscssscessscssscscsessvevsvscaesesavacatsssavavssssesvevevevees 79 3.2.3.4 Creating good relationships 0.0 cccccccccssseceseessesesseseecacststseevscssseseseseeeens 79
3.2.3.5 Cooperative øgOOdWiÌÏ 5c: c2 tt T1 111111 1111111 tren 79
3.2.3.6 Research COMPetitOLs 2 cecccccccesssesssssssscscessecsesensessevsvavavavavavatacsvsvevevevees 79
3.2.4 Solutions for capital and financial performance .c.ccccccccsssescssssssescecsseseseees 80
Trang 6Jeo Eto a TSA
Griocs) Petrosetco Ving Tau
UNIVERSITY
LIST OF TABLES
CHAPTER I: THEORY OF STRATEGIC MANAGEMENT - 4 Table 1.1 Matrix assessment of internal ẾaCfOFS o- <5 5< 5< 5< se se sex 10 Table 1.2 Matrix assessment of external ẾaCfOFS .-.2- 5< 5< sec ssseseess 12
Table 1.3: Matrix image com petitÏOIn 5-5-5 5 <5 xe sec esesee 14
Table 1.4 SPACE miäFTX 5 G5 <5 55 E31 nh vn ng nexe 17 Table 1.5 Straf€BÏC€ 1T ÏX G5 G5 50093 vn ga 19 Table 1.6: Strategic planning matrix QSÌPÌM 5 G-SceSsseeseseesesee 21 CHAPTER II: REAL SITUATION ANALYSIS OF PETROSETCO VUNG TAU GENERAL SERVICES JOIN STOCK COMPANY .ccccccsscssssesseseeseesees 23 Table 2.1 Customers of Petrosetco Vung Tau .5-5 5< 5 5< << S< se esee 28 Table 2.2 Labour struecture (31/12/2001 ()) .- << <5 se Ss SSs SsSesssSssszss 34 Table 2.3 Degrree Of ÌaÌDOTF G5 << s85 E953 S9 S1 g g vesesee 34 Table 2.4 Working ag€ so HE HH ng nh ng ng se 35 Table 2.5 Market share competition was dominated from 2008-2010 39 Table 2.6: Suppliers sccsssssvsssenvensussassswssvess sxssvessdssereconsngreaceneonveneenoneuvsantonneanusannnsonvuneses 40 Table 2.7 Business results from 2008 — 2/0 1() 2 25-5 < << Ss se se sess2 41 Table 2.8: The ratio of fiscal 2009 and 2()110) 5-5-5 << se se se ssesesseee 42 Table 2.9 Internal factors evaluation I1AfFÏX - 5-5 5 5< 5< << se sessesesee 44 Table 2.10 External Factor Evaluation Matrix (EFE Matrix) 46 Table 2.11: Some key indicators of the OSC (2008 — 2010) -s-« 49 Table 2.12 Some key indicators of Getraco period (2008 — 2010) 50 Table 2.13 Competitive matrix of Petrosetco Vung Tau -5-5-< << 51 CHAPTER III : STRATEGIC PLANNING AND IMPLEMENTATION OF STRATEGIC SOLUTIONS CORPORATION OF GENERAL SERVICES
PETROLEUM VUNGTAU PERIOD 2011 -20015 - 5< << se ses£sses 53
Table 3.1 Five year 2011-2015 business plan of Petrosetco Vung Tau 53 Table 3.2 SWOT” AnnaÌÌySÌS 0 5-0 ĐH ng se esee 56 Table 3.3: The elements of the matrix SPACTE 5-5 5< << se ssessesesssse 60 Table 3.4 Main straf€giC IẪAfFÏX o- 5< 5 55 s1 SE esessssee 63 Table 3.5: The proposed strategies in each matfriX .- <5 5< ssesssse 65 Table 3.6 QSPM Matrix —Group of strategies for focused growth 66 Table 3.7 QSPM Matrix — Group of strategies for integrated growth 68
Trang 8GRIGG Petrosetco Vũng Tàu
UNIVERSIT v
LIST OF FIGURES, GRAPHS
CHAPTER I: THEORY OF STRATEGIC MANAGEMENT 4
Figure 1.1 Strategic planning đdiaØraIm - -o- 5 <5 <5 SA ssessese 4 Figure 1.2 Strategic management m0€Ì 5 2 5< 5< << SE ESessssesss 6 Figure 1.3 Diagram describing the enterprise value chain .-< se 7 Figure 1.4 The external environment affecting businesses 10 Figure 1.5: Competitive environment of Michael Porter - 5s sses I3
CHAPTER IT; REAL SITUATION ANALYSIS OF PETROSETCO VUNG
TAU GENERAL SERVICES JOIN STOCK COMPANY 5- 5 <scscs 23
Figure 2.1 Organizational chart of Petrosetco Vung Tau c2 26 Figure 2.2 Market share of catering companies in Ba Ria Vung Tau 48 CHAPTER III: STRATEGIC PLANNING AND IMPLEMENTATION OF STRATEGIC SOLUTIONS CORPORATION OF GENERAL SERVICES
PETROLEUM VUNGTAU PERIOD 2011 -2015 c.c.ccccscscscssssssssscsssceseceseccceees 53
Trang 9Some pictures of Petrosetco Vung Tau
Trang 10Food processing before cooking
Trang 11Checking the vegetable and fruit before loading in container send to the rig
Trang 12
7 a €3RIGGS UNIVERSITY Petrosetco Vũng Tàu
INTRODUCTION
1 Topic’s reason
Enterprises have to plan the business strategy in order to be successful in business They need a thorough understanding of the market to find out customer’s need Especially when Vietnam is one of the official members of the World Trade Organization, (WTO) Vietnamese companies need obey the market's mechanisms in organizing the business operation for instance: building their own appropriate Strategy for the business and ready to accept competition among rivals to increase the market share In order to win a larger market share and the growth of the business is continuously improve efficiently, it is imperative to build a business- Strategies appropriately, so the company can orient the operation according to their
setting-out business objectives
In case of Petrosetco Vung Tau General Services JS company operating in the field of catering service on the sea rigs (Catering Services) - an essential area and relates directly to health of Oil and Gas experts who are working in an especially environment as the sea rigs The exploration and exploitation activities of oil and gas are considered to be to develop continuously not only in the Ba Ria- Vung Tau province, but also in many internal-external areas
