GRíGGS Global Advanced Master of Business Administration PROJECT REPORT BUSINESS DEVELOPMENT STRATEGIES OF NASOS PERIOD 2013-2017
AND THE VISION TO 2020
Group 2 - Class GaMBA C0510:
1 Le Tan Duong 2 Le Thanh Hung 3 Nguyen Thi Thuy
4 Le Phong Dang Khoa
5 Nguyen Van Gap
Ho Chi Minh City 2012
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THE COMMIEPMENTS
Group 2 consists of 5 members hereby to commit that all the work contained in this dissertation “Business Development Strategies of the National Southern Oil Spill Response Center (NASOS), period 2013~2017 and the Vision to 2020” 1s the result of our own unaided ettorts
All information and statistics used within are clearly referenced and linked to the main sources The research results have not published in any public works and researches betore
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ACKNOWLEDGEMENTS
The results we achieved today first to come trom our own efforts however without the selfless help of involved people we can hardly achieved the expected goals Therefore, after finishing this final dissertation, we want to send our sincere thanks to Center for Educational Technology and Carreer Development (ETC) which gave
us Supportive assistances throughout the Master course of Griggs University Ss oo
We want to show our gratitudes to our professors and lecturers who have dedicately taught and inspired us with valuable knowledge that will be very useful for our current and future works
We also thank the Supervisor board who have instructed and assisted us through the
process of finishing the dissertation
In addition, our group very much appreciates the help from NASOS’s executive board for providing us valuable statistics and data used in this project
We also cannot forget to thank our coursemates who always readily share their knowledge and insiders’ experiences in specialized industries
Finally, it is our beloved families that gave us major supports and love to let us successfully finish the course
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CONTEXT
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1.1.6 NASOS Market Expansion 1s an ObJective Factor: 26
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CHAPTER 2 ANALYSING THE CURRENT BUSINESS OPERATION AT NASOS28
2.4 The Birth and the Development oFNASOS- 28
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The Establishment and Development Process of NASOS — 29
Management and Organisational Structure at NASOS- 3I
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2.3.1.1 Analysis of Internal Environment Factors of NASOS for the Oil
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23.1.8 Assessing Results existing Causes, Strengths and Weaknesses of
NASOS in Providing Oil spill FESPONSE SEFVICES® cccosisevececcaces vasexe +
23.1.9 Building SWOT Matrix for Oil spill response services Activities
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2.3.2.1 Analysis of Internal Environment Factors of NASOS for the Ship
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2.3.3.1 Analysis of Internal Environment Factors of NASOS for Ports &
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2.3.3.3 Analysis of External Environment Factors of NASOS for Ports &
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23.3.9 Building SWOT Matrix for Ports & Warehouses Rental Services:
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CHAPTER 3: STRATEGY AND SOLU TIONS PLANNING TO DEVELOP
DOMESTIC MARKET OF NASOS AND RECOMMENDATIONS NASOS 113
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ABBREVIATION LIST
d4 = NASOS National Southern Oil Spilling Response Center
Š OCPP Provinciall Response Plan for Oil Spilling
4 PVD Offshore(PVDO) — PetroVietnam Drilling Offshore
+ PVN Vietnam Oil and Gas Group (PetroVietnam )
+ PV Trans Petroleum Transport Corporation
+ Vinalines Vietnam Maritime Corporation
4+ VINASARCOM National Committee for Search and Rescue
Trang 9CrhIC 6 a ĐI K, Strategic Management — Group 2 ' TABLE LIST
Chapter I:
Fable 1.1: Statistics of the amount of oil spill in several years in Vietnam lable 1.2: Evaluation of SBUs with elements of “Business Position” lable 1.3: Evaluation of SBUs with elements of “Prospect of the Industry ~ Table 1.4: CPM
Table 1.5: QSPM Chapter 2:
‘Table 2.1: Statistics of the amount of oil spill in several years in Vietnam Table 2.2: Operational Cost and Revenue of NASOS in the 2007-2011 period Table 2.3: Matrix for Internal Factor Evaluation of NASOS
Table 2.4: Matrix for External Factor Evaluation of NASOS
‘Table 2.5: Competitor Information in Oil spill response services Industry Table 2.6: Competitive Image Matrix of Oil spill response services
Table 2.7: Factors lie on axes of SPACE Matrix for Oil spill response services Industry
‘Table 2.8: Operational Cost Summary
Table 2.9: Operational Cost and Revenue of NASOS in 2012 ‘Table 2.10: Technical Specifications of NASOS I Ship Table 2.11: Technical Specifications of NASOS II Ship
Table 2.12: Matrix tor Internal Factor Evaluation of Ship Rental Services Table 2.13: Matrix for External Factor Evaluation of Ship Rental Services Table 2.14: Competitor Information in Ship Rental Services
Fable 2.15: Competitive Image Matrix of Ship Rental Services
lable 2.16: Factors lie on axes of SPACE Matrix tor Ship Rental Services
Trang 10CulàIC,( 3) = Strategic Management — Group 2 ; : lable 2.18 Matrix for External Factor Evaluation of Ports and Warehouse Rental
Services
Table 2.19: Factors lie on axes of SPACE Matrix tor Ports and Warehouse Rental Services
‘Table 2.20° Evaluation of SBUs with elements “Business Position” ‘Table 2.21: Evaluation of SBUs with elements “Prospect of the Industry” Chapter 3:
