CAPSTONE PROJECT REPORT FORMULATE BUSINESS STRATEGY FOR PTW VIETNAM LIMITED COMPANY IN PERIOD OF 2013-2018 BÁO CÁO DỰ ÁN CAPSTONE XÂY DỰNG CHIẾN LƯỢC KINH DOANH CHO CÔNG TY TNHH PTW VIỆT NAM GIAI ĐOẠN 2013-2018

CAPSTONE PROJECT REPORT FORMULATE BUSINESS STRATEGY FOR PTW VIETNAM LIMITED COMPANY IN PERIOD OF 2013-2018 BÁO CÁO DỰ ÁN CAPSTONE XÂY DỰNG CHIẾN LƯỢC KINH DOANH CHO CÔNG TY TNHH PTW VIỆT NAM GIAI ĐOẠN 2013-2018

GRIGGS UNIVERSITY

(GLOBAL ABVENCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

F-ORMULATE BUSINESS STRATEGY FOR PTW VIETNAM LIMITED COMPANY IN PERIOD OF

2013-2018

Class: GaMBA X0211 Group No 1

Nguyen Tien Nghia (leader) Tran Thu Hoai

Hoang Thanh Nam Hoang Minh Tuan

sa PDE Com§ÐNRJIRMATION;LRTTER PTW

Level 19, Centec Tower, Address:

a _ D TH MEN Bra Head Office: Level 9 - BIDV Tower, 35 Hang Voi Hoan Kiem District Hanoi, VN

War j

District 3, Telephone number 84 4 3974 4252

T 84 8 3822 7100 sa

F 84 8 3822 7101 Website’ www ptw.com au

www ptw.com.au Representative Office: | Level 19 - Centec Tower, 72-74 Nguyen Thi Minh Khai, District 3,

HCMC, VN

PTW VIETNAM Ltd., Co Telephone number: 8483822 7100

ee eee Fax number 84 8 3822 7101

oo), PTW VIETNAM LIMITED COMPANY

Page 1 of 1

Group No.08 of GAMBA X0211 would like to sincerely thank Director and staffs

of P-W VietnamLimited Company for helpfully providing data and information as well

as creating favourable conditions for our members to better understanding to complete this Capstone Project

We wish to thank the teachers for equipping the knowledge and management skills

needed in business throughout the classes, which facilitateus to complete this capstone project

We also thank ETC Center of Hanoi National University, University of Griggs- Andrew for creating conditions for us to participate in this course by which we are not only provided with knowledge but also have more relationship and opportunities to share information and learn from our classmates, which is also one of the targets that this master program in business administration is oriented

In the course of writing this Capstone Project, our group may not avoid shortcomings for which we hope to receive comments from the teachers and readers to help us better complete this project

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Table of Contents

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THEORETICAL BASIS OF BUSINESS STRATEGY MANAGEMENT 10

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1.4.2 Internal Factor Evaluation (IFE) matrix .:ccsccsscssssscsssecessosscseseseceseees 23

1.5 ThyiSŒengbhis-WWXsakpessts£Sbpertunities- Threats (SWOT) Matrix 23

1.6 Types OŸ SÍFA{€ØV Q nọ cọ gọi Họ Họ g4 0001 0g 0 26

1.7 Quantitative Strategic Planning Matrix (QSPM) S2 seese 27

1.8 Strategy implementation and eYaÌuafÏOI1 <5 5< s55 Ă S3 3n 1n se 28

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BUSINESS SITUATION OF PTW VIETNAM LIMITED COMPANY 29

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2.2 Business result of PTW Vietnam in 4 year (2009-2012) .«-< «<< «<< 37

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2.4.8 Internal Factors Evaluation matrix (IHFE mafFÏX) s5 s55 << 5 «<< «<5 s 69

CHRPEFERflAj,HRGE€ SbS@TION AND SOLUTIONS 1O IMPLEMENT

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LIST OF FIGURES

Fi eure PY € Ä'Stmprtẻ LỆNG gi management model

Figure 1.2 - Macro environment impacts

Figure 1.3 —M.Porter’s five forces model

Figure 1.4 — An example of CPM

Figure 1.5 — An example of EFE

Figure 1.6 -SWOT analysis

Figure 2.1— System of representatives and projects of PTW Group

Figure 2.2 -Organization chart

Figure 2.3 — Experience curve

Figure 2.4 — Stages of design process

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LIST OF TABLES

TabR DE CbmperesRdM VeetNamssoustomers

Table 2.2- Business statement in 2009-2012

Table 2.3 Forecast of key economic indicators in 2013

Table 2.4 Domestic and foreign competitors of PTW Vietnam

Table 2.5 - Comparison between PTW Vietnam Co., Ltd and its rivals in 2012

Table 2.6— The Competitive profile matrix

Table 2.7— EFE matrix

Table 2.8 Consolidated financial statements from 2010-2012

Table 2.9 — Some financial ratios in 2009-2012

Table 2.10- Human resource by qualification of PTW Vietnam Co., Ltd

Table 2.11— IFE matrix

Table 3.1 SWOT matrix

Table 3.2 The Quantitative Strategic Planning Matrix

Table 3.3 Roadmap to implement selected strategies

Table 3.4 Forecast revenue from 2013 — 2018

Table 3.5 Forecast profit from 2013 — 2018

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Design consultants sector plays a critically important role in the construction of showing the beauty of the architecture and the use of the facility Although the government has launched several solutions for the real estate market such as corporate

income tax reduction, time stretching to land use tax, allowing fund securities ,

investing capacity is still declining due to market bottom, this requires the design consultants business to fiercely compete to survive and take the market segment that is getting smaller

