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MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF TRANSPORT AND COMMUNICATIONS PHAM QUANG TU RESEARCH ON BUILDING DEVELOPMENT STRATEGIES FOR SAI GON RAILWAY TRANSPORT JOINT STOCK COMPANY Major: Transport Organization and Management Code: 9.84.01.03 SUMMARY OF PHD THESIS IN ECONOMICS HANOI - 2020 Institution: UNIVERSITY OF TRANSPORT AND COMMUNICATIONS Supervisor: Prof.Dr.Sc Nguyen Huu Ha Assoc.Prof.Ph.Dr Nguyen Thi Hong Hanh rof Dr Nguyen Thi Hong Hanh Opponent 1: Prof.Ph.Dr Bui Xuan Phong Opponent 2: Assoc.Prof.Ph.Dr Do Huu Tung Opponent 3: Dr Tran Minh Phuong The dissertation is defended before the Dissertation Appraisal Council with meeting at University of Transport and Communications at dated 20 The dissertation is available at: - National Library of Vietnam - Information & Library Center, University of Transport and Communications PREAMBLE Rationale Sai Gon Railway Transport Joint Stock Company (SARATRANS) has operated under the model of joint stock company In the equitization context, it is essential to formulate Development Strategy for railway transport company: Firstly, from approval of the Development Strategy of Vietnam Railway Industry, no railway transport enterprise has had Development Strategy; Secondly, due to change of the owners of Railway Transport Enterprises, “new owners” need new Development Strategy for their enterprise; Thirdly, the production and business of the railway transport industry is facing many difficulties in decrease of output, revenue, and market share, thus, enterprises need to seek the right direction by strategic direction Therefore, it is essential to research and formulate the Development Strategy of Vietnam Railway Transport Enterprises, including SARATRANS, meeting the needs of practice and scientific research Research Objectives The research purpose of the dissertation is to propose the SARATRANS Development Strategy for the period up to 2025, with a vision to 2030 Specific targets: Continue to study, supplement and clarify the theoretical basis for the formulation of the Development Strategy for equitized railway transport enterprise; make full, objective and science- based analysis and assessment of the production and business environment of SARATRANS; propose to select SARATRANS Development Strategy up to 2025, with a vision to 2030 Objects of Research The object of the dissertation research is issues related to the formulation of the Development Strategy of Vietnam and the world railway transport enterprises Scope of Research Content: The dissertation focuses on researching basic scientific arguments to develop the Railway Transport Enterprise Development Strategy Space: The dissertation focuses on researching and formulating the Development Strategy of SARATRANS associated with the operating environment and the context of new joint stock enterprises in the current environment Time: The dissertation assesses the current status of environmental factors in the period 2016-2019; build a scientific foundation to define the Development Strategy of SARATRANS and propose solutions to implement the strategy for the period until 2025 with orientation to 2030 Research question The theoretical basis for the formulation of the Development Strategy of the Railway Transport Enterprise still has issues to be clarified, supplemented and improved to suit the current production and business environment What are the principles, the grounds? What are the order and content of Enterprise Development Strategy formulation steps? What are the appropriate methods and tools to formulate Development Strategy? How is the production and business environment of the Company in the research period? What is the basis of the proposed Development Strategy for SARATRANS? Research Methods On the basis of the methodology of dialectical materialism and historical materialism, the dissertation uses some of the following main methods: Inheritance method; Qualitative method; Document research method applied for scientific works, published theoretical basis on Development Strategy of domestic and foreign authors; Statistical - comparison method; Methods of analysis - synthesis; Oriented Research method Sample investigation and professional method: Investigations, surveys and consultation with experts is implemented in phases in 2017, 2019 and 2020, with the following subjects: Leaders of all levels of SARATRANS (from deputy head of department and equivalent at the branch level upwards, directly related experts; representative of SARATRANS owner; leadership representatives, specialists of departments under Vietnam Railways Corporation; representatives of the company leaders, departments of Hanoi Railway Transport Joint Stock Company Total: 145 people This number is enough to ensure objectivity and reliability Scientific and practical significance * Theory: The thesis systematized, deepened and developed the theoretical basis for building development strategies for railway transport enterprises in the context of equalization, including: The concept of enterprise development strategy; principles, bases, processes, strategic level and component strategies, principles of sustainable development; technology application fields in the direction of Industry Revolution 4.0, scientific methods and tools in assessing the current situation, research on building development strategy for railway transport enterprises * Practice: The practical implication of the thesis is shown in that: - The thesis analysed and evaluated the status of development strategy building and the operating environment of the railway transport enterprises and SARATRANS, showing the achieved results, shortcomings and limitations in development strategy building as well as the main opportunities and risks of the external environment affecting the operation of enterprises, strengths and weaknesses of enterprises - Propose development strategy for SARATRANS and selected development strategy building implementation solutions which is scientific, reliable and feasible, suitable with SARATRANS in the context of transferring from state-owned enterprises, dependent accounting to joint-stock enterprises, is still heavily "subsidized" - Scientific arguments to develop development strategies and research results of the thesis will also be a positive reference for the railway transport Dissertation structure In addition to the introduction, the conclusion, the list of references and attached appendices, the dissertation is divided into chapters: Chapter 1: Overview of domestic and foreign research issues Chapter 2: Theoretical basis for the formulation of development strategy of enterprises Chapter 3: Analysis and assessment of the current situation of Saigon Railway Transport Joint Stock Company in the period of 2016 - 2019 Chapter 4: Build development strategy of Saigon Railway Transport Joint Stock Company Chapter 1: OVERVIEW OF RESEARCH WORKS RELATED TO THE DISSERTATION TOPIC 1.1 Overview of research issues on overseas development strategy In the world, there are many researches on methods to analyze and plan strategy With different perspectives and approaches, there have been many different results Today, strategy development in the world continues to be perfected in theoretical basis with