Building business strategy at hoa binh petroleum construction investment joint stock company PVCHB in period 2019 2023

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - TRẦN MINH VƯƠNG BUILDING BUSINESS STRATEGY AT HOA BINH PETROLEUM CONSTRUCTION AND INVESTMENT JOINT STOCK COMPANY (PVCHB) FOR 2019-2013 XÂY DỰNG CHIẾN LƯỢC KINH DOANH Ở CÔNG TY CỔ PHẦN ĐẦU TỪ XÂY LẮP DẦU KHÍ HỊA BÌNH - PVCHB TRONG GIAI ĐOẠN 2019-2023 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2020 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - TRẦN MINH VƯƠNG BUILDING BUSINESS STRATEGY AT HOA BINH PETROLEUM CONSTRUCTION AND INVESTMENT JOINT STOCK COMPANY (PVCHB) FOR 2019-2013 XÂY DỰNG CHIẾN LƯỢC KINH DOANH Ở CÔNG TY CỔ PHẦN ĐẦU TỪ XÂY LẮP DẦU KHÍ HỊA BÌNH - PVCHB TRONG GIAI ĐOẠN 2019-2023 Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS HOÀNG ANH TUẤN HÀ NỘI - 2020 UNDERTAKING I pledge that the dissertation "Building business strategy at Hoa Binh Petroleum Construction Investment Joint Stock Company - PVCHB in period 2019-2023" is my own research All content and results of the thesis are true and not published in any other study Data and figure are used in the thesis are correct and all sources are stated Hanoi, July 1st, 2019 AUTHOR TRAN MINH VUONG CATEGORY UNDERTAKING LIST OF ACRONYMS PREAMBLE 1 Subject name Reason for choosing topic Objectives of the study Object and scope of the study Research methods Source of research data Limitations of the thesis The composition of the thesis CHAPTER THE RATIONALE FOR DEVELOPING THE BUSINESS STRATEGY OF THE ENTERPRISE BUSINESS STRATEGY - DEFINITION, ROLE, PROPERTY AND TASKS 1.1 Define 1.2 The role of business strategy 1.3 Basic characteristics of business strategy 2.1 Vision and mission 2.1.1 Vision 2.1.2 Mission 2.2 Environmental analysis 2.2.1 Analysis of external environment 2.2.1.1 Macro-environmental analysis 2.2.1.2 Sectoral Environmental Analysis 11 2.2.2 Internal environmental analysis 15 2.2.3 Value Chain 17 2.2.4 Identify outstanding competencies and sustainable competitive advantage 19 2.3 Strategic options 20 STRATEGIC ANALYSIS TOOLS 20 3.1 SWOT analysis matrix 20 3.2 GREAT model 22 BASIC TRADING STRATEGY 22 4.1 Strategic basis 22 4.2 Types of general competition strategies 24 4.2.2 Differentiation strategies 25 4.2.4 Incorporate common strategies 26 CHAPTER II ANALYSIS OF BUSINESS ENVIRONMENT OF HOA BINH PETROLEUM CONSTRUCTION AND INVESTMENT JOINT STOCK COMPANY (PVCHB) 28 GENERAL INTRODUCTION 28 1.1 General information 28 1.2 The formation and development of PVCHB 29 1.3 Organizational structure and main business lines 31 1.4 Main business lines 32 1.5 Characteristics of the oil and gas construction sector 32 ANALYSIS OF FACTORS IMPROVING PVCHB 33 2.1 Macro Elements - PEST Model 33 2.1.1 Political and legal factors (P) 33 2.1.2 Economic factor (E) 34 2.1.3 Social cultural factor (S) 37 2.1.4 Technological factor (T) 37 2.2 Sectoral Environmental Analysis 39 2.2.1 Current competitors 40 2.2.2 Potential competitors 42 2.2.3 The power of the customer 43 2.2.4 Power of the supplier 44 2.2.5 Threat of alternative products or services 45 2.2.6 Evaluating opportunities and challenges 45 2.3 Analyze the internal factors 46 2.3.1 Analysis of resources 46 2.3.2 Assess the strengths and weaknesses of PVCHB 58 2.3.4 Synthesis assesses strengths and weaknesses of PVCHB 63 CHAPTER III SELECTION OF TRADING STRATEGIES AND SOLUTIONS FOR THE IMPLEMENTATION OF THE STRATEGY FOR 2019 - 2023 65 GENERAL OBJECTIVES OF PVCHB 65 1.1 Vision and mission 65 1.2 General objective to 2023: 65 OPTIONS OF PVCHB TRADING STRATEGY 67 3.1 GROUP IMPLEMENTATION STRATEGY 73 3.1.1 Solutions on science and technology 73 3.1.2 Solutions on Organization and management and development of human resources 73 3.2 Strategy implementation team 79 SOME LIMITATIONS AND CONCLUSIONS 82 CONCLUDE 83 REFERENCES LIST OF ACRONYMS ACRONYM MEANING CPI Consumer Price Index FDI Foreign Direct Investment GDP Gross Domestic Product KPI’s Key performance Indicators ODA Official development assistance PVC Petrovietnam Construction Joint Stock Corporation Hoa Binh Petroleum Construction and Investment Joint Stock PVCHB Company Vinaconex-PVC Construction Investment Joint Stock PVC-Vinaconex Company PVNC PetroVietnam Nghe An Construction Joint Stock Company PVC-HN Ha Noi Petroleum Construction Joint Stock Company LIST OF DIAGRAMS AND TABLES Diagram 1-1: The process of building a business strategy Diagram 1-2: Model of the competitive force of M.Porter 11 Diagram 1- 3: Diagram chuỗi giá trị (value chain): 18 Table 1- 2: Process of recognition of sustainable competitive advantage 19 Diagram 2- 1: Organizational structure of PVCHB 31 Table - 1: Vietnam’s GDP in the period 2008-2017 35 Table 2-2: Some business indicators of PVCHB compared with some competitors in 2018 41 Chart 2-2: Market share of construction companies in 2018 42 Table 2-2: Opportunities and challenges of PVCHB 45 Table 2- 3: Results of implementation of some operational indicators for the period 2016 - 2018 47 Table 2-5: Business results of PVCHB 51 Table 2-6: Statistics table of construction equipment 54 Table 2- 7: Summarize the evaluation results of the external expert group 61 Table 2-8: Summarize the results of the internal review team 62 Table 2- 9: Analyzes table strengths and weaknesses of PVCHB 64 Table 3-1: SWOT analysis matrix 70 Table 3-2: Choosing the optimal strategy - GREAT model 72 PREAMBLE Subject name Thesis title "Building Business Strategy in Hoa Binh Petroleum Construction and Investment Joint Stock Company (PVCHB) for 2019-2023" Reason for choosing topic After opening up and integrating into the economy, Vietnam has achieved some important achievements, the basic overview maintains macroeconomic stability, maintaining a relatively high economic growth rate, the size of the economy increased To achieve the overall objective of economic development in the five years of 2018-2022, to achieve rapid and sustainable economic development and create a foundation for the country to become a modern industrial country by 2030 The average economic growth rate of 2018-2022 is expected to be 7.0-7.5% In which, the average value added of industry and construction increased by 7.8-8%, and the construction industry structure accounted for 42% In the strategy, objectives and tasks of economic development in the next years, we see the very important role of the industry - construction with the structure of 42%, which is one of the key areas for deciding to the success of the plan To gradually realize the position and leading role of the industry construction contributes to the common development; Every organization, economic sector, economic groups and enterprises must have strategies in line with the trend of integration and the development of the market Due to the increasing compettion of current and potential competitors, the company’s business activities show signs of moving sideways and cannot develop Starting out from that practice, building a business strategy is essential for every business It helps enterprises have clear business direction and objectives, directing departments and individuals to the common objectives of the enterprise, avoiding the local situation, dispersing resources will weaken the business Today's business environment is changing so rapidly, global competition requires businesses to be proactive, creative to adapt to change In order to develop fast, Strategic groups formed to exploit strengths, utilize SO opportunities, overcome weaknesses to take advantage of WO opportunities, develop strengths to reduce ST risk, overcoming difficulties to overcome the WT challenge From that, draw the basic strategies that the Company can consider and choose strategic options for PVCHB Strategy 1: Product Differentiation Strategy This strategy is implemented by focusing on product quality, application of technological solutions, machinery and equipment together with active quality human resources and synchronous implementation process To always exceed the progress, safety, high quality effective Strategy 2: Strategic focus on exploiting existing market share Based on the advantages, credibility, availability and trust of traditional partners Improve the products to meet the needs of traditional partners, partners familiar, strategic company Strategy 3: Low-cost focus strategy To propose optimal solutions and measures, apply new technologies and scientific technologies suitable to each product project, reduce indirect costs, save resources to reduce the cost of production To ensure the competitiveness of the market To choose the strategy for our company we use the GREAT analysis model then select the optimal business strategy for the company Weighting methods and factors of importance for the Company include factors: Benefits, Risk, Expense, Achievable and reasonable time) Points are calculated from to according to 71 the following evaluation table Table 3-2: Choosing the optimal strategy - GREAT model Strategy Evaluation NO Strategy Strategy Weight Criteria Evaluate Result Evaluate Result Evaluate Result Benefit 0,3 1,5 1,5 0,6 Risk 0,15 0,45 0,6 0,45 Cost 0,2 0,8 0,6 0,6 Feasibility 0,25 1,25 1,0 1,0 Time 0,1 0,4 0,3 0,4 Total 1,00 4,4 3,05 (Source: Own calculations based on consultation with industry experts) The best business strategy for PVCHB is Strategy and Strategy This shows that PVCHB is profitable for the construction of the projects, ensuring the progress, security high quality, high efficiency Besides, the unit has been trusted by traditional partners, help and appreciation Based on comparative measures to choose the best strategy for the two strategies for business development of the business On the basis of comparison with competitors, on the needs of traditional partners We can see that strategy is the most optimal of the two Because of the great attraction from new products, creating an exclusive position in the market, the best product quality changes positively in the eyes of partners, potential customers will choose their products for their works Giong