G1 00107 CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY OF PV OIL VUNG ANG IN PERIOD 2010 - 2020 BÁO CÁO DỰ ÁN CAPSTONE XÂY DỰNG CHIẾN LƯỢC KINH DOANH CỦA PVOIL VŨNG ÁNG GIAI ĐOẠN 2010 - 2020

G1 00107 CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY OF PV OIL VUNG ANG IN PERIOD 2010 - 2020 BÁO CÁO DỰ ÁN CAPSTONE XÂY DỰNG CHIẾN LƯỢC KINH DOANH CỦA PVOIL VŨNG ÁNG GIAI ĐOẠN 2010 - 2020

TY GRIGGS UNIVERSITY

GLOBAL ADVANCED MASTER BUSINESS ADMINITRATION PROGRAM

CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY OF

PV OIL VUNG ANG IN PERIOD 2010 - 2020

Group No: 4 - Gemba.v01 Student’s name:

Nguyen Tien Dung Tran Tien Dai

Bui Quang Hoan Nguyen Van Thanh

VINH, 2010

CONTENTS

CONTENT CONTENTS

SYMBOL LIST OF ABBREVIATIONS

4.1 Using the theory

4.2 Using statistical methods

Structure of the study

Chapter I Establishment theoretical construction business strategy

1 The concept of business strategy

2 The role of business strategy

3 Analyze the business environment

- The pressure of competing suppliers

- Competitive pressure from customers

- Pressure of competition from substitute products

- Competitive pressure internal branches 3.3 Internal environmental analysis

The status of the petroleum storage - providing clues and distribution system petroleum products in North Central Forecasting gasoline demand in the region and vicinity Macro environmental analysis

Factors Government and economical solutions Political factors

Social factors Natural elements Technology factors Analyzing competitive environment Competitive pressure of suppliers Competitive pressure from customers Competitive pressure from potential competitors

Competitive pressure from substitute products

Competitive pressure internal branches Environmental analysis of enterprises Profile of the implementation of business plans produced in

2009 by Vietnam Oil Corporation (PV Oil) Internal environmental analysis of PV Oil Vung Ang History

Activities Logo PVOIL Services and products business of PV Oil Vung Ang Infrastructure

Human source Finance

Technology Manufacturing business

4.8 Organizational structure

4.9 Investment and development

5.2 Analysis matrix strategic position of the business

Chapter HI Selection strategy

wel Solutions developed infrastructure

2.2 Solutions identified products and services to target market

2.3 Financial and human solutions

2.4 Solutions to promote business

APPENDIX Overview of socio-economic development of provinces in

the North Central region and vicinity

Ha Tinh province

Information

List of investment projects in Ha Tinh affect the consumption

of petroleum as fuel, reactors,

Nghe An province

Information

Industrial Zones

List of projects calling for foreign investment period 2005 -

2015 Nghe An affect gasoline consumption

Quang Bnh province

Information

The key projects are related to consumption of petroleum

Democratic Republic of Lao People

Information

Overview of traffic in the area

Road Network

- Highway 1A

- Ho Chi Minh Road

- Roads connecting the National Road No.1,and Ho Chi Minh

Viet Nam Oil and Gas Group

PtroVietnam (Viét Nam Oil and Gas Group)

PetroVietnam Oil corporation Viet Nam National Ptroleum Corporation Strengths (S), Weaknesses (W), Opportunities (O) and Threats (T)

Political, Economic, Social, and Technological factors

Lao PDR Diezel oil Kasosen Fuel oil PetroVietnam Oil Processing Distribution company Deadweight tonnage

Official Development Assistance Comsumer price index

International Organization for Standardization External Factor Evaluation

World trade Orgnization Internal Factor Evaluation Financials Strengths Competitive Advantage Enviroment Stability Internals Strenghts

SWOT matrix SPACE matrix Graph formed from the matrix space Projects calling for investment in Nghe An

35

36 49

FORWORD

1 Why choose research projects

Petroleum is found strategies, essential not have any alternative source of energy efficient while gasoline demand increasing along with economic and social development of the country

In the context of integration with the anti-competitive monopoly of some particular business and industry, recently the state has the solutions to allow free enterprise to import and export business petroleum market in Vietnam, and have applied the decree 84/Gov instead of Decree 55/Gov of the Government on the conditions stipulated for trading petroleum market so that petrol will do more competitive