For nearly 30 years, despite of many achievements of Petrosetco Vung Tau in providing services that meets customer needs, it also have some shortcomings and inadequacies in operation and business activities due to the inappropriate strategies, such as: Marketing activities are not strong, staffs are not dynamic and the low-level competition, so providing Catering services is constantly attacked by competitors to dominate market, that leads to decrease business targets In this case, Catering operations have to confront many difficulties and challenges
All these reason above encourage group 3 to research the project: "Developing Business Strategies of the Petrosetco Vung Tau General Services Joint
GaMBA01.C02.G.3
Trang 13Griccd UNIVERSITY Petrosetco Ving Tau
Stock Company (Petrosetco Vung Tau) in period 2011 - 2015" in order to make MBAO1.C02 course Graduation Project
2 Research purpose
Based on the methods of economic analysis, the actual investigation, synthesis of relevant documents, and manipulating the basic theoretical knowledge - gained from previous courses and especially during time of learning MBAQ1.C02 about company strategy, business strategy marketing strategy branding strategy, human resource management strategy, and assess the actual business of the Company, the assignment include following purposes :
- To clarify the business environment in the life service field of the Petrosetco Vung Tau General Services Joint Stock Company to find strengths - weakness, build models and choose business strategies for Petrosetco Vung Tau The essay is also planning objectives and implementation of strategic solutions for next 5 years and proposing recommendations to PetroVietnam, the associated levels with the best policies for support Catering services of Petrosetco Vung Tau
3 The limitations of the Assignment
This study was completed by the hardworking of Group 3 However, because catering services at sea rigs is a specialized section, this essay can only be applied to companies operating in this area In addition, due to time as well as the limited researchers view, the data collection may be diverse and inevitable shortcomings Group 3 would like to receive the comments of the teachers, lecturers and other suggestions to make this completely
4 The Structure of Assignment Introduction
Chapter 1: THEORY OF STRATEGIC MANAGEMENT
Chapter 2: REAL SITUATION ANALYSIS OF PETROSETCO VUNGTAU GENERAL SERVICE JOIN STOCK COMPANY
GaMBA01.C02.G.3
CS Global Advanced AAASteE fo ess Administration
Trang 14
¬ - : oe,
Grid) Petrosetco VingTau
Chapter 3: STRATEGIC PLANNING AND IMPLEMENTATION OF STRATEGIC SOLUTIONS CORPORATION OF GENERAL SERVICES
Trang 15as oy
GRIGGS UNIVERSITY Petrosetco Ving Tau
CHAPTER I: THEORY OF STRATEGIC MANAGEMENT
I Defining STRATEGY:
The term “strategy” is widely used in business and life; so many different concepts are created by experts:
- According to Michael Porter, strategy is defined: * Unique competitive position of the enterprise:
* Compromise and the choice for competition:
* Other business activities;
* Gives customers a unique value mix
- Other scholars: strategy is a plan achieving the organization’s objectives - Although there are many views on the strategy, according to us strategy is a set of long-term basis objectives, which fit in the vision, the mission of the organization to achieve goals in the best way, so that we can increase the strengths and overcome weaknesses of the organization, welcome the opportunities, avoid or
minimize risks from external environment II STRATEGIC PLANNING:
As defined the strategy, we must consider the internal environment and external environment of enterprises, in order to determine:
- Strengths and weaknesses of the business, including capabilities and its core
values
- Opportunities and challenges in business section for enterprises such as opportunities, risks in technology, economic and law changes
Trang 16` ¬.-
Griccd) Petrosetco VingTau
Analysing the internal factors helps us understand the advantages, for example: what we can do better than competitor and what things we can improve, repair , so that we can find out our position in order to plan the strategy
Analysing the external factors affecting the business help us understand the operation of business- sector, such as which factors are affecting the market and the attractiveness Finally, we can learn how the factors affecting and affected by the business and competition
Il STRATEGIC MANAGEMENT PROCESS:
Strategic Management can be defined as an establishment of art and science,