‘Table 3.1: QSPM for Oil spill response services Table 3.2: QSPM tor Ship Rental Service
Table 3.3: QSPM for Ports and Warehouse Rental Services Table 3.4: Expected Business Result of NASOS year 2012-2020
Table 3.5: Expected Business Result for Ship Letting of NASOS year 2012-2020 Table 3.6: Expected Business Result of Ship NASOS I year 2012-2020
‘Table 3.7: Expected Business Result of Ship NASOS II year 2012-2020 Table 3.8: Expected Business Result of Ship NASOS III year 2012-2020 ‘Table 3.9: Expected Business Result of Ship NASOS IV year 2012-2020
Table 3.10: Expected Business Result for Ports and Warehouse Rental Services in Vung Tau base year 2012-2020
Trang 11CC vã is Strategic Management — Group 2 FIGURE LIST Chapter I: igure 1.1: Aground Ship to Figure 1.2: Comprehensive Strategic Management Model we
Figure 1.3: Michael FE Porter's Five Forces Analysis Figure 1.4: Identifying Strategies and Strategic Options Figure 1S: Me.Kinsey — GE Matrix
Figure 1.6: Strategy Groups based on Mc Kinsey — GE Matrix Figure 1.7; SWOT Matrix
Figure 1.8: SPACE Matrix Chapter 2:
Figure 2.1: Aground Ship
Figure 2.2: Management Structure in NASOS Figure 2.3: Organisational Structure in NASOS Figure 2.4: Area of Business Activites of NASOS
Figure 2.5: Conservative Strategy of SPACE Matrix for Oil spill response services Figure 2.6 GOT Training I
Figure 2.7; SWOT Matrix for NASOS Oil spill response services Figure 2.8: NASOS Ship
Figure 2.9: Conservative Strategy of SPACE Matrix for Ship Rental Service Figure 2.10: SWOT Matrix for NASOS Ship Rental Service
Figure 2.11: Ports in Mekong Delta
Figure 2.12: Map of base located in Ho Chi Minh City Figure 2.13: Map of base located in Vung Tau City
Figure 2.14: Conservative Strategy of SPACE Matrix for Ports & Warehouses for Rent Service
Figure 2.15: SWOT Matrix for Ports & Warehouses for Rent Service Figure 2.16: Me Kinsey-GE Matrix
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APPENDIX
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BUSINESS DEVELOPMENT STRATEGIES OF NATIONAL SOUTHERN OIL SPILL REPONSE CENTER (NASOS) IN THE
PERIOD 2013-2020 INTRODUCTION
1 The Context and the Needs for Research Topic:
ihe Nauonal Southern Oil spill response services Center (NASOS) is in charge of public tasks in preventing and repairing consequences of environmental pollution in activities that hold high risks of oil spilling
In addition the the main public tasks, Government also grants permission and encourages NASOS to engage in non-public business activities in order to maintain the existing human capital and generate revenue to offset incurred costs However, during 52 months of active operation, NASOS only participated in 8 times, thus the frequency of participation is: 8/52 = 0.153846 time/month
Given the capital investment of 98.731.481.257 VND and revenue stands at only 921.850.135 VND in the period 2007-2011, it indicates the under-performance of NASOS
The arising question is that: Why NASOS, a business unit that has good investment, has such an inefficient business performance? This has motivated our group to pursue research in business activities of NASOS
2 Research Objectives and the Applicability: 2.1 Research Objectives:
Evaluating of the current business activities of NASOS to identify the existing situations
Analysing tactors related to business environment of NASOS to_ identity opportunities challenges from external environment as well as strengths and weaknesses and especially advantages of the Center:
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Proposing business activities, solutions and strategies for the development in the
period 2013-3020
2.2 The Applicability:
This research 1s done based on the theory of company-level strategy and the current situation in NASOS From this, strategies are planned therefore the applicability of this research 1s very high because it 1s suitable to the existing resources of NASOS and current business environment This research will enable NASOS to both accomplish public tasks and commercial activities as it points out practical solutions tor NASOS to implement effective business strategies
3 Scope of Research:
Researching and assessing factors related company-level business strategies of NASOS in the past Proposing business expansion activites as well as strategies solutions for the Center in the near future
4 Research Methodology:
Internal and external secondary data are used together with formal discussions with executive board members from NASOS
5 Structure of Research Project: 3 chapters
Chapter 1: Theoretical basis of oil spill response services and the business development strategies
Chapter 2: Analysis of the current business situation at NASOS
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CHAPTER 1
THEORETICAL BASIS OF COMPANY-LEVEL STRATEGY PLANNING
Theoretical basis of Business Strategy: 1.1.1 Definition of Strategic Management:
Strategy Is a general program of actions to achieve specific objectives Strategy of organization consists organ!zation’s goals, how to perform and how to ensure its resources are tully adequate
Atred Chandler detined strategy as: Strategy includes the determination of basic long-term goals of an organization, the courses of action and allocation of resources necessary to achieve those objectives
According to James B.Quinh: Strategy 1s a kind of plans to coordiate main objectives, policies and operational sequences together
According to Fred R, David in his "Outline of strategic management": strategy is a mean to achieve long-term goals Business strategies may include the development of geography, diversification of activities, property, product development, market penetration, cutting spending, liquidation and joint
ventures