North Central is a poor land but in recent years there have been many changes in construction investment and strong development of urban areas, economic zones, industrial and economic restructuring in the direction of industrial progress services that have great influence petrol demand in the economic

development of the local society

Petrol market in North Central ever have four main business is providing clues petroleum products on the market, including Nghe Tinh petroleum company (Petrolimex Nghe Tinh), Quang Binh Petroleum Company ( Ptrolimex Quang Binh), Military Petroleum Company (MiPeCo), and PV Oil Vung Ang - a joint stock company with capital contributed by the dominant male PetroVietnam Oil Corporation (PV Oil) in system of Vietnam Oil and Gas Group (PetroVietnam)

But among the companies supply petroleum products in the region only Petrolimex full system from Petroleum port and storage, petroleum station, petrol and oil trading agents are arranged around the large engraving area with a market share up to 75% at present Therefore for a new business join into the market in the central region is necessary to prepare a competitive and strategic penetration of the market share accounting for the business to do that PV Oil Vung Ang should have a

proper look at the characteristics of the market, analysis of external and internal factors to find solutions to business strategy, business plan in the short, medium and

long term to achieve development goals best to survive and sustainable

development

Manipulate the knowledge learned from MBA programs, especially in subjects with management strategies required to do exercises to make great graduation report, members in Group 4 Gemba VO1 agreed to selected enterprises

PV Oil Vung Ang which have a member of the group is working in enterprises to research topics:

"Building the business strategy of Vung Ang Petroleum jonit stock Company (PV Oil Vung Ang) period 2010 to 2020

2 Objective study

With the aim of studying characteristics of market reviews petrol in the region, research and analysis of factors inside and outside, SWOT analysis model of the unit and competitors from which to find the solution Legal market penetration and build business strategies of PV Oil Vung Ang period 2010 to 2020 to reach a solution and implementation roadmap for building the business strategy of PV Oil Vung Ang in Ha province Static and vicinity 2020

PV Oil Vung Ang

4 Methodological

4.1 Using the theory

GRICSS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

Theory construction business strategy, SWOT analysis, analysis of competitive pressure, analyze the macro environment, industry environment and internal environment analysis of the business environment, analyzing the factors in externa! and the related matrix model

4.2 Using statistical methods

Collect, statistics and data processing by the "Description"

4.3 Data analysis:

Analyze secondary data sources from the state management agencies: development planning system reserves of crude oil and petroleum products of Viet

Nam in 2015 with a vision to 2025, the source of information on the reported power

death of the People's Committee of Nghe An, Ha Tinh, Quang Binh on development planning system fuel stations and categories calling for investment related to consumption of petroleum, the information strategic research institutes, competitors Company Petrolimex Nghe Tinh and related information has been published

Structure of the study

Besides the introduction, conclusion, references, index Content of the

subjects divided into three chapters:

Chapter I: Theoretical basis to build business strategy

Chapter I: Analyzing the business strategy of PV Oil Vung Ang

Chapter III: Select the business strategy of PV Oil Vung Ang

GRIGGS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

CHAPTER I THEORETICAL BASIS TO BUILD

BUSINESS STRATEGY

1 The concept of business strategy

According to Johnson vaf Scholes: "Strategy is the direction and scope of an organization to gain long term competitive advantage for organizations through the format of its resources in the changing environment, to meet satisfy market demand and expectations of stakeholders

By Brace Henderson: "search strategy is a prudent action plan to develop and combine competitive advantage of organizations What difference between you and the competition is the basis for the advantage of you " Such strategies are:

* Objectives that businesses try to reach the long

* The products, services? Market any business to compete

¢ Companies will be how to work better than competitors on the market (advantage)?

¢ What resources do (skills, assets, finance, relationships, technical capacity,

equipment) need to be able to compete (the resources)?

* The factors from the business environment affecting the competitiveness of enterprises (environment)?

* The values and expectations that people have the inside and outside the enterprise needs (the capital contribution)?