After joining the World Trade Organization (WTO), Vietnam has a number of policy changes, as well as open some economic sectors, this has enabled opportunities for foreign investors to enter and search market in Vietnam PTW Co., Ltd was

established with 100% foreign owned capital from PTW Architects of Australia and after

nearly 10 years of operation, it has built a large network of customers with reputable

brand in the industry However, that the real estate market have recently deteriorated

affected on business results of the company Besides, the increasingly fierce competition creates significant challenges, especially for foreign consultants in relatively large costs for human resources, technology and management processes

Basing on this situation, our group have decided to choose the thesis: “Formulate

business strategy for PTW Vietnam Ltd.,Co in peroid of 2013-2018” PTW Vietnam

Ltd.,Co is one of the leading contruction design consultants in Vietnam — where one member of our group is working for

3 Subject and scope of study:

Subject: Business situation and related issues to strategy at PTW Vietnam Ltd.,Co Time of study: 2010-2012

Time of business strategy implemetation: 2013-2018

4 Methods of study:

Y Data is collected mainly from reference materials

Y Applying theoretical models of strategy, matrices to assess the impact of the external environment, internal analysis of the company

Y Based on the analysis, evaluation and application of theoretical models

to choose and decide strategies for the company

5 Structure of study

In addition to the introduction and conclusion, the structure of the studyis organized as the followings:

Y Chapter1:Theoretical basis of the Business strategy management

Y Chapter 2:Business situation of PTW Vietnam Ltd.,Co

Y Chapter3:Strategic selection and solutions to implement selected strategy

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1.1 Basis concept of business strategy

1.1.1 Definition

“Strategic management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.” (Fred, David (2011), Strategic managment, Concepts and cases, 13th edition, Prentice Hall Press) As this definition implies, strategic management focuses on integrating management, marketing, finance/accounting, production/operations, research and development, and information systems to achieve organizational success The term strategic management in this text is used synonymously with the term strategic planning The latter term is more often used in the business world, whereas the former is often used in academia Sometimes the term strategic management

is used to refer to strategy formulation, implementation, and evaluation, with strategic planning referring only to strategy formulation The purpose of strategic management is

to exploit and create new and different opportunities for tomorrow; long-range planning,

in contrast, tries to optimize for tomorrow the trends of today

A strategic plan is, in essence, a company’s game plan Just as a football team needs a good game plan to have a chance for success, a company must have a good strategic plan to compete successfully Profit margins among firms in most industries have been so reduced by the global economic recession that there is little room for error

in the overall strategic plan A strategic plan results from tough managerial choices

among numerous good alternatives, and it signals commitment to specific markets,

policies, procedures, and operations in lieu of other, “less desirable” courses of action

1.1.2 Prominent features of business strategy

Prominent feature of the strategy is directive to identify solutions, major policies

on primary goals; in the plans,the balance of orientation is the dominance, all of the targets are measured, linked together into a system of targets reflecting the overall business operations of the enterprise Business strategy owns the following basic

characteristics:

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- Clearly define specific objectives, directions and guidelines implemented in

phases pF Compressor Free Version

- Often built for a relatively long period, usually from 3 years upwards

- Ensurely maximize mobilization of all resources and use these resources to seize business opportunities in the market

- Reflect over a continuous process from strategy formulation, implementation, evaluation and adjustment

1.1.3 Roles of Business strategy

Enterprises need to have a business strategy to look to the future with further goals For this strategy to be effective, it is important to demonstrate role of business Strategy

- Leader will have the vision to guide their businesses, while business strategy will play a role of sharing the vision to lower level managers and all employees in the enterprise

- Business strategy will clearly play a role of consistency and concentration in choosen business sectors to minimize waste of resources to activities that are not its Strengths

- Business strategy serves as the basis for leader to assess the feasibility, determine priorities and allocate adequate resources for choosen businesses

- Business strategy is the basis for the leader to build a resonable organization structure to support business activities, set strict process to create the ability to operate

towards goals

- Business strategy will be the basis to build a business in detail for implementation

1.2 Stages of Strategic Management

The strategic-management process consists of three stages: strategy formulation,

strategy implementation, and strategy evaluation

Strategy formulation includes developing a vision and mission, identifying an

organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and

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choosing particular strategies to pursue Strategy formulation issues include deciding

What mew PIpðR&š df Ênter:vabat, businesses to abandon, how to allocate resources,

whether to expand operations or diversify, whether to enter international markets, whether to merge or form a joint venture, and how to avoid a hostile takeover

Strategy implementation requires a firm to establish annual objectives, devise poli- cies, motivate employees, and allocate resources so that formulated strategies can be executed Strategy implementation includes developing a strategy supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information systems, and linking employee compensation to organizational performance

Strategy evaluation is the final stage in strategic management Managers desperately need to know when particular strategies are not working well; strategy evaluation is the primary means for obtaining this information All strategies are subject

to future modification because external and internal factors are constantly changing Three fundamental strategy-evaluation activities are (1) reviewing external and internal factors that are the bases for current strategies, (2) measuring performance, and (3) taking corrective actions Strategy evaluation is needed because success today is no guarantee of success tomorrow! Success always creates new and different problems; complacent organizations experience demise