Strategy 1s also understood as a set of objectives, major policies and plans to achieve that goal They show the direction of business activities and what field of business that organisation will play in
1.1.2 Levels of Strategy:
Based on the strategic management level that the strategy is divided into the following three groups:
- Company-level Strategy: - Business-level Strategy,
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- Function-level Strategy
1.1.3 Company-level Strategy:
Company-level strategy is identifying and defining the purposes, the objectives of the company determing the business that the company pursue, creating basic policies and plans to achieve goals and the company's distribution of resources between business activities Company strategy 1s applied to the entire business
4 Company-level Strategy Objectives:
Aim to objectives and overall range of activities of the company
+ Types of Company-level Strategy:
In function-level strategy, it focuses on assisting company-level strategies and operational and business areas
+ = Types of Strategy:
Based on the level functions, strategy can be divided into the following groups:
» Combined Strategies Group:
In this strategic group consists of strategy forward, backward and horizontal combination
- Forward combined strategy: Used to increase control or ownership towards the
distributors or retailers
- Backward combined strategy: Used to increase businesses’ ownership or control over suppliers This will allow businesses to provide stability, control over input
costs,
- Horizontal combined strategy: Used to control the competition This strategy allows the business to focus on resources expanding the scope and increasing the competitiveness of enterprises
“+ Specilised Strategies Group:
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F Strategic Management — Group 2
- Market Entry Strategy Increasing the market share tor the product or services available in the current market
- Market Development Strategy Putting existing products or services of the business in new geographic areas
- Product Development Strategy; Adding to the current market products or services similar to existing products of the business but have improved modified features
“+ Expanding Operation Strategies Group:
The expanded — strategies include concentric — diversification, — horizontal
diversification and mixed diversification
- Concentric Diversification: Adding to existing market products or services relating to the current product
- Horizontal Diversification: Including existing market for current customer group of the new product or service, not related to the current product
- Mixed Diversification: Adding to existing market new products or services, not related to the current product
s* Other Strategies Group:
In addition to the strategies mentioned above, in reality there are a number of other strategies that businesses can apply as joint venture strategy, downsizing operations, giving up activities, liquidation etc
- Venture Strategy: When one or more businesses coorperate to pursue a certain goal
- Narrowing Strategy: When businesses need to restructure, proceed to give a number of products or areas of activity in order to save the position of the business ~ Liquidation Strategy: Is the sale of business assets Admitting defeat and trying to save up what you can
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1.1.4 Strategic Management Process:
Comprehensive strategic management model is described in Figure 1.2, according Fred R David this is a widely accepted strategic management model, It presents a clear and practical approach Business strategy management process Is divided into three phases: - Strategic Planning: - Strategies Implementing: - Assessing and controlling strategies Feecibock e « TC PT Icte tify =r MS the
toc †ive^s business TP fF Ồ ff 48 FP resources evarucate
and mission performance traf ec iS L:=vise tr2†<>cjt= † † Feedback
STRATEGY | SRA EGY | STRA” EGY |
FORMULATION MFELEMENTAT Oty EVALUATION
Figure 1.2: Comprehensive Strategic Management Model ee ce Me a a a = ater as a a ae ae ae ae a a oe oe oe ' bp t } -~ -=- =f -4 t t => n
(Source: Fredr David — The Concept of Strategic Management)
+ = Strategic Planning Phases:
+ Analysis of External Environment:
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threats that the company should avoid to reducing the harms from the external environment There are many different factors which external environment (macro environment and micro environment) therefore the analysis of the external
environment is limited to the factors that affect the business y Macro-environment includes: * Political factors; 2 Economic factors, - Technologicat factors: a International market factors 7 Micro-environment includes:
- Demand and Supply:
- Human Resources Management
“* Porter's Five Forces Analysis: | POTENTIAL COMPFTITOFS | MAIN SUPPLI UPPUERS | — COMPETITORS — _ CUSTOMERS | | ) ; —~-, cau EEN ee ]— SUBSTITUTIONS
Hình 1.3: Michael E Porter`s Five Forces Analysis
(Source: Griggs Universitv-Strategic Management)
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4 Analysis of Internal Environment:
In every company there are always different strengths and weaknesses Strengths and weaknesses of the internal environment, together with external opportunities, threats and mission act as the basis for setting goals and strategies of the company Internal environment factors include:
y Finance: \ncluding factors such as financial capability and financial
management,
~z Management: \ncluding management activities that ensure the result of actual
production according to plan such as: human resources management, production management, quality contro] management, financial and sales management