forward will attract many new partners, contributing to 72 improving the sales of the company Attracting talented people and a stable source of revenue STRATEGIES FOR IMPLEMENTING STRATEGIES AND IMPLEMENTATION PLANS 3.1 Group implementation strategy 3.1.1 Solutions on science and technology Application of advanced project management technology, production management Developing quality management tools as well as overall solutions to improve labor efficiency, step by step using management software To build a contingent of managerial officials and technical workers of high professional qualifications capable of applying and adopting modern and advanced technologies at regional and international levels Construction management system ISO 9001-2008 To update advanced and modern technologies in the world and in the region in the field of construction of works in service of the oil and gas industry and civil construction works 3.1.2 Solutions on Organization and management and development of human resources Organization and management Complete internal management procedures and procedures Bring the leadership team throughout the company 73 Continuous improvement of management approach towards "compact, light and intensive" in order to improve labor productivity, improve business efficiency of the company Reviewing, analyzing and evaluating the operation model of PVCHB to get specific solutions to perfect the operation model to suit each development stage to bring PVCHB to sustainable development On personnel management Strategic human resource management is designed to improve the company's management and technical skills and technical skills to meet the strategic objectives of the Company Improve the management mechanism and effective use of available human resources of the company Strengthening the mechanism of decentralization, raising personal responsibility Develop a standardized process in the recruitment and management of personnel combining recruitment, training and employment Develop job descriptions and system of job title standards for each position from management level to professional staff, reflecting the content of work; Identify and document the content of the job for each position, stating key activities, job evaluation standards, capacity, minimum educational requirements, and reporting channels Develop a process for evaluating work results in accordance with job descriptions (KPI's) Regime of treatment 74 Establishment of the right remuneration system for labor and employment in the right place through the application of KPIs in operation and the method of allocating operating costs From there, wage structure is calculated based on labor productivity Only consider those who have overall job performance evaluations better than required Evaluate those who are promoted on the basis of considering the specific requirements of the job description About the training Training needs must be defined in a strategic orientation, based on actual needs for staff standardization and staffing Develop external training and self-training for staff Organizing short-term training, supplementing skills for regular workers, training to improve the quality of management and administration of work Provide guidance for testing, inspection and certification Each training course and post-training management Build an enterprise into a learning organization, an open working environment to create a good working environment that is capable of retaining and attracting talents Training and improving the capacity of the staff from managers to direct staff to be able to undertake all phases of investment projects, from initial preparation work investment and completion of projects in accordance with the order of the State; Achieve reasonable financial resources for human resource development, 75 budgeting for annual training 3.1.3 Solutions to improve and improve the financial management process Develop a financial management mechanism that is appropriate to the strategic plan in order to effectively manage the material resources of the Company in each phase of the strategy In which to focus on several points to improve the efficiency of using capital such as: Improve the efficiency of using capital by measures such as investment in each stage according to market demand Take revenue from depreciation, profit for investment development, maximize the capacity of investment projects Closely control the debt of customers, reduce the outstanding debt overdue This not only improves the efficiency of capital use but also minimizes risks Have a financial policy priority for the field of marketing activities Improve the financial management mechanism to teams and production groups in association with the contracting mechanism in order to raise personal and collective responsibility, increase labor productivity, reduce intermediary management costs, lower prices into the product Set up a spending plan for each project to efficiently allocate funds Strict management of input costs, the cost of enterprise