Figure 1.1 — A comprehensive strategic management model

impterment Sarategies—

Management sucs

Global/International Issues )

Formulation Í Implementation Evaluaton

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Source: (Fred, David (2011), Strategic managment, Concepts and cases,

Hết edition, Prentice Hall Press)

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The determination of the vision, mission and core values isstatement ofbusiness

strategy, is a concern to design and build sustainable development

1.2.1 Vision:

Vision is an image, standard, unique imagery and ideal which the business wants

to achieve or become in the future A good vision with the leader’s intuitiveness will

create the appropriate strategy for the company at different times

1.2.2 Mission

A business mission is the foundation for priorities, strategies, plans, and work assignments It is the starting point for the design of managerial jobs and, above all, for the design of managerial structures

To survive and grow,organizations must develop their own goals which they want

to achieve as well as its own path to reach that goal, and thereby forming strategic system

of organization

This is a logical first step in strategic management Every organization has a

mission, goals and strategies in line with the organization from time to time Accurate

information data is a very important to identify tasks, targets and_ strategies Organizations carefully develop a written mission statement in order to reap the following benefits:

“ To ensure unanimity of purpose within the organization

k To provide a basis, or standard, for allocating organizational resources

s° To establish a general tone or organ1zational climate

“ To serve as a focal point for individuals to identify with the organization’s purpose

“ and direction, and to deter those who cannot from participating further in the organization’s activities

s To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization

“Se To specify organizational purposes and then to translate these purposes into objectives in such a way that cost, time, and performance parameters can be assessed and controlled

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1.3 External environment analysis:

1.3.1 Macro environment analysis

Figure 1.2 - Macro environment impacts

Source: Strategic management material- GaMBA X0211 The influence of the external environment can be divided into five major categories: economy, culture, society, geography and demographics, law and politics, technology and competitive impact

“se Economic environment: Economic factors have a direct impact on the

potential attractiveness of various strategies That the context of the macroeconomic

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environment determine the health, prosperity is always causing impacts to businesses and industrics d he ae nment showsthe nature and orientation of the economy in which businesses operate The economic impact on a company may alter the ability to create value and its income The key factors in the macroeconomic environment affecting the company's strategy including: the economy growth rate, interest rates, exchange rate and inflation rate

Social, cultural, demographic and natural environment:Social, cultural,

demographic, and environmental changes have a major impact on virtually all products,

services, markets, and customers Small, large, for-profit, and nonprofit organizations in

all industries are being staggered and challenged by the opportunities and threats arising

from changes in social, cultural, demographic, and environmental variables

“ Political, Governmental, and Legal Environment: For industries and firms

that depend heavily on government contracts or subsidies, political forecasts can be the

most important part of an external audit Changes in patent laws, antitrust legislation, tax

rates, and lobbying activities can affect firms significantly The increasing global interdependence among economies, markets, governments, and organizations makes it

imperative that firms consider the possible impact of political variables on the formulation and implementation of competitive strategies

“se Technological environment :Technological advancements can dramatically affect organizations’ products, services, markets, suppliers, distributors, competitors, customers, manufacturing processes, marketing practices, and competitive position Technological advancements can create new markets, result in a proliferation of new and improved prod- ucts, change the relative competitive cost positions in an industry, and render existing products and services obsolete Technological changes can reduce or

eliminate cost barriers between businesses, create shorter production runs, create

shortages in technical skills, and result in changing values and expectations of employees, managers, and customers Technological advancements can create new competitive advantages that are more powerful than existing advantages In global

economy, identification and evaluation of key technological opportunities and threats can

be the most important part of the external strategic-management audit

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1.3.2 Industry analysis: Michael Porter’s five forces model

An important part of an external audit is identifying rival firms and determining their strengths, weak- nesses, capabilities, opportunities, threats, objectives, and Strategies.Collecting and evaluating information on competitors is essential for successful Strategy formulation Industry and competitive analysis is a set of concepts and techniques to clarify on the key issues:

s* Theoutstanding characteristics of the industry

s* The competitive forces, the nature and strength of each force

“* The forces to cause changes in the industry and their impacts

s* The company has the strongest and weakest position

** Who will be able to create the next shift

«* The key factors for success or failure in competition

s* The attractiveness in terms of ability to earn on averageprofit

Figure 1.3 — M.Porter’s five forces model

(Fonts deter ae)

ý Bargaining power of suppliers Rivalry ngon}; «[ _ Bargaining power of consumers )

( ‘Potential entry of new competitors )

Source: (Fred, David (2011), Strategic managment, Concepts and cases, 13th

edition, Prentice Hall Press)

*“ Potential entry of new competitors Whenever new firms can easily enter a particular industry, the intensity of competitiveness among firms increases Barriers to entry, however, can include the need

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policies, tariffs, lack of access toraw materials, possession of patents, undesirable locations, counterattack by entrenched firms, and potential saturation of the market

k Bargaining power of suppliers The bargaining power of suppliers affects the intensity of competition in an industry, especially when there is a large number of suppliers, when there are only a few good substitute raw materials, or when the cost of switching raw materials is especially costly To avoid depending too much on the inputs or the suppliers, businesses will have

to create a network of providers to have more choices and always in active position.It is

often in the best interest of both suppliers and producers to assist each other with reasonable prices, improved quality, development of new services, just-in-time deliveries, and reduced inventory costs, thus enhancing long-term profitability for all concerned

