G1_00188 DEVELOPMENT BUSINEES STRATEGY FOR VIVACO STAGE: 2010-2020 CHIẾN LƯỢC PHÁT TRIỂN DOANH NGHIỆP CHO VIVACO GIAI ĐOẠN: 2010-2020

G1_00188 DEVELOPMENT BUSINEES STRATEGY FOR VIVACO STAGE: 2010-2020 CHIẾN LƯỢC PHÁT TRIỂN DOANH NGHIỆP CHO VIVACO GIAI ĐOẠN: 2010-2020 Global Advanced Master of Business Administration CAPSTONE PROJECT REPORT DEVELOPMENT BUSINEES STRATEGY FOR VIVACO STAGE : 2010 —- 2020 Group No

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Global Advanced Master of Business Administration

CAPSTONE PROJECT REPORT

DEVELOPMENT BUSINEES STRATEGY

FOR VIVACO

STAGE : 2010 —- 2020

Group No.6 :

1 Hoang Loc — Team Leader

2 Hoang Dinh Phuc

3 Dang Xuan Bao

4 Nguyen Chien Thang

5 Nguyen Thanh Thinh

HCMC MARCH-2011

CG Global Advanced \iaster of Business Administration

Chapter 1: THEORETICAL, BASIC sssssscssicvscassssossseovsvvsavsceonsesntesccsversscsvecsscnenetenseonweaves 4

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12 CLASSIFICATION OF BUSINESS STRATEGY .c<<s<<5< 5< es<sese 5

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1.3.2 Strategy formulation DFOC€SS .«<ss<<s<<ss<se 7

1.3.2.2 External environment evaluation “ ši33600420525G10144x132i44xcoxesk 8

1.3.6.3, Competitive profile matrix (CPM) ececesskieesieviesoteissaolxGstaykkoxV6S666054664930464ã4 13

1.3.6.5 Strategic position and action evaluation matrix- SPACCE «.s«s<ss«« 15

I.3.6.6 Boston consulting group matrix (BCG) .l6

I.3.6.7 Internal-External matrIX «<««<«<s 17

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1 3,6.10, Experiences t6 Choose BUSINESS Strategy’ sinssssssccssasssncsnsucnsccccsncsarseneenssiasainainnisce 20

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14 THE PROSPECT OF APPRAISAL SERVICES IN VIETNAM: 21

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CHAPTER 2: PERFORMANCE ANALYSIS FOR COMPANY .cesessesseeeeseeenees 22

21 FHE 1ARGET OF BUSINESS STRATEGY OF ViIVACO 22

:I R : À ua 22 21.2 Objective 1a .n 22

22 OVERVIEW ON THE VIVACO COMPANY ìnrerrree 22

22.1 Company Introduction_ ằŸằằnhhhhrrrrrrrrrrree 22

22.2 Foundation and development biography . -cèỉh 23

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22.4.3 Executive Board Company .::ccsscccssecccesssesstessessarsssnentecssesenansensseronnnesennes 27

72 5 Business RESUS .cciscscsecsiccsssivscousseseercnsrecmnmsnnnscencasacaxmxeanonencanennesomenseentenneess 30

23 ANALYST THE EXTERNAL ENVIRONMENT - 31

11.1 Poliieal Eàtord Ỹ cáaaeaaioareiereeaesdiaraonmvrarieensstommseasessslaSS1SRSGGIGRSIH 3l 23.2 Economic Factors (E) . - 55 nen Hư kh th 33 33.3 Social -cultural Factors(S} 002260 6á Ly c44 S4 44544 442v 16140602458 0À 39 2.3.4 Technological Factors (T) . - - - 5c SthnhhnhhhhthHhdrdertdririe 40 2.3.5 The trend of globalization . - - c5 snhhnhhrdrddrddrrrrrrrrire 4]

2.4 ANALYSIS OF THE SECTOR ENVIRONMENT - 42

2.4.1 Potential competitorS .- ( enrhrerrrrrrrrrrrrrrrrdie 43

2.4.2 The current CormipetitOT ‹ e c.cceSineeieerriiriieersesriAsi01A054 8600464462784 43 2.4.3 The power of client (the people using certificateS) -: 45 2.4.4 The pOWeF OŸ iSSU€TS . - 5: tt nnhhhhhhhhhhtrrdrrrrdtrdrrrrrrrrrrre 45 2.4.5 The threats from substitute products .ccc ce cee ceteeeeteteneeeereeeneeseeaeeneeenes 45 2.4.6 Internal environment of VIVACO TS Thee RNR OO 46 2.4.6.1 Number of services operated by VIVACO o cccccccceeeeee ete tteeeeteeeneeeseeeeneeeny 46