implementation and evaluating decisions related functionally, it allows an organization to achieve those goals In this definition, strategic management focuses on integrating all the management, marketing, finance and accounting, manufacturing, research, development and information systems, business sectors in
one place to achieve the success of the organization
According to Fred R David, strategic management process includes three
stages: creation, implementation and evaluation
GaMBA01.C02.G.3
Trang 17Gricos) Petrosetco Ving Tau Feedback Ỉ T I I
Environmental studies Establish | || Set annual l
to identify long- Ị goals SE là I opportunities and term ' \ threats goals I I I I 4 4 } I | | I % fan vgŠ Measure
identify tasks, Review of I Distribution | 4
objectives and 1 business + of resources [+ and _ Ị LÍ evaluate current strategy tasks I I \ ¡ | Performanc I l 4 I ' 1 | ỶỲ I v I Internal controls to ` I I Selection Propose 1 identify the |_J | strategies | t] ' policies I strengths and \ i weaknesses l I I I I | I l ! | I | I | Feedback Creation Implement [ Assessme | ation | nt +
Figure 1.2 Strategic management model - Source: Fred R David
We will focus on analysing the strategic creation’s stage compared with two stages remaining (strategic implementation and evaluation strategies), because the core value of the research is to develop business strategies for companies
GaMBA01.C02.G.3
Trang 18` ¬
Gricad Petrosetco VũngTàu
3.1 Identify tasks, objectives and current strategy of the organization
This is a starting point in the strategic management because the current situation of the company can reduce some of the strategies and specific action Each
organization has the tasks, goals and strategies, even these factors are not set up or
Written out
3.2 Review of business tasks
The mission of business is to establish priorities, strategies, plans and allocation of work This is the starting point for setting up the schedule and Management structure This review allows Enterprises to outline the direction and set goals
3.3 Environmental studies
The environmental research focused on the identification and assessment of trends, events which overcome the control of company Environmental operation of the enterprise is divided into two categories: the macro environment and operational environment
3.3.1 Environment for micro enterprises
Trang 19` ¬.-
Griccs) UNIVERSITY Petrosetco VingTau
a) The basic operation: is physical activities that are related to physical creation, sale and delivery of products (actually added value) to customers as well
as the after- sale works
Internal logistics: is activities that includes receiving, storing and managing the inputs of the business such as: (1) To receive inputs (machinery, equipment,
materials), (2) Manage materials, (3) management of materials storage, (4)
Programming for media activities, (5) transportation plan, (6) Return of goods to the
supplier made to convert the input into product
Production: are all activities to convert inputs into final products such as: (1)
Operating machinery and equipment, (2) Packing and packaging, (3) Assembly, (4)
Storm equipment maintenance, (5) Check
External Logistics: are activities of the company to bring the product to customers, such as (1) Management of semi-finished products, (2) Storage of finished products, (3) operating distribution facilities, (4) The process of ordering and processing
orders
Marketing and sales: (1) Advertising, (2) Promotion, (3) Sales, (4) Select the distribution channels, (5) Establish the relationship between the distribution
channels
Services: (1) Installation (2) customer training, (3) Repair, (4) Settlement
requirements, customer complaint
b) Support activities: is the activity that supports the basic operation and supports each other Procurement, technology development and human resource management can support for the entire chain Infrastructure of the enterprise is not affiliated with a single major operation and only support for the entire value chain Shopping: buying all the inputs used in the value chain such as: (1) purchase of raw materials, (2) purchase of raw materials and energy, (3) purchase of machinery,
GaMBA01.C02.G.3
Trang 20& sas
Grlocd) UNIVE RSITY Petrosetco Ving Tau
laboratory equipment office equipment, premises, (4) Procurement management software, (6) supply sources management
Technology development: are the activities that relate to improve our products and processes of business activities
Human resources administration: including the three main activities:
- Attracting human resources: (1) work Analysis (2) human _ resource
planning, (3) Recruitment - Training and development - Maintain human resources
Infrastructure of the company: including activities such as general management,
planning, finance, accounting, legal support, relationships with government agencies to support the entire value chain