the application of advanced technologies Typically, in the studies of the authors: Clausewitz C, Chandler, Quinn, Bruce D., Michael Porter, Johnson and Scholes, Kenichi Ohmae 1.2 Overview of research issues on domestic strategy In Vietnam, there have been many studies on formulation of the Development Strategy, many of them have been widely published in textbooks, scientific research, in published scientific studies A system of common theoretical bases has been formed for Enterprises and for a number of Enterprises in different fields Currently, research to develop theoretical basis for the Development Strategy in the country is being promoted Typically, in the studies of the authors: Phan Huy Le The, Nguyen Thanh Do, Nguyen Ngoc Huyen, Nghiem Van Dinh, Nguyen Huu Ha, Tu Sy Sua, Bui Xuan Phong The above studies are valuable experiences for the author to continue to perfect the research on formulating Development Strategy for SARATRANS 1.3 Research gap - There is no consensus on methods as well as process on develop strategy for enterprises - For different Enterprises, the structure, composition, names of the components of strategy may be different - In the field of railway transport, there have been some related researches, but mainly the production and business strategy of the railway transport enterprise in the period of state enterprise In terms of equitization in 2016, there is no research on the formulation of Railway Transport Enterprise Development Strategy; - In the building Development Strategy, methods, tools, processes have not been used to develop modern and scientific Development Strategy 1.4 Determination of the problem to be solved in the dissertation Up to now, there has not been any study directly mentioning the formulation of Development Strategy from the perspective of an equitized Vietnam Railway Transport Enterprise, thus, theoretical basis for the formulation of the Railway Transport Enterprise Development Strategy in the equitization period should be studied, in which a specific object is Saigon Railway Transport Joint Stock Company 1.5 Basic tasks to be solved Continue to research, systematize and deepen the theoretical basis to apply formulation of the Development Strategy for railway transport enterprises, including: Principles, bases, sequence, criteria and calculation methods Study experience in formulate the Development Strategy Analyze environment to clarify opportunities and challenges SARATRANS on all aspects, aimed at pointing out strengths and weaknesses Combine opportunities and challenges with strengths and weaknesses to form strategic scenarios for SARATRANS Select the optimal Development Strategy and propose solutions to implement the selected Development Strategy 1.6 Framework of research theory Research on factors affecting production and business activities of enterprises: Factors on macro, micro and internal environment Study, analyze and evaluate the impact of external factors on factors within the internal environment of SARATRANS Use modern tools and methods to evaluate, formulate, and select the optimal development strategy for SARATRANS; propose solutions to the proposed strategy 1.7 Research Process Step 1: Study related works points out gaps and tasks Step 2: Study on the rationale of the strategy, specifically applied to SARATRANS Step 3: Assess the current status of internal and external environmental factors in the enterprise, determine the impact trend, strengths and weaknesses in its operations Step 4: Use appropriate tools to formulate and propose the optimal development strategy for SARATRANS Propose the main solutions to successfully implement the developed development strategy Chapter 2: THEORETICAL BASIS FOR THE FORMULATION OF DEVELOPMENT STRATEGY OF ENTERPRISES 2.1 Overview of enterprise development strategy 2.1.1 Concept of Enterprise development strategy General concept of enterprise development strategy: “Strategy is the careful search for an action plan to develop and combine the organization’s competitive advantages; The differences between you and your competitors are the basis of your advantage” Or "Strategy is the creation of a unique value proposition consisting of differentiated activities" Concept of Enterprise development: “Enterprise development is a process that requires enterprises to improve in many aspects and in comprehensive way in three main areas: production, business, contribution to society and environmental protection ” Definition of corporate development strategy: The Enterprise Development Strategy is a general action program aimed at the realization of the objectives of the Company, a system of general goals and major objectives, major development orientations in areas of business activities, optimally combining social development and environmental protection, basic solutions to organizational structure, operating mechanism for all activities of the enterprise, solutions to mobilizing, distributing and efficiently using development resources, and measures for organizing the implementation of the Development Strategy 2.1.2 Role of development strategy Development Strategy helps enterprises: Clearly orient in the long term; is a solid basis for the implementation of operational activities; seize and take advantage of opportunities, and take proactive measures to deal with threats and threats; improve efficiency in use of resources, enhance the position of the enterprise, ensure sustainable development for enterprises 2.1.3 Basic characteristics of development strategy The Development Strategy often defines the basic directions and objectives of the Enterprise in each period; ensure maximum mobilization and combination of exploitation and use of enterprise’s core resources and competencies, promote advantages and seize opportunities to gain dominance in the market, built for a a relatively long period, over years; but tends to shorten depending on the enterprise 2.1.4 Basic attributes of development strategy include: (1) Totality; (2) Purpose; (3) Space and time; (4) Substantial change 2.1.5 Benefits of development strategy: Development Strategy shows the synthesis of long-term goals of the Company; align short-term goals in the long-term context; contribute to ensuring the unity and orientation of the business activities; Help enterprises seize opportunities and create a competitive position 2.2 The scientific basis for build development strategy of enterprises 2.2.1 Objective inevitability for building development strategy for enterprises Enterprises were equitized, have organizational changes, changes on production and business processes , which requires the formulation of the Development Strategy to meet the new era 2.2.2 Requirements upon building of the Development Strategy of enterprises The Strategy for Enterprise Development must comply with the guidelines and policies of the Party and State, adhere to the strategies and plans of the industry, and need to properly identify opportunities and risks from the environmental factors and properly assess the strengths and weaknesses of the enterprise 2.3 Strategy building tools 2.3.1 Model of enterprise environmental analysis EFE - External Factors Assessment Matrix: According to the form in Table 2.1, it is a tool to assess, synthesize and summarize the main opportunities