» Marketing: Marketing is described as a process of identifying, forecasting,
establishment and satisfying the demands and needs of customers Marketing management consists of market research, select market objectives, distribution channel system, after sale service etc
» Human Resources: Playing an important role in the success of the business
Whether a business strategy is correct or not, it will not be effective if human resources do not work efficiently Personnel include factors such as: human resources organizational structure, quality of human resources, retention policy and human resources development etc
» Management and Operational Services: \nclusing all activities to transform
Input into output and services Production process includes: designing manufacturing process, selection of production lines, production scales, layout, quality, services and prices
+ Using Matrixes for Evaluation (IFE, EFE, SWOT, SPACE, CPM, QSPM)
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I:xternal Factor | Competitive Profile © Matrix | Internal Factor Evaluation
Evaluation Matrix (| (CPM) Matrix (IFE) EFE) | | PHASE I: ENTRANCE | PHASE Il: COMBINATION Strengths- Weaknesses- Opportunities- Threats | Deftense.Competitive) strategic | services portfolio (SWOT)
SPACE Matrix: Select | MC.KINSEY-GE = Matrix:
| (Aggressive, Conservative | Assessing the choice of : PHASE III: DECIDING STRATEGY OPTIONS Quantitative Strategic Planning Matrix (QSPM)
F igure 1.4: Identifying Strategies and Strategic Options (Source: Griggs University-Strategic Management)
“+ External Factor Evaluations (EFE):
EFE matrix assesses external factors, synthesis and summary of the principal opportunities and risks of the external environment that potentially affects the operation of the business It helps managers to correctly assess the extent of the business response to opportunities, risks and make judgments about whether the external factors affecting the company are favorable or difficult
Building this matrix requires the following 5 steps:
- Step i: M ake a list of 10 - 20 opportunities and threats factors that can mainly affect the success of companies in the industry / business Industry
- Step 2: Cl important)
assify the importance on a scale from 0.0 (not important) to 1.0 (very to each factor The importance of each factor depends on the level of the factors that affect the Industry / industry that business 1s manutacturing / trading Total score of the importance of all the factors must equal 1.0
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- Step 3: Determine the weight from | to 4 for each tactor, the weight of each
factor depends on the level of each company's response factor, where 4 1s the best response 3 1s above average 2 1s the average response, | response 1s Weak - Step 4: Multiply the importance of each factor by its weight to determine the
score of each factor
- Step 5: Sum ofall the factors is the total score of the matrix
KF valuation: The total score of the matrix does not depend on the number of elements in’ the matrix, the highest 1s 4 and the lowest point is_ 1 - If the total score is 4, the company 1s responding well to the opportunities and risks
- If the total score is 2.5 companies are responding reasonably well to the opportunities and risks
* If the total score is 1, the company ts weakly response to the opportunities and risks
“* Internal Factor Evaluations (IFE):
Internal factors are considered very important in every business strategies and objectives set by the business, after taking into account internal factors, managers need to set up the matrix elements to consider the ability to react and recognize strengths and weaknesses It helps businesses take advantage of the strengths to exploit and prepare internal resources to confront the weaknesses and find ways to improve this weakness
Building this matrix requires the following 5 steps:
- Step 1: Make a list of 10 - 20 opportunities and threats factors that can mainly atfect the success of company and its set objectives
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C;RICGCs) ; Strategic Management — Group 2 CS
- Step 3: Determine the weight from | to 4 tor each factor, where 4 1s the very
good, 3 1s above average 2 1s the average, | response Is weak
- Step 4: Multiply the importance of each factor by its weight to determine the
score of each factor
- Step 5: Sum of all the factors 1s the total score of the matrix
Evaluation: The total score of the matrix is in the range from point | to point 4, does not depend on the number of the impertant factors tn the matrix:
* If the total score is less than 2.5, the company’s weaknesses are internal factors
* If the total score is more than 2.5, company’s strengths are internal factors
** Business Porfolio Analysis Matrix (McKinsey-GE):
The business portfolio analysis of McKinsey — GE is an approach to build matrix which aims to analyse and evaluate business portfolio in SBUs (Strategic Business Unites) of an organization A SBU can be all business activities of small and medium businesses or can be a business unit of large/ multinational corporations A SBU has its own business objectives and strategies
The analysis of business portfolio aims to:
- Analysing current business portfolio to make decisions regarding business expansion or cut back activities in SBUs;
- Deciding the removal of inefficient SBUs
McKinsey — GE Matrix uses 2 factors that are “Prospects of Industry” and “Business Position” for the evaluation These factors are assessed by marking method
Steps of building matrix are as follow:
- Step 1: Building SBUs
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Y Factors affect prospect of Industry market scale potential Industry growth