c) Internal factors evaluation matrix (IFE)
This matrix has summary function and evaluates the important strengths and weaknesses of function business parts IFE matrix is developed in five steps:
- Step |: List the critical success factors
- Step 2: Importance assigned by sorting from 0.0 (not important) to 1.0 (very important) for each element The total number of critical levels of 1.0 to
- Step 3: Classification from | to 4 for each element, lis the biggest weakness, 2 is the smallest weaknesses, 3 is the smallest strengths, 4 is the greatest strengths
- Step 4: Multiply the important level of each factor with its classification (= step 2 x step 3) to identify critical points for each variable
- Step 5: Plus a total score of the importance of each factor to determine the total number of important points for an organization
GaMBA01.C02.G.3
Trang 21Gn6o3)
The highest important total score is 4.0; least is 1.0; average is 2.5
Petrosetco VingTau
Total
scores are greater than 2.5 indicate the internal strength of the company, less than 2.5 indicates the weakness internal company
Table 1.1 Matrix assessment of internal factors The main internal factors The Important level | Classification | | Number of important points | | Total PT | | 1,00 3.3.2 Macro environment of business: Economic | Industry Environment — Threat of New Entrants Power of Suppliers Power of Buyers — intensity of Fivalry Environment Technological
Figure 1.4 The external environment affecting businesses - Source: Slide lecture
Strategic Management of Griggs University
CG Global Advanced \
Trang 22Griccd) Petrosetco Vũng Tàu
a) There is six major external forces affecting businesses:
Politics: is the politics of the country where the enterprise is operating tendency of changing policies and regulations of the host country, changing the law (tax law, business law, and land law), and policies to encourage investment in the regions, industries and fields The role of state-owned economy nationalizing
Economics: inflation, unemployment, GDP (adjusted for growth), the exchange rate (export problem), the interest rate (cost of capital), the psychology of foreign investment and domestic investment, economic downturn cyclical, and the price of basic raw materials: electricity, water, fuels the rate of consumption and Savings
Demographics: population size, age structure, geographic distribution, racial
diversity, income distribution
Culture, society: consumer and social trends, family structure, social- consumption habits, level of community awareness
Technology: scientific and technical qualified development in our industry sector, the introduction of new products base on new technology, new production methods base on savings (less labour), new management models
Global influence: important politics, economic world’s events, the changes
of new industrial countries, the difference from cultural characteristics and
institutions
b) External factors evaluation matrix (EFE)
This matrix helps us to summarize and quantify the influence of environmental factors to the business The development an EFE matrix consists of five steps:
- Step I: Make a list of factors that play a decisive role to the success and identified in the macro-environment of the assessment process
Trang 23
Petrosetco Vùng Tàu
- Step 2: Sort importance from 0.0 (not important) to 1.0 (very important) for each element The classification shows the importance of factors to succeed in the business of the company General classification levels must be equal to 1.0 - Step 3: Classification from 1 to 4 for each determinant of success 4th is a
good reaction, 3 is above average, average is 2 and | is weak
- Step 4: Human importance of each variable with its classification (= step 2 x
step 3) to determine the important score
- Step 5: Plus a total score of the importance of each variable to determine the total number of point, which is important to an organization
Regardless of the number of opportunities and threats in the matrix is the total number of the highest importance that a company can have is 4.0, the lowest average of ].0 and 2.5 Table 1.2 Matrix assessment of external factors The Number of The main external factors relative | Classification | important importance points _ Total 1,00 :
c) Operational environment of enterprises
In order to analyze the operational environment (or micro-environment and environmental sectors) of the business, we apply the model in the power of Michael I: Porter (1980) expressed by the following diagram:
CS Global Advanced Master of Business Administration l ~ 2
Trang 24¬ Gaiccs) UNIVERSITY Petrosetco Ving Tau Rivalry among competing firms Bargaining power of suppliers Threat of Bargaining substitute power of products buyers
Figure 1.5: Competitive environment of Michael Porter - Source Michael E Porter The threat of new firms: is the barrier for entering