and risks of the external environment affecting the operation of the enterprise Table 2.1: The EFE matrix sample table evaluates the lateral factors Major external factors … Total points Classification important level … Classification: Responsiveness … Score calculation … Sources: Quantri.vn To form an EFE matrix, it takes steps Matrix of internal factor evaluation - IFE: According to the form in Table 2.4, it is a tool to assess strengths, weaknesses and importance of functional parts of the enterprise To form an IEF matrix, it takes steps similar to matrix evaluating external factors Table 2.4: Sample table on Matrix of internal factor evaluation - IFE: Major internal factors … Total points Classification important level … Classification: strong, weak … Score calculation … Sources: Quantri.vn In order to build matrices to evaluate external and internal factors, the core issue is to build a method of weighting in a scientific manner and consistent with the characteristics of the enterprise; The dissertation proposes the following weighting method: Weighted classification method: Set up a sample survey to assess the response level, the response level or the influence level of external factors After having the evaluation results, calculate the ratio of each factor Y for each type of reaction Then the average number of weights is calculated by the formula: 𝑓(𝑥) = 𝑋 𝑐 𝑘 𝑐 +𝑋 𝑑 𝑘𝑑 + 𝑋 𝑒 𝑘𝑒 +𝑋 𝑓 𝑘𝑓 ∑𝑥 (2.3) In which: 𝑓(𝑖)is the average of the weights of the ith factor; X is the number of opinions evaluating factor i in column (c, d, e, f); k is the response coefficient in the corresponding column, k = in column C, equal to in column D, equal to in column E and equal to in column F; 𝑓(𝑖)is the average of the weights of the ith factor; X is the number of opinions evaluating factor i in the column (c,d,e,f); k is the response coefficient in the corresponding column, k = in column C, equal to in column D, equal to in column E and equal to in column F; ∑x is the total number of collumns After calculating, proceed to round up to or above 0.5, round up, below round down 2.3.2 Model to build strategic plans SWOT matrix: is the most widely recognized tool for shaping strategic directions The author uses this matrix to define the focus and direction for the SARATRANS Development Strategy BCG Matrix (Boston Consulting Group): Figure 2.2 is a classic business model considering two factors of market growth and market share Locate the Enterprise's products Relative market share in the industry High Medium Low High STARS QUESTION MARKS CASH COWS DOGS Relative market share in the industry Sources: Quantri.vn Figure 2.2: BCG matrix (Boston Consulting Group) 2.3.3 Optimal strategy selection model Quantifiable Strategic Planning Matrix - QSPM A matrix that uses input data from the analysis in the steps of forming IFE and EFE matrices, helping to make a decision to choose a Development Strategy to successfully implement its goals 2.3.4 Method of forecasting output and revenue of railway transport enterprises Prediction is a difficult, complicated activity, very difficult to accurately So it is necessary to use a forecasting tool The forecasting tools are divided into two categories: Qualitative and quantitative techniques Usually use the following methods: (1) Forecast model by regression method (forecasting based on trend), using linear regression method: y = a.x +b (2.3) (2) Forecast model by exponential leveling method with general formula: Yt+1 = 𝛼 ∑𝑛𝑖=1 𝛾 𝑖 𝑦𝑡−𝑖 + 𝛾 𝑖+1 𝑌𝑡−1 (2.4) (3) Forecast model according to the trend function and seasonal fluctuation: Yi = Y + tv + bt (2.5) (4) Forecast method based on average growth rate, Forecast model: Yn+L = yn* 𝛼 ∑𝑛𝑖=1 𝛾 𝑖 𝑦𝑡−𝑖 + 𝛾 𝑖+1 𝑌𝑡−1 (2.4) Proposing method of forecasting output and revenue of railway transport enterprises Up to now, due to the erratic changes in revenue output of railway transport enterprises, the calculated results according to formulas 2.3, 2.4, 2.5 are often inconsistent Therefore, the author proposes the forecasting method as follows: (1) Study the context of the strategic stage (2), Grasp the subjective will, the desires of the leaders, the owners on the goals, targets (3), By the quantitative method as outlined in subsection 2.3.4, (4), Calculating the growth rate of railway transport volume and revenue years preceding the year, (5), Compiling all steps to decision 2.4 Railway Transport Enterprise and build Development strategic 2.4.1 Characteristics of railway transport Distinctive characteristics: Technology of Railway transport needs to simultaneously participation (in over: 2.1, 2.2 2.3) and close and smooth coordination of many specialties in train operation; highly specialized, for private use only 2.4.2 Principles of building for the Development Strategy of railway transport enterprises Principle 1: The strategy must ensure continuity and inheritance; loyalty to the core competencies of the Enterprise Principle 2: The strategy must be systematic, comprehensive and clear Principle 3: The strategy must ensure the science, must identify the premises and the bases on the strategy development Principle 4: Principles of sustainable development of Railway Transport Enterprises In addition to the profit target, the operation of the Enterprise must ensure its long-term existence and development The author proposes contents of principles for sustainable development of railway transport enterprises Principle 5: Principles of building new products of the Railway Transport Enterprise 11 of social and environmental issues, strategies for human resource development, and strategies for science and technology development 2.4.8 Basics of the Enterprise Development Strategy for Railway Transport Development Strategy usually includes the following key items: Bases for building strategy, strategic objectives, strategic plans, implementation solutions 2.4.9 Process and content of building for the Development Strategy of Railway Transport Enterprise The author proposes the process and content of building for the Development Strategy including the following steps: Define mission and strategic vision; analysis, assessment and forecast of the operating environment; study of the views, desires, opinions owners, leaders; confirms the current position and defines the goals of the business; formulating strategic plans; decide on the optimal strategic plan and organize the implementation of the strategy 2.5 Propose a model to measure the relationship of the establishment of the Development Strategy with the implementation of the Railway Transport Enterprise Development Strategy 2.5.1 Environmental factors - The basis for the development of railway transport enterprises Consists of 11 external environmental factors and internal elements 2.5.2 A model to measure the relationship of the builder with the implementation of the railway transport enterprise development strategy There has not been any research on measuring the relationship between the establishment of the Development Strategy to the enforcement of the Railway Transport Enterprise Development Strategy Quantifying this relationship will help the Enterprise Development Strategy to have higher quality and more enforcement The author has built a research model and used the scale and research sample The research scale uses