Strategic Management — Group 2
price competitiveness general market risks barriers to entry product differentiation,
Y Factors affect the position of the business: assest values, brand strength market share, customers’ loyalty Các nhân tơ ảnh hương tới vị thể của doanh nghiệp: giá trì tơng tài sàn sức mạnh thương hiệu thị phản sự trung thành của khách hàng relative costs, relative profit, technology progress, service quality, financial strengths required resources, management ability -Step 2: Constructing weights for SBUs
-Step 3: Constructing points for SBUs trom 1-5 in which: v i Very weak ¥ 3 Average ý 5 Strongly recommend Table 1.2: Evaluation of SBUs with elements of “Business Position” Factors Weights | SBU I | SBU 2 - Market Share - Profit related to competitors - Group Management - Labour Costs - Financial Strengths - Technology Progress - Customers’ Loyalty
- Unique points about the Industry
(Source: Strategic Management lecture materials — Griggs University)
Trang 25Table 1.6: Evaluation of SBUs with elements of “Prospects of the
Strategic Management — Group 2 Industry” Factors Weights - Market Scale - Protential Industry Growth - Competitiveness eal chiar SGaz - Globalisation Opportunities - Service Price Trends - Barriers to Entry - General Market Risks - Differentiation
(Source: Strategic Management lecture materials — Griggs University) - Step 4: Constructing Mc.Kinsey — GE Matrix: BUSINESS POSITION High Medium Low High Medium Low Prospects of the Business Table 1.5: Mc.Kinsey — GE Matrix
(Source: Strategic Management lecture materials — Griggs University)
- Step 5: Assessing Strategic Group based on Mc Kinsey — GE Matrix:
Trang 26GR Phu) G9 Strategic Management — Group | | 2 | 4 ; Š () {)
Figure 1.6: Strategy Groups based on Me.Kinsey — GE Matrix (Source: Strategic Management lecture materials — Griggs University) v Aggressive Strategy Group:
# |: Agressively attacking =2: Attack in specialized areas * 3: Persistent attacking
Y Defensive Strategy Group: * 4: Selected service expansion * 5: Expansion * 6: Limited Expansion Y Retreat Strategy Group: * 7, Removal * 8 Gradually retreat = 9 Immediate retreat “+ SWOT Matrix:
What makes SWOT analysis becomes so powerful is the fact that it can help businesses to consider all of the opportunities that business can take advantage of By understanding the weaknesses businesses will be able to manage and
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eliminate the potential risks that they are not aware of before Furthermore by using a basis for comparison and SWOT analysis between business competitors enterprises can outline a strategy to help businesses differentiating themselves from competitors, enable businesses to compete more effectively in the market
Building this matrix requires the following 8 steps
Step I) List major opportunities from external environment (O1, O2 etc): Step 2: List major threates from external environment (T1, 12 etc); Step 3: List major strengths from external environment (S1, S2 etc): Step 4: List major weaknesses from external environment (W1, W2 etc) Step 5: Combine strengths and opportunities to form strategies (SO): Step 6: Combine weaknesses and opportunities to form strategies (WO): Step 7: Combine strengths and threats to form strategies (ST),
Step 8: Combine weaknesses and threats to form strategies (WT) SWOT MATRIX Opportunity Threat SO Strategies: ST Strategies:
/ ` ° si strengths _| L./ Use strengths
Strengths 2d Take advantage Of)? te oer ww avoid
opportunities threats
WO Strategies: WT Strategies:
|./ Minimise weaknesses |./ Minimise weaknesses
Weaknesses 2/ Take advantage of|2./ In order to avoid
opportunities threats
Figure 1.7: SWOT Matrix
(Source: Fredr David — Strategic Management Definitions) “* SPACE Matrix:
Trang 28CzlklC,( ` a, Strategic Management — Group 2 ; ;
SPACE Matrix (The strategic Position & Action Evaluation matrix) 1S a management tool to analyse strategy It 1s used to identify which strategy is the best for the business to pursue Financial Status FS | +6 +5 Conservative Strategy +4 Ageressive Strategy „5 +2 Cost Advantage ( CA) +] Industrial Status ( 1S) CA -6 -5 -4 -3 -2 -I 0 +] 42 44 45 76 5 + -l -2 a | Defensive Strategy Competitive Strategy -4 -5 -6 Enviroment Status ES
Figure 1.8: SPACE Matrix
(Source: Fredr David — Strategic Management Definitions)
Trang 29Agrressive, Strategic Management — Group 2 - Competitive: - Defensive, - Conservative
[he axes of SPACE Matrix represent two internal factors: Financial Strengths FS and Competitive Advantage CA and two external factors: Environment Stability ES and Industry Strengths IS These four factors are main determinants for the decision of overall strategy
The steps to develop the mairix are as follow:
- Step I: Select a group of elements of financial strengths (FS) competitive
advantage (CA), environment stability (ES) and industry strengths (IS) These are
some of the indicators reflected on SPACE Matrix’s axes
- Step 2: Set the value +1 (Worst) to +6 (Best) for each factor of FS and IS Set
the value of -1] (Best) to -6 (Worst) for each factor of ES and CA
- Step 3: Calculate average score for FS by summing all the point of elements,
then divide for the number of element in FS Apply the same procedure for IS, ES and CA
- Step 4: Mark the average score of FS, IS, ES and CA into suitable axes of
SPACE Matrix
- Step 5: Sum the score on X axis and mark on the X axis, apply the same
procedure to Y axis Identify the intersection in XY axis
- Step 6: Draw vector directed from the origin of SPACE Matrix goes through
the new intersection This vector shows the suitable strategy for the business: Attack, Competitive, Defense or Cautious Strategy
“* Competitive profile Matrix:
This matrix is built in order to make comparative evaluation of companies with major competitors in the same industry The comparison is based on the factors affecting the competitiveness of companies in the industry Thereby managers
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Strategic Management — Group 2
consider the strengths and weaknesses of the company compared to competitors identify competitive advantages for the company and weaknesses to overcome Building this matrix requires the following 5 steps
- Step I: Make a list of 10 main factors that significantly affect the
competitiveness of companies:
- Step 2: Classify the importance level from 0.0 (Unimportant) to 1.0 (Very
Important) for each factor The individual importance level depends on its influence level on the competitiveness of business The total score need to be equai to 1.0,
- Step 3: Determine the weight trom | to 4 for each factor, the weight of each
factor depends on the ability of the company to the elements, of which 4 is good, 3 is above average, 2 1s average, | is weak;
- Step 4: Multiply The importance of each factor by its weight to determine the
score of elements;
- Step 5: Sum the score of all factors to determine the total score of the matrix
Trang 31s*Qwdantiftafive Strategic Planning Matrix (QSPM):
Strategic Management — Group 2
(QSPM Matrix is aimed to evaluate and rank the strategic plans, trom which we choose the best strategy for the business This matrix using all the information data
trom the above matrix: IFE, EFE CPM SWOT matrix ete
Building this matrix requires the following 6 steps:
- Step 1: List internal strengths, weaknesses (should be at least 10 elements) and external opportunities and threats (at least 19 elements) in the left column This information should be obtained from the EFE matrix and [FE matrix,
- Step 2: Classify for each important internal and external factor This classification 1s done the same as in EFE Matrix and IFE Matrix:
~ Step 3: Identify suitable strategies that business can use These strategies are formed and assembled in separate groups;
- Step 4: Determine the attractive score (AS) which is the quantification of the
relative attractiveness of each strategy in the strategic group can be replaced Attractive score is determined by considering the impact the choice of strategies being evaluated for each important internal and external factor “AS” 1s allocated to each strategy so as to denote the relative attractiveness of each strategy compared to other strategies Some attractions are as follows: |-not attractive, 2- less attractive, 3 - pretty attractive, 4 - very attractive If certain factors do not affect the selection then it is not marked and the column ts left blank;
- Step 5: Calculate the total attractive score (TAS) Multiply the classification score with the attractive score in each row If only impacts of either external or internal factors are considered, TAS indicates the relative attractiveness of each strategy and the higher TAS the more attractive the strategy 1s:
- Step 6: Calculate attractive score Sum the TAS for each strategy, The TAS shows the best strategy in each group of choice
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(SPM Matrix has many advantages such as combining appropriate external elements to the decision-making process, continuously researching strategic groups unlimited number of strategies can be assessed However it also has some limitations such as: performing matrix QSPM requires intuitions and judgments based on experience The discussions between the administration, the staffs in the process of strategic analysis and choice may raise different opinions
+ Strategy Implementation Phases:
Implementation strategy is often called the action stage of strategic management The execution of the strategy Is
- Set short-term goals;
- Adjust the organizational structure; - Develop policies;
- Develop a budget:
- Develop corporate culture
This stage is considered to be the most difficult in the strategic management process because it not only requires sensitivity, determination but also sacrifice of the administrator The successful execution of a strategy 1s critical in the ability to use limited resources to thoroughly solve the task
+ Strategy Evaluation Phase:
This 1s the final stage in the process of business strategic management In this stage the administrator will monitor the results of above stages It is needed to conduct strategic check to ensure the strategies are carried out as intended or not In the case of "no" it is necessary to apply the adjustment strategy Phase includes the measurement of work, determining the results and achievements of individuals and units detecting mistakes and applying corrective measures
Strategy process 1s a continuous and complex process Just a small change in one of the main steps in the model can change some or all of the steps Therefore strategic planning strategy implementation, and evaluation activities are required to be
Trang 34carried out continuously regularly not just at the end of each year Strategic
Strategic Management — Group 2
management process does not seem to stop at any time Strategic management process In practice cannot be analyzed explicitly and strictly implemented as proposed in the model The strategies are not flexible but must choose the order of priority to implement
The model also indicates the existence of a lot of factors that affect the strategic management in the business, such as the size of the business A number of other factors also affect the management style, the complexity of the environment, the complexity of the product, the nature of the problem and the purpose of the planning system tn the enterprise