management, revenue boost to the company to achieve more profit Make plans to list shares on the stock exchange in Vietnam Seeking to attract strategic shareholders with financial capability, experience suitable with the business production of the company 3.1.4 Solutions for improving the capacity of construction equipment To formulate new investment projects for a number of important machinery and equipment so as to raise the capability to meet the construction of projects 76 with high technical requirements Reassess the entire capacity of the existing machinery and equipment, then propose upgrading, repairing and replacing it for proper use in construction works of a particular nature Partnerships with strategic partners to coordinate the use of force equipment of the parties help to save costs to speed up the construction progress 77 Strategic Implementation Plan Solutions Expense (million dong) - Solutions on science and technology - Solutions on Organization and management and development of human resources - Solutions to improve and improve the process of financial management Solutions for improving the capacity of construction equipment Evaluation Criteria Completion time Report of the General Director on the plan of implementation and results of application to the Board for approval November 2018 Producer 1.000 - Board of Directors 1.000 As required by the business plan, the functional Board of Management departments propose the demand for human resources September 2018 Board of Directors General Director submits to the Board of Directors for approval 500 Board of General Classify evaluation criteria, develop implementation Directors, Chief plans, hire consultants, evaluate management September 2018 Accountant procedures capital, cost, implementation measures 20.000 Board of Directors, Planning the list, type of machinery and equipment to General Director invest 78 June 2018 3.2 Strategy implementation team PVCHB has gained a considerable market share in the field of construction of oil and gas projects on the northern bank PVCHB is a company with core competence in providing infrastructure construction services The management of projects ensures quality, safety and efficiency for the developers The company works are the investors in the oil industry highly appreciated and look forward to long-term cooperation with the Company Therefore, in order to maintain and develop the market share of construction with existing partners, the company needs to ensure the prestige of product quality for customers In addition, it is necessary to regularly apply high technology sciences Construction capacity decreases the cost of management to create competition with competitors 3.2.1 Strategy implementation solution Carry out the current customer care policy throughout the implementation of the project from the preparation, implementation, completion and maintenance of the facility Establishing Marketing Solutions Group to promote PVCHB's image, position and prestige with partners In a more competitive environment, the demand for image promotion and branding is becoming increasingly important It is necessary to pay attention and invest in depth in marketing, information and propaganda Therefore, PVCHB brand is more and more trusted by the traditional partners and affiliated with the company is also an information channel for potential customers to know and choose To set up specialized sections to carry out repairs and maintenance works This department will actively carry out its work to help customers feel 79 comfortable and always have a comfortable style is the process, professional and effective implementation Complete the process of management, management and control all stages during the construction process Minimize management costs, improve the quality of the market, shorten the progress, ensure the effectiveness and efficiency of customers 80 Strategy implementation plan Solutions Customer Care Policy Solution Marketing Solutions Improve management capacity, improve the quality, technical process, progress, safety, reduce costs to create advantages to compete Expense (million dong) Producer Evaluation Criteria Completion time 500 Board of department The Board of Directors will approve service the plan and control the implementation of the approved plan, the feedback of the customer Annual 500 The Board of Directors develops Prestige, trust of customers, image and the criteria and selects the brand The company is widely implementing units promoted Annual 500 Quality standards, practical Board of Directors, Functional implementation of works, feedback Division from customers Annual Directors, 81 SOME LIMITATIONS AND CONCLUSIONS The business strategy research is limited to construction and selection for the construction and installation of onshore infrastructure works in the oil industry and specifically the operation of PVCHB Within the limits of research, the writer has the basis of theory of business strategy of the enterprise, then analyze the physical environment