Comment by Dereck point of F Abell process of decision making, to develop strategies for business units must include three elements, namely:

1 Customer needs are met or what (What)

2 The group of customers who are satisfied or (Who)

3 The ability to differentiate or other ways in which needs are met (How)

Three factors determine the decision this way the company will compete in a business or a industry

GRIGGS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

2 Role of business strategy

The role of business strategy for enterprises is shown on the following aspects:

- Business strategy helps businesses identify the purpose and direction to their future as guiding all activities of the enterprise

- Business strategy helps companies capture and take advantage of business opportunities, and proactively take measures to deal with the risks and threats in the marketplace business

- Business strategy contribute to improving the efficient use of resources, strengthening the position of the enterprise to ensure continuous business development and sustainability

- Business strategy creates a solid base to set out how business decisions in accordance with the fluctuation of the market It creates a solid basis for research and implementation, investment and development training human_resources, operations and expand markets product development

Original point of success or failure depends on one important factor is the enterprise business strategy is how

Strategy process is a complex process, including: strategic planning, implementation strategies and evaluation activities require to be done continuously and regularly

3 Analyze the business environment

Analyze the business environment is a process by which the strategic conduct inspection, consider the various environmental factors (economic environment, cultural environment, socio-environmental technologies, suppliers , distributor ) and identify opportunities or threats to their business

3.1 Macro Environment

Macro-environment where businesses have to start looking for opportunities and threats may appear, it includes all the factors and forces that affect performance

QRIGSS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

and results of implementation of business, including: economic environment; environmental technology; environmental-cultural society; natural environment; government environment, legal and political; global environment

- Changing technology impacts on many parts of society

- Technology includes: institutions, activities related to creating new knowledge and the knowledge that shifting to the output of our products, processes and new materials

- Change of technology, including creation and destruction, both opportunities and threats

Technological change may impact on the height of the barrier in the structure and shape Left sector take root

- In the global space, opportunities and threats of technology to all the business by buying from outside or self-created new technologies

Cultural and social environment

- Concerning social attitudes and cultural values The cultural values and

social attitudes create the foundation of social changes and technological conditions,

political-legal, economic and demographic Social change also creates opportunities

and threats

GRIGGS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

Demographic environment

- The demographic segment in the macro environment related to: population, age structure, geographic distribution, ethnic community, the distribution of income

Political and the law environment

- The political factors and laws also impact the extent of the opportunities and threats from the environment

- The key is how interaction between business and government,

- Changes to, this segment will affect significantly the competitive philosophy, new policies relevant state management, antitrust laws, tax laws, the industry choose to adjust or priorities, Labor Code Areas in which state management policies can impact operations and profitability of the ability of the industry or business

- On a global scale companies also face a range of issues of concern in political law, trade policy, protection barriers are calculated country Global Environment

- Including: The global market is concerned, the current market is changing, the political event of international importance, the institutional features and cultural base on the global market

- Globalization of the market creates both opportunities and threats

- Can awareness of features distinct cultural and social institutions of the global market

3.2 Sector Environment

The strategic task is to analyze and judgments of the competitiveness of the industry environment to identify opportunities and threats for enterprises in the model of five competitive pressure of M Porter

Figure I.1 Model of five competitive pressure M Porter

Potential competitors

Competitiveness of the

Negotiating power | enterprises are in the market Negotiating power

Challenges of the product

alternative service instead

Competitive pressure of suppliers

The number and scale providers: The number of providers will decide to competitive pressure, the power to negotiate their industries and enterprises If the market only a few vendors have a large scale will create competitive pressure, affects the entire production and business activities of the sector

Competitive pressure from customers

Customers is a competitive pressure can directly affect the entire production

and business activities of the sector

Customers are divided into 2 groups: Group and individual client groups distributors Both groups will pressure the companies about price, product quality, service and accompany them as control competition in the industry through buying decisions

Similar pressures from the suppliers we consider the impact on competitive pressure from customers for industry scale, importance and cost of conversion

customers, customer information

Especially when analyzing the distribution we must note the importance of them, they can directly go deep into the right menace within the enterprise Competitive pressure from potential competitors:

By M-Porter, a potential rival firms not currently available in the industry but may affect the industry in the future Potential competitors more or less pressure to their strong or weak branches will depend on the following factors

+ Health attractiveness of the sector: This factor is expressed through performance indicators such as profit-billion, the number of customers, number of enterprises in the industry

+ The barriers to join industry: the factors that make joining the industry

kmot difficult and more expensive as dependent on technical factors, capital and

commercial factors: distribution system, trade performance, system customers, the specific resources: Raw material inputs (controlled), Degree, invention patents, human resources, protection of the government