expert methods through surveys and surveys (selected from appendix 1,2,3 attached to the dissertation) to select specific scales Using the correlation coefficient Cronbach's Alpha (Cronbach's Coefficient Alpha) to evaluate the reliability and value of the scale The reliability of a measurement is the degree to which random error is avoided 2.6 Some experience in building Vietnamese Enterprise Development Strategies (1) Innovate strategy and Consider the strategy building as one of the top tasks (2) Formulation of the Development Strategy must follow the set orientations, visions and objectives (3) The content of the corporate development strategy must be built on the identification and correct understanding of customers, keeping connection with the long-term vision (4) Must adapt to the market needs as well as the individual capacity of each enterprise 12 Chapter 3: ANALYSIS AND ASSESSMENT OF THE CURRENT SITUATION OF SAIGON RAILWAY TRANSPORT JOINT STOCK COMPANY IN THE PERIOD OF 2016 - 2019 3.1 Overview of Vietnam Railways Corporation 3.1.1 Outline of formation and development In 1955, the Prime Minister signed a decision to establish Vietnam Railway Authority, changed to Vietnam Railway Union in 1990, established Vietnam Railways Corporation in 2003, and changed VIETNAM RAILWAYS CORPORATION to be one member limited company in 2010 Head office: 118 Le Duan Street, Hoan Kiem District, Ha Hoi City Charter capital: VND 2,268 billion 3.1.2 Business lines of Vietnam Railways Corporation Business of railway transportation, domestic and international multimodal transport; management, exploitation, maintenance and repair, sales of the national railway infrastructure system; operation of railway transportation; consulting, design, manufacturing, construction and repair of vehicles 3.1.3 Functions and duties of Vietnam Railways Corporation Exercise the rights of owner in accordance with the law, operate the transportation; develop, manage and direct the implementation of the train run chart; business exploitation of the railway infrastructure system; management of techniques, operations, standards and regulations; ensure railway traffic order and security 3.1.4 Strategy for the development of Vietnam's railway transport industry Overall objectives: Develop a synchronous railway transport system in terms of infrastructure, organize the management and operation of transportation, industry and services with high qualifications; ensure smooth, orderly, safe, accurate, fast, convenient and efficient railway transportation activities; form a driving force to promote socio-economic development, serve the industrialization and modernization of the country, meet the requirements of regional and international integration, ensuring national defense, security and environmental protection Specific objectives a) Up to 2020: Meet about 1% - 2% market share in passenger transport and 1% - 3% market share in freight transportation; Meet about 4% - 5% market share of urban passenger transport in Hanoi and Ho Chi Minh City Focus on developing products; build new wagons in the direction of modernity, fully equipped and diverse in types b) From 2020 to 2030: Meet about 3% - 4% market share in passenger transport and 4% - 5% market share in freight transportation; Meet about 15% - 20% market share of urban passenger transport in Hanoi and Ho Chi Minh City c) Vision to 2050 Meet at least 5% - 8% of the market share of passenger transport and 5% - 6% of the market share of freight transport; Meet over 30% market share of urban passenger transport in Hanoi and Ho Chi Minh City 13 Implementation Solutions: - Promote the policy of socialization in the railway transport business - Make reasonable investment in training and development of human resources - Science and Technology: Adopt policies to encourage research and application of scientific and technological achievements; apply new scientific and technological achievements in training and transportation exploitation - Transport development: Ensure quality, fastness, safety, convenience, and social cost savings Strongly develop multimodal transport and logistics services in goods transportation 3.1.5 Relationship between Saigon Railway Transport Joint Stock Company and Vietnam Railways Corporation - Development Strategy: SARATRANS must comply with and adhere to the major objectives, tasks, targets and solutions that are directly related to Railway Transport in the Vietnam Railway Transport Industry Development Strategy to 2020 and vision to 2050 to develop and implement Enterprise Development Strategy - Vietnam Railways Corporation is the parent company of SARATRANS with a controlling share (78.46%); Every year, SARATRANS signs a contract with Vietnam Railways Corporation to hire Vietnam Railways Corporation to run trains, hire locomotives, hire railway infrastructure ; 3.2 Overview of Saigon Railway Transport Joint Stock Company 3.2.1 Process of Formation and Development Saigon Railway Transport Joint Stock Company was formerly Saigon Railway Passenger Transport Company which was established by Vietnam Railways Corporation by Decision No 04 / QD / ĐS-TCCB dated 7/7/2002, is a state company, the dependent accounting From February 1, 2016, Saigon Railway Transport One Member Limited Company became Saigon Railway Transport Joint Stock Company, with charter capital of 503.1 billion; capital structure at the time of approval of the Charter: Vietnam Railways Corporation 78.46%, employees 7.33%, another investor 14.21% 3.2.2 Main asset of Saigon Railway Transport Joint Stock Company The total fixed assets of SARATRANS by the end of 2019 are 1,139.3 billion dong, which is a large enterprise Volatility increased from 2018 to 2019 due to the investment in new generation passenger wagons The fixed assets of SARATRANS are mainly wagons, accounting for about 90-95% 3.2.3 Business and production situation of Saigon Railway Transport Joint Stock Company In 2019, SARATRANS had transportation revenue of 1,790.1 billion VND, of which revenue from passenger transportation was mainly 81%, tons were 875 thousand tons; passengers on board reached 3,606.9 thousand turns The volume and revenue of passenger and cargo transportation in the years 2016 - 2019 increased and decreased erratically, with no clear tendency to increase 14 3.2.4 Characteristics of Saigon Railway Transport Joint Stock Company in the pre-equitization period (before February 2016) Before February 2016, SARATRANS was Saigon Railway Transport Company Limited which was one of the two independent railway transport companies under the Vietnam Railways Corporation, operating in railway transport as the core The company has 11 member units, dependent accounting The company operates with full legal status in accordance with the law 3.2.5 Company characteristics after 02/2016 SARATRANS operates under the model of a joint stock company by law Main business activities: Railway passenger transportation; railway freight transportation; Business lines related to the main industry: road passenger and cargo transportation; Coastal freight and ocean SARATRANS has the parent company of Vietnam Railways Corporation, holding 78.46% of the charter capital There are no subsidiaries, no joint ventures or affiliates Organizational Structure of the Company: Board of