of Hoa Binh Petroleum Construction Joint Stock Company, set out the strategy , strategic implementation solutions in the period from 2019 to 2023 PVCHB company with main business is the construction and installation of works, the main market share in the oil industry Therefore, the research of the business strategy of the Company is very important for the Company to have a specific view on the capacity, market share, competitors, directions and solutions to help the company maintain The expansion of the market share in construction works both inside and outside the oil industry Although the author has made efforts to study and learn from the proposed strategies for business, however, limited research limitations Therefore, the formulation and selection of business strategies must be carefully assessed and evaluated in the course of implementing the strategy so as to have solutions to overcome in time the limitations so that the strategy is finalized and high feasibility 82 CONCLUDE Business strategy is very important for the existence and development of enterprises in general and for the operation of PVCHB in particular Without a competitive business strategy, businesses can hardly survive and build up a firm and long-standing position in the market Identifying and selecting the inappropriate or inaccurate competitive strategy will divert the business activities of the business, make it difficult to adapt to market changes and can not develop sustainably Through the analysis of the macro environment and industry environment in the main activity is construction and construction to draw opportunities that can be taken advantage of, the challenges that PVCHB must overcome; Especially with an in-depth analysis of the internal factors to draw on the strengths that can be promoted in the strong competitive environment of the industry and the weaknesses that need to be overcome during the operation of PVCHB Since then, the writer has applied some modern strategic management models to identify, build and select business strategies in line with the reality of PVCHB in the field of construction in the period 2019 - 2023 Based on the selected strategies, the writer has taken the solutions and plans to execute the business strategy that has been developed and selected I hope my researches can contribute to the development and development of PVCHB I believe, the above solutions if applied uniformly, effectively; PVCHB will accomplish the strategic objectives set for 2019-2023 83 In order to obtain this research result during the course of my Master's Degree in Business Administration, I always receive the kind advice of teachers who are professors, Ph.D.s in Faculty, Teachers research guide; I look forward to continuing to receive the attention of the teachers, the opinions of the Board to complete the topic to improve and contribute to the development and development of PVCHB We would like to express our sincere thanks to the Board of Directors, teachers and staffs of the Faculty of Business Administration - Hanoi National University for always providing the best learning environment for me to complete into the course Thank you very much! 84 REFERENCES Fred R David, Strategic Management, Statistical Publishing House Assoc Le The Gioi; Dr Nguyen Thanh Liem; MSc Tran Huu Hai, Strategic Management - Statistical Publishing House (2016) National Economics University - Editors: Assoc Ngo Kim Thanh, Strategic Management Textbook - National Economics University Press (2017) Course materials MBA program - Faculty of Business Administration National University of Hanoi Fred R David, Strategic Management (Concept and Case) The Van (2006), Win big customer, Encyclopedic dictionary Publisher 7.Ministry of Commerce (2004), Basic knowledge of international economic integration, Training materials, Hanoi Tony Busan (2007), Mind Mapping at Work, Labor – Society Publisher Al Ries (2006), Origin of Brand, Knowledge Publisher 10 Phillip Kotler (2006), Marketing Insights from A to Z, Young Publisher 11 James R Gregory (2004), Strong and Successful Branding, Statistical Publisher 12 Jack Trout (2004), Wisdom of a God, Statistical Publisher 13 Peter S.Rose, Corporate Governance of Commercial Banks - Financial Publishing House (2004) 14 Internal information of Petrovietnam Construction Joint Stock Corporation and Vietnam Oil and Gas Corporation 15 Information on the economic, social, banking on the Internet 85 ... KHOA HỌC: TS HOÀNG ANH TUẤN HÀ NỘI - 2020 UNDERTAKING I pledge that the dissertation "Building business strategy at Hoa Binh Petroleum Construction Investment Joint Stock Company - PVCHB in period. .. QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - TRẦN MINH VƯƠNG BUILDING BUSINESS STRATEGY AT HOA BINH PETROLEUM CONSTRUCTION AND INVESTMENT JOINT STOCK COMPANY (PVCHB) FOR 2019- 2013 XÂY... ANALYSIS OF BUSINESS ENVIRONMENT OF HOA BINH PETROLEUM CONSTRUCTION AND INVESTMENT JOINT STOCK COMPANY (PVCHB) GENERAL INTRODUCTION 1.1 General information Company name: HOA BINH PETROLEUM CONSTRUCTION