Competitive pressure from substitute products

Of products and services instead of products and services can meet the demand equivalent to the products and services in the industry

You can always get such then get out of the competitive pressure on the main product instead:

Competitive pressure internal branches

GBIGGS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

Enterprises doing business in the industry will compete directly with each other to create back pressure on industry to create a competitive strength In a sector the following factors will increase competitive pressure on rivals

+ Bad sector: The demand, of growth, the number of competitors

+ The structure of the industry: Industry concentration or dispersion

* Industry sector is scattered with many businesses competing with each other but no business can afford that dominates the remaining enterprises

* Industry focus: Industry only one or a few companies holding dominant role (control-competition can be considered a monopoly)

+ The barrier retreat (Exit Barries): Same as barriers to join industry, barriers to withdraw the factors making for withdrawal from the enterprise sector difficult:

* Barriers to technology, capital

* Constraints to workers

* Tying the government, organizations involved (Stakeholder)

* The binding strategies and plans

3.3 Internal environmental analysis

Environmental analysis of enterprises are evaluating the review of the business side, the relationship between the components indicate the strengths and weaknesses that companies meet Phair is a premise for utilizing and promote the strengths and limitations, overcome and repair the weaknesses that exist

As we know, within the enterprise with numerous factors affecting the operation of the business but we must affirm the fact that most can not assess all the factors that

by the number of invisible with its big However, in order to assess the internal situation of the enterprise necessary to point out the main factors within the business that our presence can be represented in the work situation of enterprise, the factors which are: Human Resources, manufacturing work - working career, marketing

GRIGG “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

work, the work of financial accounting, research and development, management and strategic planning

4 SWOT analysis

SWOT stands for four letters Strengths (S) Weaknesses (W), Opportunities

(O) and Threats (T), provide a SWOT analysis tool strategy, review and evaluate

the position, the direction of the company or a business proposal SWOT suitable work and analysis group, is used in business planning, develop strategies, evaluate competitors, marketing, product development and services Strengths and Weaknesses are internal factors of the company Opportunities and Threats are external factors that impact the SWOT analysis of different factors affect the relative competitiveness of the company SWOT is often associated with PEST (Political, Economic, Social, Technological analysis), the market analysis and assessment of potential through external factors on aspects of political, economic, social and technological

Table 1.1 SWOT matrix model

S1: List the strengths in | - Use strengths to exploit | - Use strengths to evade order of importance opportunities risks

S2:

WI: List the - Limit the weaknesses to | - Minimize the riskand weaknesses in order of | exploit opportunities evade threats

GRioos “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

the business and build long-term goals, Pomegranate choose among alternative strategies Sometimes long ttrong the strategic planning of strategic management is also called "strategic planning" The more specifically the strategic management and planning strategy and planning strategy is the strategic management including the further implementation strategies and evaluation strategies

In the process of strategic planning, work out clearly the duties of the business is the interest of not only makers but also the high level of interest in the implementation A goal is clearly very useful to set out the objectives and strategic planning Strategic planning phase is carried out through the following steps:

Table I.2 Model workflows in the strategic planning stage

PROCESS Workflows CONTENTS IMPLEMENTATION

Pointed out the role, nature and

functional tasks ¬¬

content of basic business

- Pointed out the role and nature of the |

; external environmental assessment,

; environment

Strategic content and assessment

Planning internal environmental Nature of the audit, evaluate the work

activities of the company

analysis and selection

strategy Use of each form, combined

assessment and quantification, select

GRIOSS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

Based on the principles and standards set out, the enterprise conducted to compare the strategic plan for the planned with the aim to find an appropriate business strategy to implementation Strategy was selected to be the optimal strategy or at least be consistent with the conditions and circumstances enterprises Short, in addition to the theoretical basis of the subject Strategic Management Group 4 - Gemba VOI also collected and collect information in other relevant documents within the research themes to make the "Building a business strategy of

PV Oil Vung Ang period 2010 -2020."