Advantages of scale; The difference in the product; capital requirements; transfer fee; The access to distribution channels; real cost advantages without regard to size, government policy, possible action can be applied
Power of suppliers: will increase if:
Small number of large-scaled suppliers and vendors Few appropriated substitutes, small number of clients , products of suppliers is extremely important in the winning of customers-heart in the market; Changing other products may be expensive, the supply is able to penetrate deeply into the branches of the seller
Negotiating power of customers Buyer power will increase if:
Large and quantity buyers are few: buyers consume most of the product: Buyers have a large proportion of the annual revenue for sale: switching costs is low the purchaser is able to penetrate to the sellers, buyers have full information
The threat of substitute products
The threat of substitute products increases as:
GaMBA01.C02.G.3
Trang 25Grid Petrosetco Ving Tau
Buyers do not pay high costs when switching products, prices of substitutes is lower, quality and effectiveness of the product are better than alternative products are currently being used; this threat will exclude the product which is highly appreciated by customers
Intensity of competition in the industry
Competition in the sector will increase if:
There are competitors which is as strong as the company: this business section grows slowly or declines, high fixed costs or high costs of storage; hard to create opportunities for differentiation or switching costs is low, when a company
Wants to branch out
Identifying opportunities and threats: after evaluating the factors and forces from outside the company will identify: the opportunities have to catch, the threat
have to avoid
Matrix image competition identifies the main competitors, along with their advantages and disadvantages; the way to build matrix image competition is an
extension of the evaluation’s matrix of external factors
Competitors:
Table 1.3: Matrix image competition
_ Competing firm Competing firm | Company moel 1 2 The l Numbe Numbe Numbe Success relative r of r of r of
factors | importa | Classif Classif Classif
import import import
nt ication ication ication
ant ant ant
Trang 26Grigos) UNIVERSITY Petrosetco Vũng Tàu Total 7 | | important — 1,00 | point | ———— — _——
'V ANALYSING PROCESS AND STRATEGIC CHOICES
4.1 Establish long-term goals
- The long-term objective shows the expected results why we pursuit that strategy The strategy indicates the measures to achieve long-term goals Timeframe for the objectives and strategies must be get along each other, usually from 2-5
years
Each target is often accompanied by a period and associated with some indicators such as growth of capital, revenue’s growth, the level of profitability, market share, level and basis of the combination longitudinal
4.2 The process of formation and strategic choices: Include 3 stages 4.2.1 Stage 1: Input
This phase summary the basic information being entered into the form that needed for the strategy During this period, we will create the matrix: the matrix elements evaluated the internal factors, the matrix evaluated of external factors and matrix image competition
4.2.2 Stage 2: Combine
Focusing on making realistic strategy can be selected by arranging, combining elements inside and outside the key The techniques used in this phase include: matrix threats - Opportunities - strengths - weaknesses (SWOT) matrix strategic position and action analysis (SPACE), the matrix factors inside and outside (IE) and grand strategy matrix
GaMBA01.C02.G.3 GZ Global Advanced Master of Business Administration 15
Trang 27Griccd Petrosetco Vũng Tàu
a) SWOT matrix
Identify the strengths and competitiveness: is a strong point as a company operating and doing well or a characteristic increase competitiveness of the company for examples: Capacity, human resources or know-how valuable property is worth, assets held, Intangible assets; the basic competitiveness: alliance and association
Identify weaknesses and competitiveness inefficient: a weakness is an
activity and the company made a loss or reduction properties of the company's competitiveness such as: Inefficient in terms of know-how or experience or capacity, lack of tangible or intangible asset, don’t’ have core competence in basic
areas
Identify the challenges from outside:
The introduction of these technologies is better / cheaper, competitors have better products, complex regulations, interest rates rise; capability will be acquired: The migration of the population exchange rates; The politics is instable
The role of SWOT analysis in building a better strategy