Directors, Board of Supervisors, Board of General Directors; 02 branches of wagon, 01 railway flight attendant and 06 transportation branches, 07 professional departments 3.3 Evaluation on formulation of development strategies 3.3.1 Period before January 1, 2015: Before January 1, 2015, the entire Vietnam Railway Industry was approved by the Prime Minister many times to the plan and Strategy for the Development of Vietnam Railway Transport SARATRANS depends 3.3.2 From January 1, 2015 to December 31, 2015: Saigon Railway Transport One Member Limited Company does not work on building development strategies 3.3.3 From January 1, 2016 to now, Saigon Railway Transport Joint Stock Company: The strategic development has been paid attention by SARATRANS, has taken initial steps, has outlined a number of contents about business strategy 3.3.4 Overall assessment of the development strategy building: Before 2016, the development strategy building in entire Vietnam railway sector has not been properly focused and paid attention, the method is still subsidized and not scientific From 2016 onwards, although has been paid attention, it has just stopped at a number of resolutions and topics and there are some outlines of the strategy's content, there is not yet a specific enterprise development strategy 3.4 Business environment analysis of SARATRANS 3.4.1 Macro environment analysis Macro environmental factors include: economic factors, political and legal factors, population, social factors, natural factors, technological factors and international environmental factors Each of the above macro environmental factors can affect the enterprise independently or in connection with other factors 15 3.4.2 Micro-environmental analysis and assessment (industry environment) The micro environment is comprised of industry factors and external factors to the enterprise, determining the nature and degree of competition in the industry The industry environment is the most complex and also has a lot to with competition There are basic factors: competitors, customers (buyers), suppliers, potential new competitors, alternative products 3.4.3 Assessment of the reaction of the Saigon Railway Transport Joint Stock Company to the external environmental factors On the basis of the weighting results in Table 3.7 and the results of the score survey to assess the importance of major external environmental factors in Appendix 2: PL2.11 Sample 11 survey results, the author built the matrix of external factors EFE table 3.8 Table 3.8 Matrix of main external factor factor evaluation EFE No Major external factors 10 11 Political factors, mechanism, law, Good signals about domestic and international economy Trends in international economic integration Great potential of the market Fluctuation of exchange rates, bank interest rates Development of science and technology Customer loyalty Domestic and foreign cooperation Proactive in raw materials for production Great level of competition Elements of railway infrastructure Total points Score critical level 0.11 0.07 0.05 0.09 0.09 0.12 0.12 0.04 0.05 0.11 0.15 1.00 Reactivity classification (weighting) 3 3 3 3 3 Score calculation 0.33 0.21 0.15 0.27 27 0.36 0.36 0.12 0.10 0.33 0.45 2.95 Sources: Research student synthesis and analysis Through the results of Table 3.8 above, the total response score of SARATRANS to 11 main factors affecting the external environment was only 2.95 points, at the average response level 3.4.4 Analysis and assessment of the internal environment of SARATRANS To assess the strengths and weaknesses of the environmental factors inside the SARATRANS, the dissertation builds and analyzes the matrix of the IFE internal factors according to the form shown in Table 2.4 The construction of the IFE matrix is based on the assessment score of the key internal environmental factors On the basis of the weighting results in Table 3.14 and the results of the score survey to evaluate the importance of major internal environmental factors PL2.10, the author builds a matrix to evaluate external factors IFE Table 3.15 16 Table 3.15: Matrix of assessing the strengths and weaknesses of internal environmental factors of SARATRANS No Major internal factors Financial capacity Competence in management and administration Equipment and technology qualifications Marketing capacity Production and organization structure Human resources R&D capacity (research and development) Domestic and international cooperation capacity Total points Score Classification Score critical strong, weak calculation level (Weighted factor) 0.15 0.13 0.18 0.09 0.09 0.17 0.09 0.10 1.00 3 3 3 0.45 0.39 0.54 0.18 0.27 0.51 0.27 0.30 2.91 Sources: PhD student synthesizes and analyzes The results in Table 3.15, the Assessment Matrix of strengths and weaknesses of environmental factors inside SARATRANS, with a total score before main factors of the internal environment reached 2.91 points, assessed above average Chapter 4: FORMULATION OF DEVELOPMENT STRATEGY OF SAIGON RAILWAY TRANSPORT JOINT STOCK COMPANY 4.1 Define the mission and vision of the Company 4.1.1 Mission: Maximize the needs of fast, convenient and safe railway transport of goods and passengers with reasonable prices, bringing satisfaction to customers in the direction of Industrial Revolution 4.0 into providing transport service, transport connection 4.1.2 Vision: Be the most trusted and selected partner thanks to the ability to provide professional transport services, optimal connection solutions; maximum satisfaction of the legitimate needs of customers and satisfy the sustainable investment value, attractive and long-term benefits for shareholders and partners on the basis of cooperation for mutual development 4.2 Core values: "Safe - Convenient - Friendly - Punctual and Efficient" 4.3 Development strategy goals of the Company 4.3.1 Overall objectives The long-term goal of the entire enterprise is to be consistent with the railway transport quality of Vietnam, that is Develop SARATRANS synchronously in both technical facilities, organize, manage, exploit, transport, repair industry and services with high level; responsible to the society, meet the transportation needs of the people, the economy and protect the environment 4.3.2 Specific objectives From now to 2025: Ensure production, revenue, efficiency growth Maintain charter capital, reduce employees by 2.6% / year, average income increases 8% / year, revenue increases 7.1% 17 Period after 2025 to 2030: Ensure growth in transport revenue volume at 10% / year; increase charter capital; continue to reduce labor by 2.6% / year; ensure income increases 10% / year; to attract 20-30% of investment capital from all economic sectors to develop wagons, means of loading and unloading, machinery and equipment connecting transport, warehouse, information technology 4.3.3 Forecast of the company's transport volume up to 2025 Transport demand for the whole Vietnam Railways industry: passengers up to 2030 in the "no impact" scenario will be 19,710,000 passengers / year; goods by 2030 will be 56,599,400 tons / year, accounting for 4.2% market share of the entire Transport industry Forecast of the company's transport volume up to 2025 On the basis of passenger and cargo transportation demand many times larger than the implementation of the