CHAPTER II ANALYSIS OF BUSINESS STRATEGY PV Oil VUNG ANG

1 Analysis Petroleum market in the North Central Provinces

1.1 The state petroleum market in the region

According to statistics provided by the petroleum business unit of time that the level of consumption of petrol for the region by the percentage as follows:

- Diesel making up a very large, up to 54.9% of the petroleum,

- Fuel accounts for 34.8%;

- Mazut up 4.7%;

- The remaining 2.7% as gasoline and aircraft fuel 2.8%

By economic region is mainly agricultural, forestry and fisheries, the amount

of diesel consumption for vehicles water (fishing, water transportation), mining and forest products, irrigation, agriculture accounts for specific proportions Parallel

with the formation and development of new urban areas, industrial zones of fuel

consumption for cars, motorcycles also increased rapidly There were factories, enterprise use mazut as fuel furnace (steel production, cement ) Currently Nghe

An, Ha Tinh, Quang Binh was initially prospersd in business restructuring international, rapidly growing industries mining, forest products, aquatic products

According to PetroVietNam institute research, the amount of petrol consumed in the provinces of Nghe An, Ha Tinh and Quang Binh in 2008 as follows:

Table II.1 Statistics petrol consumption in Ha Tinh area and vicinity

No Category Nghe An | Ha Tinh | Quang Binh | re export-to

There are nice petroleum storaged in the area hubs including the facal point

of six warehoses Petrolimex have been arranged around the area but only a small

Location capacity, | Port, DWT function

2 | Dinh Huong Thanh Hoa | Petrolimex 14.900 none

Petroleum sea

9 | Cua Viet Quang Tri | 3000 1.000

Company

Reviews:

GRIGGSS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

- Storage - Vung Ang - PV Oil Vung Ang: large scale, with export-petroleum wharf for ships with tonnage to 15,000 DWT With trading, storage and transportation, warehousing petroleum port of port fuel oil storage systems of PetroVietnam Oil Corporation

- Storage Dinh Huong Thanh Hoa (Petrolimex Thanh Hoa): Warehouse construction time subsidy, so there is no port to import goods should enter only by car from Phu Ly Mainly contained in national reserves, low business efficiency

- Storage Airport Gold Star (the military): The aircraft fuel, the transportation network of roads

- Storage - Ben Thuy port-Nghe An (Petroleum Nghe Tinh): Ben Thuy port

in the ship only a small load to 1200 DWT There are online storage tube connected

to the port to import goods from Nghi Huong port Nghi Huong

- Storage Port Nghi Huong-Nghe An (Nghe Tinh Petroleum Company- Petrolimex): Port Nghi Huong was only in 5000 DWT tanker load Warehouse can accommodate 14.000m3 Have moved to online pump store Ben Thuy

- Port storage cluster Nghi Huong - Ben Water supply is mainly for the petroleum sector Nghe An - Ha Tinh and re-exported to Laos along National Highway 8A

- Disadvantages of storage ports are located in Nghi Huong Cua Lo resorts should not be allowed to survive long term People's Committee of Nghe An province has asked Petrolimex necd planning to replace the position

- Storage Gianh-Quang Binh (Petrolimex Quang Binh): Port Gianh only in the small vessels of 1,000 DWT, now regularly being silt Warehouse Gianh only as transshipment of petroleum Petrolimex for Quang Binh,

- Storage, Port Cua Viet —Quang tri (Cua Viet Petroleum joint stock Company): the rive were sedimentation, only enter the ship to 1.000DWT oil Warehouse functioning petroleum transshipment to Quang Tri No conditions to upgrade port

RIGGS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

- Storage - Thuan An Port in Thua Thien-Hue (Petrolimex Thua Thien-Hue): Thuan An Port imported only 1,000 DWT ships Warehouse functioning petroleum transshipment of Petrolimex to Thua Thien Hue and Quang Tri, re-exported to Laos via Highway 9

(Source of Information Demonstration Project under Construction General Petroleum Depot Ang)

1.3 Forecasting petrol demand in the region and vicinity

Do not eligible (for funding and time) to calculate the predicted gasoline demand in Ha Tinh and neighboring provinces, to ensure objectivity and reliability

of data forecasting, we use data of the project "Adjustment planning to develop petroleum storage system in the whole country by 2010 and orientation to 2020" the forecast demand for gasoline consumption by energy expert group Institute of Development Strategy - Ministry of Planning and Investment implementation Results are quoted as follows:

Table II.3 Forecasting gasoline demand in the North Central

TT | fuel types Needs (m3)

- The demand for consumption in Laos

Ability to deliver petrol from Ha Tinh to Laos in recent years only by re- export of data from Petrolimex Petroleum Company for the Nghe Tinh starts with 25,000 m3 per year Programs in cooperation between Laos and Ha Tinh province Vung Ang port cluster mining cooperation with direct petrol Vung Ang port with