1.1.5 Theory of Market Expansion and NASOS’s Market Expansion Strategy:
+ Market Definition:
The market is a synthesis and objective economic category, it is associated with the production and circulation of goods, is a prerequisite for the existence and
development of a business
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money trading and other services| Market in this sense is both concrete and abstract covering both input and output markets with buyers and sellers
Business market includes input market and output market Input market ts the supply of factors of production (raw materials, capital, human resources, etc ) including vendors Output market 1s where businesses supply goods to customers customer markets including consumer products Both markets have an important role tor the operation of a business if the first market decides the existence and quality of the output product the output market decides which goods are acceptance by customers, whether to continue production or not, what determine the existence and development of businesses in the market
From the sellers’ perspective in the consumer market, Philip Kotler - famous economist in the field of Marketing launched a more specific view of the business market: The market consists of all potential customers with a specific need or desire, willing and able to participate in the exchange of goods to satisfy the needs and wants
Thus market size depends on the number of people in need and ts able to satisfy that demand through exchange and 1s limited to a particular region or a particular domain In this sense, market has a more specific nature which can be measured, evaluated and compared The most common goal of business is pursuing market share and profits the approach of Philip Kotler is appropriate and preferred The market size is comprised as the number of customers 1.e to measure the market size We Just count the number of customers in that market However it is too simple and not entirely accurate, but the market size ts calculated based not only on the number of customers but are based on sales volume and revenue yield from that amount
Customers
From marketing point of view, the market 1s divided into several objects: the overall market potential market target market Overall market includes the customer ts the total number of residents in a given space they have the demand to buy with different purchasing power so there 1s a huge number of customer in the overall
Trang 36€ r|\Jt( ¡( )
Strategic Management — Group 2
market This number of customers is divided into several groups according to the
needs purchasing power and different abilities One or more groups become the
potential market for the business The overall market consists of market potential
and target market Potential market is the market consists of one or more groups of
customers have the desire, willing to buy and be able to buy and be satisfied Target
market is composed of one or several groups of customers which businesses have
chosen to meet the needs based on a careful study of the process needs, purchasing power, the market's ability to buy the similarities and consolidated with the financial ability, production capacity, management and macro and mircro-economic conditions Therefore the target market is now dominating the market The potential
market 1s what the business aim for, has the desires and ability to dominate
It can be said that the target market 1s a major condition for the existence of the
business while potential market is a prerequisite for the growth of that business In
the future The bigger the businesses, the higher the ambitions to dominate the
market, so they must find ways to exploit the overall market, search and conquer the
potential market to turn it into the target market
4 The Role of Market for Business:
It is not coincidence that every business projects carry out market research extremely carefully and meticulously Market research will helps businesses to respond to a series of strategic questions: Producing what? Fow whom? The scale of production? The answer to all these things lie on the market: Market size? Characteristics of the market? Market demand? Answers for these questions enable the business to decide whether to go on with the production The more complete this step is, the higher the chance of success of the project The market is a necessary condition for the establishment of the business
When business is in operation, the market is extremely important for the existence
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GiRIMiGsS/ Strategic Management — Group 2
All business entering the desired economies has the common goal of growing stronger Thus business must continually develop and expand the market The scale ol the enterprise depends on the market share of the business market which in turn is dependent on the size of the market The larger the size of the market, the more chance for business development and vice versa So the market is both a re- evaluation criteria and the method of development tor business
In short a business opeartes in a market economy, where the market share and profit goals always come first the market plays a decisive role in the survival and development of enterprises, it 1s the survival environment in the present and the future
+ The Objective Inevitability of Market Expansion:
In the above sections, we have stated the importance of market to the extistence of a
business How can a business not only exist but also strongly and firmly grow in the market? The answers to this question are the main aim for every actively operated business in the world
+ The Role of Market Expansion:
The first thing you need to know about market expansion is that it Is not simply a term or a simple action but a lengthy, complex, time and money-consuming process Expanding market requires very a specific plan with the right direction, a reasonable policy, and effective solutions to be implemented in the long term on a continuously regular basis Thus it 1s seen as an important task in the business Market expansion work understood in a simple sense is a process that includes research, exploit and dominate the market in order to increase the size of the market which in turn increases the number of customers, revenue and profitability of the business In the end, the objective of any business in the economy ts profit profit depends business development which depends on market size This means expanding the market 1s both the target and an important mode of operation of any
business in the market economy
Trang 38( side ( s)
Strategic Management — Group 2
+ Expanding Market for Services is an Objective Factor:
All businesses conduct business in a certain time and with the goal of profit It 1s needed to be done via market channel and sales activities
As we all know the demand is very diverse but the demand for a certain goods/service is limited in a certain period of time while there are always fierce competitiors producing the same goods/service The business will have to find a way to win the most favorable conditions for sales
Therefore expanding the market ts the objective requirement for enterprises 1.1.6 NASOS Market Expansion is an Objective Factor:
Business activities in the manufacturing sector are continuously However a number of business activities in the field of oil spill response services have discontinuous nature but requires timely response at the time of demand
Because the oil spill response services market is a critical area, but the incident does not occur often, however the Government must be fully equipped with all the resources and these resources need to be located standby, ready to use immediately So if the resources are only in the standby and idle state, it will reduce the effective use of resources If the resources are not used and maintained frequently, when needed will easily cause troubles It is just like how human capital is wasted when not frequently being in contact with professional work Thus, efficient use of resources will be low Under these circumstances, the units should use the strengths of existing resources, specialized equipments to increase additional source of revenue and profit
However, with strong resources and support in the industry, the unit will "Expanding market in depth"
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1.2) Summary of the Rationales of NASOS’s Business Strategy
Strategic Management — Group 2
In Chapter | our group introduced
** Basic concepts in the tleld of oil spill response services,
oe
s* The current demand of port vessels in Vietnam in order to exploit and develop this business field of NASOS:
“* The strategies that the Center is aiming for based on the foundation of Company-level Stratezy:
s* The group of business activities expansion as well as expanding non- public services:
«* Theoretic rationale for planning implantation and evaluation of strategies, «* Analysis of steps of matrixes used to assessing the suitability of strategy In this topic, our group uses: External Factor Evaluation Matrix, Internal Factor Evaluation Matrix, McKinsey-GE, Competitive Protile Matrix, SWOT, SPACE, QSPM Matrix;
** Point out the absolute necessary of market expansion of NASOS as a long-term objective
In chapter I, we have systematized the theories on company-level strategy and building company-level strategy for a business In order to form a strategy, firstly, we need to analyse strengths, weaknesses in the internal environment and identify opportunities, threats from external environment of NASOS Based on that basis, IFE Matrix, EFE Matrix, CPM are established Assessing and evaluating expand business portfolios through Mc.Kinsey-GE Matrix in order to confirm the position of these activities In addition, SWOT Matrix and QSPM are used to select the most suitable strategies tor the portfolio These are important rationales for analyzing the current business activities in NASOS so as to propose expansion business portfolio and development strategies for NASOS in Chapter 2, also to suggest solutions to implement and strengthen NASOS‘s position in Chapter 3
Trang 40€ ;làj( xa F Strategic Management — Group 2 CHAPTER 2 ANALYSING THE CURRENT BUSINESS OPERATION AT NASOS
2.1 The Birth and the Development of NASOS — An Overview: 2.1.1 Overview of the Business Services:
2.1.1.1 Overview of NASOS
National Southern Oil spill response services (NASOS) was established under Decision No 2380/QD-BCN dated 30/08/2006 of the Ministry of Industry Center is under the direction of the National Committee for Search and Rescue with the main functions are to perform public tasks, provide oil spill response services on land and at sea in the Southern area (Binh Thuan to Ca Mau and KienGiang) Since its establishment, NASOS performs regular tasks of an regional Oil Spill Response Center and achieved good results in the implementation of basic construction investment to improve facilities and fulfill public tasks of a oil spill response services center under the direction of the National Committee for Search and Rescue
2.1.1.2 Overview of Oil spill response services
+ The Purposes of Oil spill response services:
Minimizing the harm caused by oil pollution in the operation of oil and gas industry on the environment and economy in Vietnam The plan focuses on response measures for mass volume of oil spill or oil spill with smaller volume but have the potentials to cause great harms to the environment