railway transport enterprises in 2019, applying the forecasting method in 2.3.4, after taking steps, Currently the different methods, the author proposed to increase from 6-7% / year as shown in Table 4.2 below Table 4.2: Some forecasting indicators of transport volume and revenue of Saigon Railway Transport Joint Stock Company 2021 - 2025 No Year Year Year Year Year 2021 2022 2023 2024 2025 Tons of stacking 1,000 tons 1,001.7 1,071.9 1,146.9 1,227.2 1,313.1 Ton.Km Million T.Km 1,137.0 1,216.6 1,301.8 1,392.9 1,490.4 Customers 1,000 HK 3,859.3 4,129.5 4,418.6 4,727.9 5,058.0 HK.Km Million HK.Km 1,761.6 1,884.9 2,016.9 2,158.0 2,309.0 T.Km t / đ Million TKm 2,915.2 3,119.2 3,337.0 3,571.0 3,821.0 Transport Revenue Million dong 2,049,000 2,192,000 2,346,000 2,510,000 2,686,000 Sales of goods Million dong 365,000 391,000 418,000 448,000 479,000 Other revenue Million dong 1,656,000 1,772,000 1,896,000 2,029,000 2,171,000 Criteria Unit Sources: Synthesis of SARATRANS and author 4.4 Determination of the strategic plans of the Company Table 4.3: The SWOT matrix forms strategic directions SWOT Strength (S) Have network connecting with the southern key economic region Have transport capacity to handle large volumes Always a unit with high quality and efficient transportation services Weakness (W) Weak service quality Weak Marketing The financial capacity is weak, the capital is small, it has not attracted the economic sectors to invest in the railway The contingent of staff is large but not strong and has no high technology knowledge The heavy organizational structure is ineffective The capacity of the Company is limited, CSVC, transport technology is out of date 18 Opportunity (O) Economic integration in the region and the world, joining WTO, AFTA, OSZD Get the attention of the Party and State Transport demand increases The economic sectors began to pay attention, participate in investment The construction and enactment of the railway law system is relatively complete Successful lessons from other countries Threats (T) National infrastructure is not synchronous Railway infrastructure is very backward, slow to be invested Fierce competition between different types of transport Especially short routes parallel to roads Investment sources are limited Combine SO Centralized growth strategy - Place emphasis on improving existing products or changing existing markets, improving existing products or services - Consolidate and develop the existing transport market - Invest in modernizing means and equipment of transport technology in the 4.0 period; enhance connections for customers to easily access railway Combine WO Overall management strategy - Focus on improving service quality - Apply a modern and successful model in countries to the Company - Reorganize production to exploit the full capacity of the current route; maximize the potential of technical facilities and human resources Combine ST Overall management strategy - Use service quality, transport speed, safety and convenience to improve competitiveness - Make use of existing transport capacity to meet current demand Combine WT Product development strategy - Develop new transport product: transport products connecting at home and abroad - Develop railway transport means in the direction of modernity and convenience Sources: PhD student synthesizes and analyzes Thus, after building and analyzing the SWOT matrix, the dissertation forms 03 development strategies for SARATRANS However, combined, we will form a basic strategy for SARATRANS in the period up to 2025: Focused growth strategy, overall strategy and new product development strategy 4.5 Select the optimal development strategy for SARATRANS 4.5.1 Select Development Strategy based on the QSPM quantitative strategic planning matrix There are many development strategies to choose from, but it is necessary to find the optimal one The dissertation through strategic planning matrix QSPM uses the research results obtained in Chapter and expert opinion increase results in Table 4.4 Table 4.4: The QSPM Matrix selects the optimal Development Strategy for SARATRANS Development strategies Classification Concentrated growth Overall management of Score Attractive Score importance Attractive classification calculation classification calculation Political factors, mechanism, law 0.11 0.33 0.33 Good signals about domestic and 0.07 0.21 0.21 international economy Trends in international economic 0.05 0.15 0.15 integration Great potential of the market 0.09 0.27 0.27 Fluctuation of exchange rates, 0.09 0.27 0.18 bank interest rates Development of science and 0.12 0.36 0.36 technology Major factors 19 Development strategies Classification Concentrated growth Overall management of Score Attractive Score importance Attractive classification calculation classification calculation Customer loyalty 0.12 0.36 0.36 Domestic and foreign cooperation 0.04 0.12 0.08 Proactive in raw materials for 0.05 0.10 0.10 production Great level of competition 0.11 0.33 0.33 Elements of railway 0.15 0.45 0.45 infrastructure Point to major external factors 1.00 2.95 2.82 Financial capacity 0.15 0.45 0.45 Competence in management and 0.13 0.39 0.39 administration Equipment and technology 0.18 0.54 0.54 qualifications Marketing capacity 0.09 0.18 0.18 Production and organization 0.09 0.27 0.18 structure Human resources 0.17 0.51 0.51 R&D capacity (research and 0.09 0.27 0.27 development) Domestic and international 0.10 0.30 0.20 cooperation capacity Point the main inner factors 1.00 2.91 2.72 Total points 5.86 5.54 Major factors 10 11 12 13 14 15 16 17 18 19 Sources: PhD student synthesizes and analyzes Survey results in Table 4.4 show the total score for the Centralized Growth Strategy: 5.86 is higher than the total score for the overall management strategy plan: 5.54 This result is an important basis to combine with other bases to choose the optimal strategy for SARATRANS 4.5.2 Orientation of the SARATRANS Development Strategy (1) Consolidate and develop the existing transport market, strengthen transport connections, develop new products, increase output, revenue and effectively business (2) Invest in modernizing information technology, vehicles, transport equipment, loading and unloading equipment, system of connection, operating equipment creating a breakthrough in the application of technology in the Industrial Revolution 4.0 era; (3) Develop international intermodal rail transport connection; (4) Improve the quality of transport services; (5) Reorganize production to exploit the full capacity of existing roads; maximize the potential of technical facilities and existing human resources (6) Complete the organizational structure, develop human resources to meet the development requirements of SARATRANS 4.5.4 Choose the optimal strategy for Saigon Railway Transport Joint Stock Company Comparing with the characteristics and actual production situation of Saigon Railway Transport Joint Stock Company, the preferred development strategy is: Centralized Growth Strategy, overall management strategy 20 4.6 Solutions for implementing the SARATRANS Development Strategy The Development Strategy of SARATRANS has been prioritized as the Centralized Growth Strategy and the overall management - For growth strategies focus on solutions: Mainly focus on internal