GRIGSS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

petroleum business enterprises in Laos, the supply of goods annually to Laos will achieve growth of 80-10% Predicted re-export or import goods entrusted to Laos via Vung Ang port oil (PV Oil Vung Ang) as follows:

Table II.4 Predicted re-export or import goods entrusted to Laos

Such the petrol market is very large and development in Ha Tinh province and the region surrounding it has opened a business opportunity for business enterprises including PV Oil Petroleum Vung Ang, opportunity the data will belong

to one or both opportunities for division rivals, make sure that this heavily

influenced the construction of the business strategy of each enterprise

"Sources of Information Demonstration Project by the construction of the General Petroleum Depot Ang"

2 Macro environmental analysis

2.1 Factors Government and economical solutions

In the context of the global economy are not out during a recession, the economy in the country is facing many difficulties Along with the trend of world government of Vietnam has been implementing more drastic measures executive, is fighting inflation in 2008 and early 2009 as against economic recession and the end

of 2009 is stable macroeconomic , maintaining economic growth and towards sustainable growth

The solution is: Fiscal policy, monetary policy, attract investment, boost

production, expand markets both at home and abroad

GRIGGS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

The government has given the stimulus package to stop decline, the first stimulus package was implemented to support the interest rate of about 17.000 billion, stimulus package 2, with total capital of about $ 8 billion, to support interest loan of AN medium and long term and enable the investment

The government also implemented a series of measures of monetary policy flexibility: Early in maintaining the type of low interest rates, the basic interest rate

is 7%, reduced rate of compulsory reserve rate from 10% to 5 %, increasing the money supply, banks boost credit growth Last year to adjust the basic interest rate

to 8%

According to a report published socio-economic situation in 2009 by the General Statistics Office published on December 31, in 2009, Vietnam has completed two goals against a tough economic recession and maintain speed of reasonable economic growth, sustainable same time actively preventing inflation higher again

This result confirms once again consensus the heart of the entire Party, people and all operating policies flexible macroeconomic performance of the Government

This remarkable success in the context of the financial crisis of some major economies in 2008 have pushed the world economy, including Vietnam in recession, to narrow considerably the export market , capital markets, labor market and negative impact to many fields other socio-economic

GDP target in 2009, Vietnam's economic growth rate reached 5.32%,

exceeding the target set out and stand on in the economy have higher growth in the region and the world Industrial production will get out of stagnation in the early months and years have increased 7.6% Agricultural production is seasonal with the production of rice reached 38.9 million tons, up 165,700 tons compared with 2008 Balanced macroeconomic stability continues

Although capital investment from outside reduced, but domestic investment was off information should allow them to develop investment reached 7.042 million

in the billion, up 15.3% over 2008

Budget revenue estimates to reach the whole year and overspending the budget to ensure that the National Assembly is not to exceed 7% of GDP The curb inflation, consumer price index increased in December 2009 compared with December 2008 increased 6.52%, lower than the target of 7% National Assembly index average in 2009 was 6.88 %, the lowest in six years

Poverty rate declined from 13.4% in 2008 down to 12.3% Culture,

education, health and other social sectors achieved remarkable achievements

Found for petrol, the Government issued Decree No 84/2009/Gov on

petroleum business which shall specify the conditions for licensing business import and export of petroleum, production conditions export petroleum, petroleum distribution business and especially retail price regulations on gasoline Decree officially take effect from 15-12-2009 is applied instead of the Decree 55/2007/Gvo issued on April 6, 2007

Besides the principle affirmed petrol price is made according to market

mechanism, with the management of State Decree clearly, the case of fluctuating

components as the basis for cost reduction within the 12% compared to current retail prices, minimum times between two consecutive increase petrol prices or maximum time between two consecutive off times of 10 days and the case of fluctuating components make price increases in base rates to 7% compared to current retail prices shall be entitled to increase retail prices accordingly