“se Bargaining power of consumers Both customers and enterprise are interested in the product Consumers decide the survival of the business, but customers also need businesses to offer their products

Customers also are businesses, both customers and businesses are concerned about their

interests Benefits of the business is profitable while customer’s benefit is the value that the product brings Both sides need each other, but compete in interests Both sides want

to maximize their benefits

So, to maximize the benefits to customers, business will loose their benefits, and

vice versa The ultimate goal of business is profit, the good market also continuously produce new products, unless switching to a different product The goal of the customer

is low cost, but still buy products with good quality Paying lower prices,customers get more favorable

When customers are concentrated or large or buy in volume, their bargaining power repre- sents a major force affecting the intensity of competition in an industry Rival firms mayoffer extended warranties or special services to gain customer loyalty whenever the bargaining power of consumers is substantial Bargaining power of

consumers also is higher when the products being purchased are standard or

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undifferentiated When this is the case, consumers often can negotiate selling price, warranty coverage, and accessaqry packages to a greater extent

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The bargaining power of consumers can be the most important force affecting com- petitive advantage Consumers gain increasing bargaining power under the following circumstances:

- Ifsellers are struggling in the face of falling consumer demand and the buyers are large comsumers

- The buyers consume largely a product of industry

- Ifthey are particularly important to the seller

- Ifthey can inexpensively switch to competing brands or substitutes

- | The buyer has the ability to penetrate the industry of sellers

- Ifthey are informed about sellers’ products, prices, and costs

Buyers can now put pressure on prices, quality products, and related services because they are who control the industrycompetition through in purchase decision

oo Potential development of substitute products The substitute productscan satisfy equivalent demand to the products and services

in the industry

The threat of substitute products will increase in the following cases:

- The buyer does not have to pay high costs to change product

- The price of substitute products is lower

- Quality and efficiency of the substitute products is better being used products

Competitive pressure of substitute products is the ability to meet demand from

products in the industry, in addition to the another factor as the price, quality, and other environmental factors such as culture, politics, technology

As unexpected, unforeseeable feature of substitutes: Even within the industry, the development of technology can also create substitute products for their industry

In contrast, the special products which are highly appreciated will be less affected

by this threat

1.3.3 The Competitive Profile Matrix (CPM)

The impact of competition is considered to be the most important strategic position of a business CPM identifies key competitors with the strengths and weaknesses In the CPM, the classification level of the competitorsand the total number

of critical points are also calculated The total point of evaluated competitors are compared to the choosen company The analysis of this comparison will provide critically strategic information

CPM is deployed through following steps:

s* Listing key factors affecting the enterprise’s competiton

Each critical success factor shows the response of the enterprise’s current

Strategy to these factors The ratings refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, 1 = major weakness

** Multiplying the weight of each factor and Adding the total weighted score

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respqn se leit iis BPE 2 ty W\ show a strong and positive response to the enterprise

Figure 1.4 — An example of CPM Sample firm Competitor | Competitor 2

Factors Weight Score | Weighted] c are | Weighted) <9 | Weighted

Source: : (Fred, David (2011), Strategic managment, Concepts and cases, 13th

edition, Prentice Hall Press)

1.3.4 External Factor Evaluation Matrix (EFE matrix)

An EFE matrix allows strategists to summarize and evaluate economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and

competitive information EFE Matrix is deployed through five steps:

Step J: Listing key external factors affecting the enterprise’s operation

Step 2: Assigning a weight from 0.0 (indirect, least important) to 1.0 (direct, most important) for each factor The classification shows the corresponding importance of factors to the success of the enterprise in the industry

Step 3: Assigning a rating from 1 (weak response and influence) to 4 (strong response and influence) for each critical success factor to show the response of the

enterprise’s current strategy to these factors

Step 4: Multiplying the weight of each factor with respective rating to determine the total weighted score

Step 5: Adding the total weighted score of factors with the sector of the enterprise The average score is 2.5 If the total weighted score is lower than 2.5, it shows a weak

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response If it is above 2.5, it will show a strong and positive response to the enterprise

PDF Compressor EreElglre 1 3 = An example of EFE

The movement of people

Source: : (Fred, David (2011), Strategic managment, Concepts and cases, 13th

edition, Prentice Hall Press) Total weight is 2.7 points shows that this business was just above average in the pursuit of strategies to take advantage of opportunities and avoid the threats

1.4 Internal environment analysis

All companies have strengths and weaknesses Company's strengths with suitable or special advantages can not easily be copied The company will have the suitable

solutionswhen identified weaknesses, promote and take advantage of the competitive advantage to their competitors When setting goals, strategies, companies need to pay

attention to these strengths, weaknesses with the opportunities, threats

1.4.1 Internal resources:

Human resource

Human resources play a very important role for the success of a business People

provide the input data to develop goals, environmental analysis, selection, implementation and test of a business strategy Although there have the appropriate planning system, but it will not be effective if people do not work effectively Analysis of human resources should focus on the following:

+ Qualifications, experience, ethics of staff;