development, promoting internal resources, improving existing products or markets, trying to exploit every opportunity to have transport products and services, mainly railway transportation for customers and goods; increase market share by improving product quality, launching new, higher quality products - For overall management strategy: The overall management strategy focuses on the core competencies of the business and the value created by coordination among departments and units within the enterprise 4.6.1 Solution group mainly on transport business Solutions for transport management and administration Continue to improve the organizational structure, management and management mechanism smoothly, flexibly and respond to the market as quickly as possible, especially when there are force majeure events: Natural disasters, enemy sabotage, epidemics Solutions to improve the quality of transport business a) In transport of passengers: Pay special attention to improve the quality of passenger service, continue to improve the quality of passenger wagons; reorganizing and renewing service methods on train under stations; step up the application of science and technology to the management and operation of transport, providing sufficient and accurate information for customers Pay attention to strongly develop sales service, after-sales customer care b) In freight: Diversify types of services, improve the quality of freight wagons, ensure the flow of vehicles to serve the needs of loading and unloading, attach importance to the discharge of goods, and resolutely prevent stagnation; cooperating closely with customers to organize the construction, signing of responsibility contracts and deploying specialized train operation with customers on the principles of equality, cooperation, ensuring safety, punctuality, c) In advertising and marketing: Promote propaganda and promotion of the company's image in many forms, through many channels to increase the support and confidence of the people in railway transport in general and the company in particular Price solution and price policy a) In transport of passengers: Apply flexible fare policy for each route, train and each time of the year, ticket sales time in advance to improve efficiency of seat use, reduce passenger transport costs, actively build flexible rates activities, seasons, flows, routes, in accordance with the requirements of the shippers Join international transport 21 b) In freight: Regularly research and update market prices, prices of other means of transport on the basis of freight costs to issue flexible rates according to type of wagon, route, departure station, destination station have the highest turnover, increase the efficiency of goods transportation business Join international transport New product solution - international organization of international fresh freight container ships Solution on connecting railway transport with other means of transport in the area of Ho Chi Minh City and surrounding areas Solutions to improve service quality on passenger ships: In addition to implementing services: Eating, sleeping, resting, entertainment on the train, SARATRANS should focus on solving the bad reputation of “train odor” and cockroaches and mice on the train 4.6.2 Restructuring some key areas of SARATRANS In the current period, SARATRANS has to face more competition; market share of Railway transportation tended to decrease, production and business faced many difficulties These difficulties, partly brought about by objectively, such as outdated transport technology, the railway infrastructure has not been invested to upgrade to a level with other types of transport partly because the business has just transformed from the model state-owned enterprises to shares Moreover, although it is a joint stock company, the state still holds dominant shares, so all activities still have a bit of the old style, therefore, one of the important solutions for SARATRANS for development is restructuring some key areas of the Company These areas include: Organizational restructuring of management apparatus and human resources; review and assign the responsibilities, duties and powers of the division of labor, at all management levels; restructuring activities on strategic objectives, business plans, types of transport services provided; restructuring resources; asset portfolio structure, financial structure in line with business strategy in the new period Accordingly, the restructuring of activities and resources is considered the core issue of the entire restructuring process To accelerate restructuring, it is necessary to focus on a number of key measures: - Boldly apply the theoretical issues about the restructuring process for the leadership staff of the transport business Change the management mindset of the highest leader Innovative thinking in restructuring start thinking again On the basis of rethinking, conducting an overall and detailed redesign from business philosophy, mission, vision, core values, ethical standards, corporate culture, goals, orientation business strategy to organizational structure, executive management mechanism, activities, resources - Train and equip employees with the necessary knowledge to be able to adapt to the new paradigm, to new problems after business restructuring by providing employees with information necessary related to their interests, obligations and responsibilities so that employees plan to actively work in 22 their jobs, equipping workers with the necessary knowledge to be able to access new positions, with new jobs after corporate restructuring - Create the consensus for a successful restructuring 4.6.3 Solutions for implementing science and technology strategy Implementation measures include: Promulgate policies and regulations, focusing on the development and application of information technology on Internet platforms in providing transport services (ticket booking, train check-in, automatic toll collection ) similar to other services such as taxi Uber, Grab…; every train, train is monitored visually, online Along with intelligent public services, a comprehensive automatic management system ensures safety and smoothness 4.6.4 Human resource development solutions group The most important and cross-cutting solution in the implementation of the selected Development Strategy is that SARATRANS must train, retrain, recruit, compensate to have a team of skilled and qualified workers foreign language arts and skills to meet the requirements of information technology development in the direction of the Industrial Revolution 4.0; increase labor productivity, increase competitiveness 4.6.5 Group of investment solutions and capital creation SARATRANS needs to have an investment plan for the period up to 2025 and up to 2030 to meet the transport needs and suit the scale and financial capacity, which will diverge and give an appropriate investment in prioritized projects and their effectiveness 4.6.6 Environmental protection solutions Renovate propaganda and education content, raising awareness and responsibility for environmental protection for cadres, civil servants, officials and employees throughout the Company Strengthen the organizational and managerial apparatus, improving the capacity and qualifications of the contingent