Case fluctuation components as the basis for cost reduction of 12% compared to current retail prices, after the competent authority to apply measures to regulate the financial provisions of the law ( import duty, price stabilization funds ), traders continued to reduce the focal point of their retail price, unlimited period

of time between 2 times and reduce the number of discounts

GRIGGS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

Case fluctuation components make up the base price at 7% compared to current retail prices shall be entitled to increase retail prices accordingly Where the components as the basis for price increases exceeding 7% to 12% compared to current retail prices, the trader is a clue right price increases with an increase of 7% of the cases mentioned above, plus 60% basis of the price increase

from 7% to 12%, 40% longer uses price stabilization fund to offset under the

guidance of the Ministry of Finance

Case fluctuation components as the basis for price increase of 12% compared

to current retail prices or price increases affect economic growth - and social life of the people, the State public pressure measures to stabilize prices through the operating tax, and price stabilization fund in accordance with current law

For retail stores and petrol, to be issued a certificate of business eligibility petrol, must meet three conditions: store location in accordance with the approved master plan; under construction and site proper equipment regulations; managers, employees direct business professional must be trained on fire safety engineering, fire fighting and environmental protection under the current regulations

The petroleum traders have been licensed business import and export of petroleum or certification eligible petroleum business before this Decree takes effect shall not work procedures for two types of paper to above

The petroleum business when they are upgraded to comply with the planning has been approved by the competent authority under the provisions of this Decree The petroleum business is not planning to be consistent with the competent authorities have approved the route upgrade, relocation to ensure appropriate planning

GRIGSS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

macroeconomic being maintained Vietnam is considered as a safe place to invest in major projects including the production and business investment products such as oil refineries Dung Quat, Nghi Son Refinery combination of warehouse storage and That have a direct impact on the industry and the petroleum business in the country

so the price of petrol in the country in 2009 only small fluctuations and is always the government take measures to adjust in time

2.3 Social factors

Economy to develop the country to focus strongly pushing industrialization and modernization from urban to rural areas, appear more and more export

processing zones, industrial parks and North Central are transferred service with

the socio-economic development of the country, the quality of life of the people of Vietnam are also improving So for low-income people in rural areas to shop a tool

of agricultural machinery or a motor and urban shopping a car is not small However, world oil prices in recent years have also delivered the high petrol price should be in the country are directly affected by world prices that the cultivation of domestic petroleum industry also faced with the reality intense years is not flat, it is the illegal trade across the border petrol

2.4 Natural elements

- The batch of oil in the continental shelf of Vietnam has large reserves and good quality oil, the solution to overcome the environment pollution, compliance issues related to the eight environmental protection and ensure environmental standards Vietnam market regulations

- Vietnam has many good conditions for the natural elements with long coastlines and large rivers systems so very convenient to build the port warehouse storage systems, import and transportation of petroleum by river Thus the issue and trading petroleum products also have favorable effects

2.5 Technological factors

GRIGSS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

business of petroleum on a large scale and modern , import-systems, storage,

delivery of goods installed equipment automation and process management according to ISO

Dung Quat oil refinery of PtroVietnam have done to overcome problems of technology and put into operation with a capacity of 100%, meet the 30% of petrol demand in the country

3 Environmental analysis sector

3.1 Competitive pressure of suppliers

The country has 11 enterprises to import petrol, about 300 total petroleum

dealers, 9000 dealers and petrol stations belonging (particularly with Petrolimex VN

1720 Retail Direct), and now has some big enterprise joint into the market and has made a breakthrough as the PetroVietnam Oil Corporation (PV Oil) the member of VietNam Oil and Gas Group

Effective from December 15, 2009, Decree No 84/2009/Gov (hereinafter

referred to as Decree 84) of the Government's petroleum business will officially be applied instead of the Decree 55/2007/Gov issued on June 4, 2007 was the licensing

of wholesale prices for petroleum companies follow the market mechanism Accordingly, instead of only 11 clues petroleum business before and are all state- owned enterprises, new regulations for traders just a business (not required of state- owned enterprises) are licensing business import and export petrol so the number and size of suppliers and increased competitive pressure on higher, but that only a third supplier is a large-scale Ptrolimex , PV Oil and Military Petroleum Company, the enterprise has its own advantages such as Petrolimex a business was established early have been used in the Vietnam market over 50 years, the system not exist,

large business, with extensive experience in oil and gas business is the largest market share in Vietnam more than 50% For petroleum enterprises MiPeCo there specific advantages of the military branches Although PV Oil was established later,

PV Oil is a member of Vietnam oil and gas group — the Vietnam's leading enterprise today, with annual state budget by nearly 30% of the total revenue of the country,