Building a clear understanding of the company: strengths and weaknesses, the best opportunities and challenges, all of these will lead top conclude how to mobilize resources inside and outside the company, thinking strategically to strengthen the company's resources for future
There are 8 steps to build a SWOT matrix:
¢ List the major opportunities in the external world ¢ List the main threat
¢ List the major inner strength
¢ List the major weaknesses in intern
GaMBA01.C02.G.3
Trang 28Griccd) UNIVERSITY Petrosetco Ving Tau
* Combining inner strength with the external world the opportunity to create SO -strategy
* Match internal weaknesses with external opportunities to form strategic gender WO
* Combine with inner strength with threats to form ST -strategy * Match internal weaknesses with threats to form WT- strategy
SWOT tool to help managers make four types of strategies:
* SO Strategy (Strengths - Opportunities): use of inner strength of the company to catch the opportunities in the external world
* WO Strategy (Compliance - Opportunities): reduce internal weaknesses by taking advantage of the opportunities from the external world
* ST Strategy (Strengths - threats) using the inner strength of the company to
avoid or reduce the threat of external world
b) WT Strategy (Compliance - threats) is defensive strategies aimed at reducing internal weaknesses and avoids threats from external world
c) SPACE matrix
This matrix is used to evaluate the operation of the business, and determine the situation of the business The axis of the matrix represents the two aspects in the
organization: financial strength (FS) and competitive advantage (CA) and two
outside business aspects: environmental stability (ES) and strength of the sector (IS)
Table 1.4 SPACE matrix
Features Strategy should use Aggressive The company is in the best Penetration, market
Trang 29Griccd UNIVERSITY Petrosetco Ving Tau backward, forward, horizontally, links diversification, diversification focus Combining multiple strategies
Conservative Companies should work Penetration, market with the basic capability development, product
development and
diversification of focus
Defensive Companies should focus on Strategic spending limit,
improving internal eliminate, liquidate and weaknesses and avoid diversify focus
external threats
Competitive Strategy combining back, forward, horizontally, entry strategies, market
development, product development venture
d) Internal — external factors matrix (IE):
IE matrix put the different parts of the organization to include a 9 cell IE matrix based on two main aspects, the total number of critical points on the axis of
the IFE matrix X (denoted point: from 1.0 to 1.99 is weak inside, from 2.0 to 2.99
average, from 3.0 to 4.0 is strong) and total points on the Y axis is important (denoted point: from 1.0 to 1.99 is low, from 2.0 to 2.99 is average from 3.0 to 4.0
is high)
Trang 30Ggíoo) Petroseteo Vũng Tàu
[E matrix can be divided into three major sections; each section includes the ‘arious Strategies
- The parts are in boxes I II, IV can be called "development and construction." Appropriate strategies, such as a focus strategy (market penetration, narket development, product development) or combined (combining backward,
‘orward and horizontal)
- The parts are in boxes IJI, V, VII can be called "Hold and maintain." \ppropriate strategies, such as market access, product development
- The parts are in boxes IV, VIII, LX is the section "harvested and remove”
e) Strategic matrix:
Matrix assesses the position of the company based on two aspects:
Trang 31Gnloos) UNIVERSITY Petrosetco Vũng Tàu
‘Corner Ill ÌCarner IV |
|
-1 Reduce spending 1 Diversifying concentrated 2 Diversifying concentrated (2 Horizontal diversification 3 Horizontal diversification 3: Diversifying link
|4 Diversifying connection 4 Venture i | 5 Remove | | 6 Liquidation SLOW MARKET GROWTH 4.2.3 Stage 3: Decision
This phase covers only a technical - strategy matrix can be quantified (QSPM matrix) QSPM matrix using inputs through the analysis of stage 1, and the combined results of the analysis in Phase 2, to determine the objective of these strategies can replace
Strategy matrix can be quantified (QSPM): six steps to develop a matrix
QSPM:
- Step 1: List the opportunities / threats and other important external strengths / weaknesses inside the company
- Step 2: Classification for each critical success factors inside and outside This classification is just like the IFE and EFE matrix
- Step 3: use Matrix in the phase 2 (combined) and identify possible alternative Strategies that organizations should consider for implementation, write them on first line, put strategies into separate groups if possible
Trang 32Griccd Petrosetco VingTau