of cadres and civil servants engaged in environmental protection; organize, assign leaders to be responsible for environmental protection work and strengthen specialized departments and officials with expertise in environmental protection 4.6.7 Solution for implementing social responsibility: Corporate social responsibility is being viewed as one of the top business strategies of the Company rather than compulsory charity or regulations Deploy the corporate social responsibility well will not only help your business a good business, but also assist your business in solving strategic problems related to business and social issues SARATRANS needs to well implement some of the following solutions 4.6.8 Other solutions 4.7 Inspection, evaluation and adjustment of strategy Saigon Railway Transport Joint Stock Company needs to establish a Strategy Committee with the participation of key staff: The Chairman of the Board of Directors is the Head, General Director, Deputy General Director are the Deputy 23 Head, the Chief Accountant and a number of department heads and excellent experts are members These are the people who have the level of influence and ability to decide on the success of the business This Board is responsible for directing the entire process of building and implementing the Enterprise Development Strategy CONCLUSION AND RECOMMENDATION (i) Conclusion Through the research process, the thesis has achieved new specific results as follows: Firstly, the thesis reviewed domestic and foreign studies on development strategy found research gaps, research processes and methods; building a theoretical framework for research on building development strategies for railway transport enterprises Secondly, systematize and deepen, supplement and develop the theoretical basis of building quality development for railway transport enterprises in the context of equalization + Bring the concept of enterprise development strategy; build principles, bases, 8-step process, propose strategic level and component strategies of VNR enterprise development strategy Bring principles of sustainable development for railway transport enterprises; + Propose fields of technology application in the direction of Industry Revolution 4.0, apply the problem of determining the transport connection index for the railway transport enterprises + Access to Industry revolution 4.0 by building models: Cargo transportation exchange, SARATRANS Smart Data Centre, freight wagon online information system and measure the relationship of development strategy building with the feasibility of the development strategy Thirdly, by scientific and modern methods, the thesis analysed and evaluated the current situation of SARATRANS, the development strategy building of SARATRANS; analysed and evaluated the operating environment with the principles of ensuring realism, logic and science In the process of analysis and evaluation, the thesis consulted especially by 145 leaders and managers of SARATRANS, VNR Corporation and other railway transport units to get an objective and accurate view Through research, the thesis has identified: Opportunities, challenges to be faced; the strengths and weaknesses of SARATRANS which are especially important bases for the optimal development strategy selection for SARATRANS in the period up to 2025 with a vision to 2030 Fourthly, on the basis of the analysis results, environmental assessment and investigation and survey results, the thesis uses modern and scientific tools such as the SWOT matrix to formulate strategic plans; the QSPM matrix to quantitatively evaluate and select the optimal development strategy 24 for SARATRANS in the period up to 2025 with a vision to 2030 which is the Centralized Growth Strategy, the overall management strategy Fifthly, propose solutions for implementing selected development strategy which is scientific, reliable, feasible in accordance with SARATRANS in the new context of transferring from state-owned enterprises, dependent accounting to joint stock companies, are still heavily "subsidized" Sixthly, the Industrial Revolution 4.0 approach by identifying a number of necessary modern and appropriate methods are used in the process of assessing the current situation, researching and building the development strategy for SARATRANS: Method of forecasting output, railway transport revenue, weighting method in using matrix to evaluate the internal and external environmental factors of the railway transport enterprise (ii) Recommendations a) Recommendations to the State - The State needs to soon invest in railway infrastructure according to the approved planning and development strategy for the Vietnam railway industry - Have policies to support railway transport enterprises to invest strongly in building warehouses, cargo yards, loading and unloading roads, means of transport, information technology and training of human resources Industry 4.0 b) Recommendations to the Vietnam Railways Corporation As a parent company, contributing over 70% of equity, Vietnam Railways Corporation needs to participate in the entire production and business process of Railway Transport Enterprise by supporting capital, mechanisms, regulations, and investment in means of transport and advanced technology in the direction of Industrial Revolution 4.0 - To assume the prime responsibility for, and coordinate with other transport branches and localities in, strengthening intermodal connections between railway and other modes (iii) Limitations of the dissertation: Although the research objectives have been met, there is some limitations in this study that the impact of the Railway Infrastructure on the Development Strategy of Railway Transport Enterprise has not been quantified, and there is no condition for further research on the railway transport connection (iv) Future research directions: In the future, based on the research results of the dissertation, it is possible to study and quantify the impact of railway infrastructure on the Development Strategy of Railway Transport Enterprises ANNOUNCED SCIENTIFIC PROJECTS Pham Quang Tu (2014), Research on solutions to mobilize capital from the private sector to develop Vietnam Railways, The Transport Journal, April 2014, p.47 Pham Quang Tu (2017), Study on the principles of railway transport business development strategy development, The Transport Journal July 2017, p.98 Pham Quang Tu, Pham Cong Thuan (2019), Strengthening connection of railway transport in Ho Chi Minh city, The Transport Journal August 2019, p.164 Pham Quang Tu (2020), Research on some application models of industrial revolution 4.0 at Saigon Railway Transport Joint Stock Company, Journal of Transport, October 2020, p.180 ... transport capacity to handle large volumes Always a unit with high quality and efficient transportation services Weakness (W) Weak service quality Weak Marketing The financial capacity is weak, the... to improve the quality of transport business a) In transport of passengers: Pay special attention to improve the quality of passenger service, continue to improve the quality of passenger wagons;... times that of a station (B) in the other network, it can be said that ga (A) offers better connectivity throttle (B) c) Degree of application of the problem to determine the transport connection