PV Oil has many advantages in resources, financial strength, technology and resources so the potential PV Oil quickly grew and became a rival concern of other businesses in the industry All three companies had strong competitive pressure, affecting the entire production and business activities of the petroleum industry in Vietnam

3.2 Competitive pressure from customers

Customers is a competitive pressure can directly affect the entire production and business activities of the sector

+ Customers are divided into 2 groups:

+ Retail Customers: selling directly to users through the petrol dealers business + Distributor: The total petrol dealers, trading agent petrol, and industrial

customers

Both groups will pressure the companies about price, product quality, service and accompany them as control competition in the industry through buying decisions

For retail customers, the Ptrolimex has many advantages for enterprise

network has retail outlets and scale than its competitors

Also distributed to clients, the PV Oil has many advantages because of PV Oil has been the strength and prestige of Vietnam Oil and Gas Group

3.3 Competitive pressure from potential competitors:

According to M-Porter, a potential rival firms not currently available in the industry but may affect the industry in the future and in fact the state has made the policy allowing foreign companies and venture company by trading in petroleum

GRlo©sS “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

markets gasoline in Vietnam but barriers have joined the industry more difficult and costly but the attractiveness of the sector higher, the number of customers using the fuel gas oil growing while the number of business enterprises in the industry and have less barriers to joining and dependent factors follows:

- Skills: Must have warehouse system ports meet the conditions required more storage and transportation to ensure safety, fire prevention, environmental sanitation and prevention of, response to incidents oil spill

- Capital: Working Capital and large depends greatly on world oil prices

- Factors commercial: Must have distribution systems, branding, customer

systems

- The specific resources: sources leading to mainly imported from abroad, from fourth quarter 2009 Dung Quat oil refinery produced 30% consumption of the country also had to be part found the source, the year before had the protection of government subsidies and price stabilization policies

3.4 Competitive pressure from substitute products

Of products and services instead of products and services can meet the demand equivalent to the products and services in the industry

Petroleum fuels increasingly exhausted so many countries have also

conducted searches, patents, inventions and alternative energy sources like wind,

solar, electric energy

Under these circumstances PV Oil has built factories processing bio-ethanol fuel in Phu Tho, Binh Phuoc and sales of test in some petrol station in the system of

PV Oil

3.5 Competitive pressure internal branches

Enterprises doing business in the industry will compete directly with each other to create back pressure on industry to create a competitive strength Market petroleum Vietnam currently has 11 suppliers, but power is still dominant in the hands of three major vendors that Petrolimex, PV Oil, and Petroleum military Need

GRiGGs “Building business strategy of PV Oil Vung Ang period 2010 — 2020”

to use petrol in Vietnam increased between 10-12% annually, turnover and profits

of suppliers also increases with the number of equivalents Although the barriers to join the industry, barriers to withdraw is high, pressure from customers is not significant but there are many businesses are prepared to join the market Environment of the petroleum industry has a great influence on the construction of strategic petroleum business So be mentioned and studied seriously in the construction business strategy petrol

4 Internal analysis

4.1 The implementation of business plans produced in 2009 by PetroVietnam Oil Corporation (PV Oil)

Revenue in 2009 by PV Oil Corporation reached 41,200 billion VND, 125%

of the plan, the State budget 4700 billion, plans to reach 102%, pre-tax profit

reached 350 billion, reaching 120% of plan

Production in 2009 was 15.5 million tonnes with export turnover of 7.5 billion Promote business development crude oil and petroleum products abroad in

2009 with production of 1.7 million tons to reach 157% of the plan, than 1.4 times

compared to 2008; complete tasks provide oil consumed raw and whole petroleum products Dung Quat oil refinery plant in the period running to try and handle well the situation arising from plant problem Business gasoline imported under the quota granted by the Ministry of Industry and Commerce Production in 2009 was 3.2 million m3/tan reached 104% of the plan, than 1.4 times compared with 2008

In addition, PV Oil Corporation focuses on development work processing petroleum products, oil layer, focusing expansion and upgrade Condensate Processing Plant to produce all kinds of high quality gasoline Production output in

2009 was 690,000 m3 of petroleum production from condensate Bach Ho, Rong

Doi and Nam Con Son, reaching 153% of the plan Ensure implementation of investment projects completed on schedule as the project Cu Lao Cao (150.000m3), total storage Dinh Vu Hai Phong (75.000m3), storage Tay Ninh (8.000m3) Quarter