- Step 4: Determining the gravitational point of each strategy (AS) Point of attractions Is distributed as follows: | is not attractive somewhat attractive is 2 3 and 4 is quite fascinating and very attractive If successful factors do not affect the choice strategy, we don’t have to mark it
- Step 5: Calculate the total number of attractions (TAS), is the result of multiplying the number of classification (step 2) with some interesting points
(step 4) in each row
- Step 6: In total attraction for each strategy That is the sum of total attractive strategy in the column The higher score indicates more attractive strategy
Table 1.6: Strategic planning matrix QSPM The strategy can be selected Main factors Class | Strategy 1 | Strategy 2 | Strategy 3 | Strategy 4 ificat ion AS TAS | AS| TAS | AS} TAS | AS| TAS Internal factors External factors Total attraction point - = 7 - Summary of Chapter 1
In this context, there are major changes in business environment, increasing market competition is shown clearly, businesses want stability and sustainable
GaMBA01.C02.G.3
G Global Advanced Master of Business Administration 21
Trang 33Grice Petrosetco Ving Tau
development, have appropriated business strategies To create the business strategy we must analyze the external environmental factors as well as local business to identify the factors affecting business activities
In Chapter | this assignment shows some basic theoretical- knowledge about strategies such as the concept planning strategies, management processes and matrix business strategy
The basic knowledge about theory and strategic management and business strategies mentioned in Chapter | is the basic foundation for creating the business strategy of the Petrosetco VungTau General Services Joint Stock Company
Trang 34Petrosetco Vùng Tàu
CHAPTER H
REAL SITUATION ANALYSIS OF PETROSETCO VUNGTAU GENERAL SERVICE JOIN STOCK COMPANY
I ABOUT PETROSETCO VUNGTAU GENERAL SERVICES JOINT STOCK COMPANY
1.1 General information about Petrosetco Vung Tau General Services Joint Stock Company
- Name of company: PETROSETCO VUNGTAU GENERAL SERVICES
JOINT STOCK COMPANY
- English trading name: PETROSETCO VUNGTAU GENERAL
SERVICES JOIN STOCK COMPANY
- Abbreviation: PETROSETCO VUNG TAU
- Head office address: No 63, 30/4 Street, Ward 9, Vung Tau City - Tel: 84 — 64 - 3832170 - Fax: 84 — 64 - 3832234 - Email: setcocatering@vnn.vn - Website: Www.petrosetco.com.vn PETR0VIETNAM
_PETROSFTCO VUNG TAL |
- Registered Capital: VND 32.400.000.000 (VND thirty-two billion four - Logo of company:
hundred million)
- Business registration certificate: No 3500835690 by Department of Planning and Investment of Ba Ria Vung Tau province, dated 03 January in 2008, which changed the 3rd time in June 6, 2010
1.2 About the main business activities of the Company - Provide catering services for offshore petroleum projects
GaMBA01.C02.G.3
G Global Advanced Master ot Business Administration
Trang 35
Griccd) UNIVERSITY Petrosetco Ving Tau
- Provide both international and domestic rigs and platforms in petroleum industry with food drinks fuel gasoline as well as equipment for daily life - Doing other businesses based on the oriented strategies of the Petrrosetco
and Petrovietnam
The company is currently providing catering service for 30 drilling platform and providing foodstuff for 48 oil-rigs In addition the company also provides other onshore gas processing factories with catering services as well as other kinds of services
1.3 About the catering services
Catering sservices is directly done on the drilling platform that consists of two main parts:
- Meal supply:
- Cleaning services for bedrooms and offices on drilling platform;
Oil and gas drilling, exploration and exploitation normally have people with many nationalities working together on the oil-rigs and platforms All duties on drilling rigs and platform are hard and long-time jobs Therefore, customers can
easily upset if service caterers are not dedicated and careful
Catering services style need to suit different culture and nationalities The menu must be diverse and must not overlap in the same month Catering staff must be carefully recruited, have good health, good foreign language, well trained in cooking with careful and dedicated serving styles
Cleaning duties in oil rigs and platforms such as bedroom, table cleaning and laundries are highly industrialised jobs Hence cleaning staff should know how to use detergent in order to clean up things with gentle and dedicated attitude
Equipment that needs to be invested is the large food storage systems including cold storage vegetable storage materials storage and container system
GaMBA01.C02.G.3
Trang 36GRIGGS UNIVE RSITY ⁄ Petrosetco VingTau
like frozen containers dry containers vegetables container First stage food processing system also needs to be built together with micro-sterilization system
Build and apply quality control measures according to international standards such as [SO 9001-2000 and HACCP system