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+ The value of labor relations compared with the industry and other competitors;

+ PPM Meanipresnss PeeWersion

+ Effective measures to encourage and motivate employees to complete their tasks;

Financial capacity

Functions of a finance department include: analysis and planning, test

implementation of the financial plan and the financial situation Accounting and financial

analysis should focus on the following issues: the ability to mobilize short-term, long- term capital and debt ratio of equity, cost of companies in comparision with all sectors

and competitors, tax issues

Financial analysis will be widely understood throughout the company because all the activities of a company is reflected out through the lens of finance So finance have a relationship with other departments and other elements in the entire company

Marketing

Marketing can be described as the process of defining, anticipating, creating, and fulfilling customers’ needs and wants for products and services There are seven basic functions of marketing: (1) customer analysis, (2) selling products/services, (3) product and service planning, (4) pricing, (5) distribution, (6) marketing research, and (7) opportunity analy-sis Understanding these functions helps strategists identify and evaluate marketing strengths and weaknesses

Infrastructure:

Although the material sources are very different, business strategy formulation is

very important Analysis is done on the basis of the technical level and current

technology and the ability to apply advanced technology This analysis also considers

whether a company has developed a suitable scale or not, the current scale, whether the

company is located in a convenient geographical location or not Geographical location can impact costs (land, housing, labor), the technical level of workers, materials, provide convenience for customers and shipping costs, capacity to cooperate, joint ventures and

economic connections

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Research and Development

PD PRCohtpRags Aree Version! operations that should be examined for specific strengths and weaknesses is research and development (R&D) Many firms today conduct no R&D, and yet many other companies depend on successful R&D activities for survival Firms pursuing a product development strategy especially need to have a strong R&D orientation

Organizations invest in R&D because they believe that such an investment will lead to a superior product or service and will give them competitive advantages Research and development expenditures are directed at developing new products before competi- tors do, at improving product quality, or at improving manufacturing processes to reduce

costs

In short, an enterprise needs to combine three these resources to create a comprehensive resource based on the current sources and supplements All resources will determine the quality of planning and implementing the strategy

1.4.2 Internal Factor Evaluation (IFE) matrix

A summary step in conducting an internal strategic-management audit is to construct an Internal Factor Evaluation (IFE) Matrix This strategy-formulation tool summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among those areas Intuitive judgments are required in developing an IFE Matrix, so the

appearance of a scientific approach should not be interpreted to mean this is an all-

powerful technique A thorough understanding of the factors included is more important than the actual numbers Similar to the EFE Matrix and Competitive Profile Matrix

described, an IFE Matrix can be developed in five steps

1.5 The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix

In the current context, before the development of science and technology, the understanding of consumers, the information explosion is always creating fierce competition for business To survive and grow, a business does not only depend on the ability to adapt to the changing market as well as behavior of consumers, the macroeconomic bu also depends heavily on building long-term strategic business

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development such as risk management, market development during the recession The impap hye! Chin pres AP eros VAG of the Government creates the challenges and opportunities The problem of business in period of crisis are to increase sales and reduce cost of sales, cut down costs, increase profits, optimize working capital Before the dramatical competition, the businesses have to review its issues as: competitiveness, lower costs, superior technology, know-how proprietary products, creation of a highly differentiated products and flexible approach to the market Dealing with a series of

questions posed, businesses often use analytical tools such as EFE, IFE, SWOT matrix,

the plan The research team included Mario Dosher, Ts.Otis Benepe, Albert Humphrey,

Robert Stewart, and Birger Lie SWOT analysis model is applied in evaluating the business, a proposal or an idea It is a subjective assessment of the data which is

** Strengths: Consider the advantages, capabilities, competitive advantage, the degree of recognition, management control, pricing, product quality, technology to maintain and leverage for development plans

“* Opportunities:based on market analysis, industry trends or lifestyle of the people to be optimistic assessment of strategic market development, and product specifications

** Weaknesses: review the context of the business to have appropriate methods for the amendment or to get out of weakness, including the proposal, gaps in capacity, financial issues, the ethical commitment leadership, the level of management control, production processes and organizational structure

** Threats: Consider the influence of politics, law, environment, the competition, the market needs to give the right solution for obstacles

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix is an important match- ing tool that helps managers develop four types of strategies: SO (strengths- opportunities) Strategies, WO (weaknesses-opportunities) Strategies, ST (strengths- threats) Strategies, and WT (weaknesses-threats) Strategies

SO Strategies use a firm’s internal strengths to take advantage of external opportuni- ties All managers would like their organizations to be in a position in which internal strengths can be used to take advantage of external trends and events

WO Strategies aim at improving internal weaknesses by taking advantage of external opportunities Sometimes key, external opportunities exist, but a firm has internal

weak- nesses that prevent it from exploiting those opportunities

ST Strategies use a firm’s strengths to avoid or reduce the impact of external

threats This does not mean that a strong organization should always meet threats in the

external environ- ment head-on

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WT Strategies are defensive tactics directed at reducing internal weakness and

ay olds Wig Coie! threats organization faced with numerous external threats and

ompressor Yee ersion

internal weaknesses may indeed be in a precarious position In fact, such a firm may have

to fight for its survival, merge, retrench, declare bankruptcy, or choose liquidation

1.6 Types of strategy

According to Fred, David ( (2011), Strategic managment, Concepts and cases, 13th

edition, Prentice Hall Press), there are following strategies:

Market Penetration Seeking increased market share for present products or

services in present markets through greater marketing efforts

Market Development Introducing present products or services into new

geographic area Product Development Seeking increased sales by improving present products or

services or developing new ones

Related Diversification Adding new but related products or services

Unrelated Diversification | Adding new, unrelated products or services

Horizontal Diversification Add on products or services relating to current customers

Two or more than two companies cooperate to form one company on the purpose of coordination

Joint Venture

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Retrenchment Regrouping through cost and asset reduction to reverse

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declining sales and profit Divestiture Selling a division or part of an organization

Liquidation Selling all of a company’s assets, in parts, for their

tangible worth Implement two or more than two strategies in the same

1.7 Quantitative Strategic Planning Matrix (QSPM)

Based on the concepts, QSPM determines the attractiveness of various strategies

by leveraging or improving the key successful factors The relative attractiveness of each strategy among alternative strategies can be calculated by determining the cumulative effect of key success factors A QSPM can include any number of alternative strategies and in a certain strategic groups of any number of strategies But only new strategies in a certain group are evaluated together For example, in a group of focused diversification, horizontal diversification, and joint venture, while a group of other strategies may include issuing divestiture to increase the amount of capital Two strategy groups are different and QSPM only evaluates the strategy in its group.Figure 1-8 includes three strategies and they are in a group

Six steps to develop a QSPM Matrix:Step_/: Listing important external opportunities/threats and internal strengths/weaknesses of the enterprise.Step 2: Assigning a weight to each internal and external critical success factor This step is similar to IFE and EFE matrices.Step 3: Listing strategic alternatives that the enterprise should consider to implement Gathering strategies into separate group if it is possible.Step 4: Finding out the attractiveness score (AS) of each strategy The attractiveness score is rated as follows: l- not acceptable; 2- possibly acceptable; 3- probably acceptable; 4- most acceptable If the success factors do not have influence on the strategy selection, do not mark them Step 5: Calculating the total attractiveness score (TAS) by multiplying the weight (step 2) with the attractiveness score (step 4) in each row Step 6: Calculating the sum total attractiveness score by adding all total

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attractiveness scores in each strategy column of the QSPM Higher scores point at a more

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1.8 Strategy implementation and evaluation

A successful strategy formulationstage does not ensure thesuccessful strategy implementation stage Implementing strategy means "change", it requires the support, discipline, motivation and effort from managers and employees All members should be encouraged to implement the chosen strategy The management issues that are considered important for the implementation phase are in harmony with strategy, performance and compensation associated with the strategy, creating a conducive culture environment, establishing consistent operation management procedures, relationship management and human resources Besides, setting annual objectives, policies, and allocating the resources is considered as the important and popular strategy implementation

The good strategy evaluation will allow organizations to take advantage of internal strengths and exploit opportunities, recognize and defense external threats and allow the modification of internal weaknesses before they become worse A necessity to evaluate the success of strategy andeffectively strategic management is combination between inspiration andanalytical intuitive: "A potentially hazardous problem is a division between inspiration and analytical intuitive that led to the strategy evaluation to be controlled by a sense analysis or evaluation that is broken in the lack of strategic alignment between problem analysis and intuitive "

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CHAPTER 2 BUSINESS SITUATION OF PTW VIETNAM LIMITED COMPANY

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2.1 Overview on PTW Viet Nam Ltd.,Co

2.1.1.Business lines and customers of PTW:

Business line:

PTW Vietnam provides quality design and sensitivity to create a green

environment and creative utility and efficient space Our services include:

Architecture

e Site Evaluation

¢ Pre-feasibility and Feasibility Studies

e Strategic Programming study

¢« Conceptual Design

« Architectural Detailed Design & Development

e Architectural Construction Documentation and Authoship Mornitoring

e Architectural Review

e Renovations and Upgrade

Architectural design of PTW Vietnam is based on an accurate understanding of the scope of the project in overall planning and design, build projects by the latest international standards and available resources Using advanced techniques and innovative ideas, we meet the performance requirements while achieving a high rate of investment orperformance Designs by PTW Vietnam has won numerous awards and recognized throughout Vietnam, China, Laos, Myanmar and Cambodia in the design

industry and publicity

PTW Vietnam has the leading experts in the design of specific projects such as

luxury hotels, luxury resorts, villas, complex buildings, sports hubs

UrbanPlanning Design

ThePTW Vietnam’s designers of urban planning createdsustainably social and environmental economy to raise the standard of living now and in the future Services of Urban Planning Design include:

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Spatial Analysis and Interpretation

° ibility Studies & Site Familiarisation

PHC RP RTE ER ersion

SWOT Analysis

Structure Plan Development

1/500 Architecture & Landscape Concept Urban Planning

Detailed Planning Design

Liaison with Approving Bodies

Assistance with Submissions

Interior Design

Interior design requiresa comprehensive knowledge of many disciplines including psychology, environment, geomancy, architecture, product design, and traditional decoration Interior design team of PTW Vietnam are experts in the arrangement of space, equipment, appliances to create a living space to suit the needs and taste of individual customers

Services of Interior Design include:

Interior Design space assessment

Office Design-Built fitting out

Interior renovation and furniture re-designed

Prepare preliminary cost estimation & BOQ

Prepare Furniture, Fixture, Equipment and Decoration Object Schedules

Design of Built-in furnitures including separate and loose furnitures

Prepare materials and finishes selection including images reflecting the mood and

ambience of each area

Landscape Design

At PTW Vietnam, landscape designers consider multiple perspectives and apply a

set of skills to develop lively and attractive urban areas and resorts Its designs take into account the interests and requirements of the neighboring communities and users

Services of Landscape Designinclude:

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e Site selection studies

+ ject feasibility analysis and programming

e Master planning and design

e Environmental - ecological analysis and planning

e Infrastructure design

Achitectural design seems quite complex but closely related A perfect design is a combination of all of the works and design phases mentioned above: from design planning, concept design, technical design and architecture, interior design and outdoor landscape gardening design The works will be crosscutting, that its function will be rationally designed is harmonious between interior design and exterior landscapes if the investor sends a request of package design

“* Target customers:

With 10 years of operating in Vietnam market, PTW Vietnam has made big efforts

to build collaborative relationships and trust with a number of large domestic and foreign investors in real estate These regular customers are strong and reliable These are also factors that help to reduce the risk to the business activities of PTW Vietnam PTW Vietnam's motto is to become the customer's own consultants rather than become partners

at work

Customers of PTW Vietnam who aredomestic and foreign investors are operating

in Various sectors as:

Table 2.1 — List of PTW Vietnam’s customers

Property investment

2 | Nam Long Investment Corporation Master Planning, Architecture,

Landscape Design

5 | Song Da Holdings Master Planning

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Corporation

6 | Becamex Tokyu Joint-Venture Architecture Design

11 | Hoai Duc Urban and Industrial Investment JSC | Master Planning

12 | Hanoi Construction Corporation-HANCORP Master Planning

14 | Halong Investment & Development Co., Ltd - Full Services

BIM

15 | Pacific Thang Long Limited Company Full Services

16 | Phong Phu Investment Joint-stock Company Master Planning

19 | Cityland Investment Company Limited Architecture Design

20 | Hanoi Housing Development and Investment Full Services

22 | Real Eastate & Finance Company-Refico Full Services

23 | HaQuang Real Eastate & Finance Investment Master Planning

Company

24 | Export & Import Bank - Eximbank Architecture Design

25 | SaiGon Hanoi Bank - SHB Architecture Design

Petrochemical

27 | Military Petrochemical JSC - MIPEC Full Services

28 | PetroVietnam Finance Land, Ha Quang JSC Master Planning

29 | Vietnam Oil and Gas Group - Petrovietnam Interior Design

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Telecommunications

30 PB MINHEUTSNGWWEUNGMBBS Corporation - | Architecture Interior Design

>

¬

33 | Mekong Aviation JSC - AirMekong Architecture, Interior Design -

Garment & Textile

34 Phong Phu Investment Joint-stock Company Master Planning

36 | Dai Mo Construction Mechanics JSC — Coma6

37 | Liberty Joint Stock Company ‘|Full Services -

~ 38 | Indochina Hoi An Golf Course JSC Master Planning, Architecture

Design 39° -BIM Kien giang Company Limited — | Architecture Design

_4I | Hanoi Trade Corporation — Hapro Architecture Design - -

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The owner of PTW Vietnam is Peddle Thorp & Walker Group, a private group of Australia, which was established by James Peddle, who emigrated from England to Australia in 1889 with PTW Architects (PTW) brand As a multinational company with over 120 years of development, PTW Architects has built a system for its offices all over the world as well as a strong brand in the architectural design industry

According to the policy of expanding market to Asia of Peddle Thorp & Walker Group, PTW Vietnam was established in the form of a 100% foreign capital enterprise under license number 011043000115 issued by Hanoi People's Committee in April 16,

2007

PTW Vietnam owns an capital investment from Australia with attempts to bring foreign style, design and management to domestic practices while respecting the laws of Vietnam as well as the cultural environment that the company is operating

With a team of professional and talented architects, PTW has designed the internationally innovative projects such as the National Under-water Sports Centre of Beijing Olympics2008, Baseball court Olympics London 2012, Jumeirahpalm Island - The United Arab Emirates Being in Vietnam in 2002, PTW Vietnam showed remarkable

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capacity for nearlylarge and small 100 projects, from the North to the South PTW is knoWi)fbf£aÐtesitr JiEtt@fel9fnovative and environmentally friendly design As the chief architect for IPH Business Center —Xuan Thuy, FPT Office - Pham Hung Street, Garden City apartment - Ho Chi Minh City, BECAMEXLake View Villas - Binh Duong, Sora Garden - Tokyu Becamex Binh Duong, Crown Plaza hotel - Phu Quoc Crown Plazahotel -Vientiane, Laos Two offices in Hanoi and Ho Chi Minh City with more than 70 employees, PTW Vietnam is evaluated as a of leading foreign architectural firm

Figure 2.1— System of representatives and projects of PTW Group

Gris)