The process of service implementation from making plan to purchase food from vendors move into storage safety check and transfer into dedicated containers After that catering companies contact and coordinate with sea-port
operators to transfer foodstuff into service rigs which will carrier the food to oil rigs
and platforms All stages of procurement first-stage processing, storage and transportation must be implemented according to made-schedule, technical procedures, followed by with dishes processing procedures based on the requested and approved menus of the customers menu on oil rigs and platforms
Requirements for service quality: Catering Company has to know its customers in terms of psychology, economics, culture and religion characteristics For example; European customers like eating more meat than Japanese customers who love to eat more seafood Meanwhile, Islam guests do not eat food which is made from pork and Hindu do not eat beef All of these are to
ensure customers accept the company’s services
1.4 Vision - Mission - Core Values - Business Philosophy
Vision: "To become a leading company in Vietnam in catering services" Mission: "Create the highest value for customers and shareholders; provide all company’s staff lives with full of material and plenty of spirit: share the results with the community and contribute to the development of oil and gas industry of Vietnam"
Core values: "Create real value through hard work, effort and creativity" Business philosophy: "Safety - Efficiency - Development"
1.5 Organizational structure and apparatus:
Trang 38
GRIGGS UNIVERSITY Petrosetco Ving Tau
- Company leaders include:
* Board of Management: 5 members (01 President work full time, 04 members work occasionally according to agreed schedule);
* Board of Directors: 04 members (01 Directors, 03 Deputy Directors)
* Supervisory Board: 03 members (01 supervisor work full time, 02 members work occasionally according to agreed schedule):
- Management Departments: includes 6 function Departments (Finance and Accounting, Human and Organization Commerce, Planning and Materials, Safety
and Quality, and Marine Services Departments)
- Service and Production Departments: include Onshore service Management Department which manage 05 service teams In turn, these service teams will
support the operation of catering service in 22 Vietsovpetro’s oil rigs, 22 foreign oil
rigs, some of onshore customers as well as food supply operation for 48 oil ships II REAL SITUATION ANALYSIS OF BUSINESS ACTIVITIES OF
PETROSETCO VUNGTAU (INTERNAL FACTORS) 2.1 Current situation services operations of Vung Tau Petrosetco 2.1.1 Offshore Catering services:
Onshore catering services have been operating from 1980 and incessantly grow and develop with Vietnam oil and gas industry However, from 2000 to now, there were more and more oil contractors who joined and started doing exploration and exploitation in Vietnam As a result, some new catering service competitors entered this market and directly compete with the company that lead to a decrease in market share of the company The catering service activities are currently divided
into two main services:
Trang 39GRIGGS Petroseteo Vũng Tàu
UNVERSIT is ⁄
a Full package catering service:
The company is providing catering services for 30 drilling rigs oil storage vessels and service vessels for the Vietsovpetro Joint Venture Enterprise, Foreign ol and gas contractors the Joint Operation Companies in Vietnam such as JVPC, PVGas BP Pipelines, Technip, Ballasharm etc
Most of the market share that the company dominates is market of catering services for Vietsovpetro (VSP) However, Vietsovpetro’s operation mechanism is much bureaucratic and this takes more times and effort of Petrosetco Vung Tau to salsty Vietsovpetro’s demand In addition the company’s competitiveness is still weak and less flexible, marketing team is lack of good leader and not working effectively, as well as not active to gain more market share
As a specific characteristic, 90% catering service activities is depending on the oil and gas exploration and exploitation strategies As a result, it is hard to have a quick development when services are consumed in a very special environment — offshore oil rigs and platforms, not a normal market On the other hand, the
company have not built a long-term strategy and clear direction for the near future
when more oil fields’ storage is depleting, the exploration and exploitation activities will gradually reduce As a consequence, the catering service will decline as well
Trang 40Petrosetco Vang Tau [ — cĩ - From 1995 4 VSP(Song Dinh and Ky Van) Catering | | today - —LPETROSETCO - UNIVERSAL SODEXHO | | - Food, From 2008 | 3 | (Smith Borneo work for Su Tu Vang project- | | | container, HR to day
| / Cuu Long JOC) |