PTW is an international corporation with offices throughout Asia Every office

will HOKE GAMREPRS UM BSAGnY HSMMPon in the group and sharing information, human

resources and projects

DEPUTY GENERAL DIREC TOR DEPUTY GENERAL DIRECTOR DEPUTY GENERAL DIRECTOR

HCM OFFICE Business & Finance › HANO! OFFICE

HCM OFFICE EXECUTIVE DIRECTOR HN OFFICE

term Council’s members, including the President, have the right to authorize in writing a representative to attend the meeting and vote on his behalf, in other words, is to carry out

the powers and rights of a member in accordance with Vietnam Law for the authorization, and the provisions of the Charter of Company The Board of Supervisors consist of the owners and members of subsidaries The management is conducted under comprehensively online control model

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PTW Vietnam has offices in both Hanoi and HCM City Its headquarters is located

in Br (Bisbréssot Pree Varstan Thai To Street, Hoan Kiem District, Hanoi, representative office at Centec, building, 72-74 Nguyen Thi Minh Khai Street, Ward 6,

District 3, Ho Chi Minh City

With more than 70 employees, PTW Vietnam are divided into 8 departments of Architecture design, Planning and Interior design and 3 functional departments, including: Administration - Human Resources, Planning - Project and Accounting — Finance

The management system which is compact, suitable to small and medium enterprises, in the direction of centralized management, is implemented as a functional

Strategy

The benefits of the decentralized management system according to structural parts

is recognized, each design office is assigned about 2 or 3 projects with the different progress The allocation of projects by departments showed the effective implementation

of the strategy as follows:

- Clear accountability between each design department, each individual in the group

- Promote architects’ creativity and capacity

- Be able to control works and competition among groups

- Manage the quality of the products and project progress

- Create opportunities to develop management capability of design team

leaders

2.2 Business result of PTW Vietnam in 4 year (2009-2012)

Since Vietnam was officially admitted as the 150th member of the World Trade Organization WTO in November 7th 2006, Vietnam had to change some policies as well

as opening some areas for foreign investors in accordance with international standards This is a great opportunity to develop PTW ‘s business to Asia, a potential land Due to market demand as well as the adjustment of policies, PTW has changed its mechanisms from representative offices of foreign traders to the company of 100% foreign ownership

After receiving the investment license by the Hanoi People's Committee in April

16th, 2007, PTW Vietnam Co Ltd has quickly enhanced human resources to focus on

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implementingits strategic objectives in Vietnam From a representative office of foreign business with 7 employees, PTW Vietnam had 35 employees only after two months

With strong brands, PTW has designed many large projects From 2009 to 2012, the company achieved the sustainable development and positive results that can be consolidated as the following table:

Table 2.2- Business statement in 2009-2012

Income statement as a consolidated financial statement, which reflects the results

of operations and business as well as the implementation of the responsibility, the obligation of the enterprise for a period Items on financial statement can help to test, analyze and evaluate the implementation of plans and budgets, cost of goods sold, sales, other expenses Income statement also enables to evaluate development trends in different periods

Based on table 2.4, output is gradually increasing over 147% in 2010 compared to

2009, 121% in 2011 compared to 2010, but decreased -30% in 2012 compared to 2011 This is the trend of the economy due to the economic crisis

However, profit of PT Whas achieved remarkable increase despite of a reduction in

2012 compared to 2011

Net profit margin = (Profit after tax) / (Net Revenue) x 100% This ratio reflects the final business results of its operations: every 100 in net revenu, how much profit you can earn The nature of this calculations is used to determine the rate of financialratios on business

to the total net revenue Net margin profit reached 11.94% in 2009, 2.44%, in 2010 but

in 2011 it increased 16.82%, in 2012 due to economic fluctuations, it dropped to 9.93% lower than in 2011

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Profit dramatically decreased in 2010 because PTW Vietnamincreased expenses to

©xPawiftfS8iipridtt0l & HCM including office relocation, doubles-sized office space, equipment investment, copyrighted software, fit-out costs and salary costs of an increase from 33 employees in 2009 to 65 employees in 2010 (new hired 32 employees)

The financial results of PTW was relatively stable but decreased in 2012 because the world’s

economy as well as Vietnam’s economy seemed to fall into recession, especially, that the real estate market in Vietnam has beenfrozen made many investors, who are customers of PTW, trap intofinancial difficulties Therefore, to share with difficulties of customers and with long-term

strategy in Vietnam market that ensures no major decline in revenue and occupy more market share in Vietnam, PTW issued the policy to decrease the price while maintaining quality of the

product, as a result this policy directly affects on its profitability in short term

2.3 Analysis on business environment of PTW Vietnam Ltd.,Co

2.3.1 Macro environment analysis (PEST model)

In fact, macroeconomic situation is one of the important factors for business plans

However, macroeconomic in 2013 will be continuously forecasted difficult, itis unpredictable for businessmen to seize coming business environment with interest rates,

exchange rates, inflation The macroeconomic fluctuations is advised to be seen as a major risk

s* Economic analysis:

- Vietnam economy:

Vietnam's economy at the end of 2012, GDP growth reached 5.08% GDP growth is

not achieved as originally planned by many causes However, the main reason is that Vietnam have made macroeconomic stabilization objectives with policies to closely control the money supply and inflation that decline demands Along with a number of uncertainties in 2012 as non perforing loans (NPLs), the depletion of production,

especially a series of small business bankruptcy due to difficulties in capital markets

caused 2012 a year of much uncertainty and growing exhaustion.Macroeconomic indicators in 2012 as follows:

o GDP growth rate of 5.08%, a lowest in recent 4 years: low credit growth and high interest rates, consumer, production and private investment hardly grows

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