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246.2 Business performance of VIVACO XE E430 nnsnnnnasresssesnsssseonel s6 46

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CHAPTER 3: BUILDING BUSINESS STRATEGY FOR VIVACO TO THE

31 MATRICES OF STRATEGY SELECTIONS isissinc.ccccscsssscrasosemerennesenrenmvenenneanen 50

31.1 Matrix of external factor evaluation (EFE) -ceeeeree 50

312 Matrix of internal factor evaluation (IFE) S] 31.3 Competitive Profile Matrix (CPM) ¬ 51

31.3.1 Comparison between VIVACO’s operation costs and GDHiDEH(OFS se Ÿ—= 51 31.3.2 Competitive Profile Matrix - -48466/S603485383134859 06 C)EAIã0008148.40938axA a2 31.4 SWOT Matrix - scale \gÿ:ữnd1-i8E33t6 t4du0004631802164002M/400- 53

31.5 Space Matrix . -nhh =.== ae 56

3.1.6 Boston consulting øroup matrix (BC) - 57

3.1.7 Internal External matrix (I-E matrix) . - -+nhh 59

3.1.8 Grand Strategy Matrix c ccc ccc ceteetieneeeneeenenseeesneseeseeneesaeenegaeneenennanes 60 3.1.9 Quantitative Strategic Planning Matrix (QSPMI - 61

32 BUSINESS STRATEGY OF VIVACO TILL 2020 - 62 3.2.1 General strategy . - +2: cnhhhhhHhrhhrdrrdireirrrie 62

3.2.2 Functional strategy . - 2n tre 62

43 STRATEGIC SOLUTIONS wsscccssececccssccananissccppereeweracacencenmesenenneneanummmennamese neceyh) 63

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3.3.2 Marketing Management c:c ccc cece ceeeneneesersnectensenatnerseneenenecsanesesennases 64 3.3.3 Service Performance Management -: 65 3.3.4 Financial Management - . neces eseeseneeeesnesessessseesnessenenecesneneney 6S 3.3.5 Corporate Culture -2::22 nhi 66 3°36, Communications .cas«idseadsorsse an nsteswrccauseracnenaeresecemseorsanenemcmtennees 66

3.1.7 Risk Manasement cicccserrnnvisem T1 n1 11 11111211111 khe ne 67

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34.1, Limitation and existing problems sicissisisccsscsscscescccsscsvrnacimensmasarccenencontonenasts 67

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Internal-External miatrit (IE) sssaccustemnnuyernnssmesscncanmmammnnanns 18

Grand SITateBY HÀ «.cassessienuvennnsccnenenancstnscerssmmcememmnamnecmnnsoenmnmnen 19 The structure of organization and management: 25 VIVACO NETWORK seccisessisisavassccanauincnacenuasanommnenxonaencnsemusnermennvennnrennees 26

Analyst model OF PEST wiisiscsssscsssccccerveorenanerrecnemannernnrenenuenenermenrnsneantannein 31

Diagram of M Porter’s fve Íorces -c sen 43 VIVACO INFOCONTRO -2t2#tudqdỿ-¿Ÿè»ddesoo 49 SPACE Matrix for VIVACO 22h oan a2 ác A2ả22áả 6648688 57

Grand Strate6øy MBHTDX con ba na Hà 2h xá vá cá dã x6 g1 83980 100060 60

PICTURE INDEX

Prture 2.1: VIVACO LOgod 20.0 ccccccecceeceeeseeseeeeeeseeseeessesesseensecnaesaeerseeneenassasesesseeraeeneas 23

Bicture 2.2: Valuers LiCOnCe cnvecenerocconeeesoneeesonnscosssovd vosdssnsiacdawvensassaisetessvaanuesiesuvonsuanes 24 Dsture 2'3' Auctioneer’ s LICENCE c.cceccccssssrcsasrnsocsrinerasrervss cis cumnascccmmemamnemnrscercenenen 24

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UPpveRSITY

“ABLE INDEX

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"aBle 1.2: Iiferhal fetoF €vậlatOH Tiä4fTX ;:::.:ácecciooioieasenaeseiesaeroserseserniarennerdee 13

“able 1.3: Competitive Profile matriX .eee.eeeeeeee eee i4

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“0 089A 0 ốẽẽẽẽ 20

“able 2.1: The financial indicators from 2007 - 2010 of VIVACO cuống: 30

“able 2.2: Number of services operated . - dữat4biiGE.603208512808/010614401/214 46 Table 2.3: Business perÍOrinance ‹: :- -c22 2622622222421 010102 02 01446 46

Table 2.4: Usable cash [OWŠ .: :aicciccoabicbci tác ngã Ga G GA dĩ dị ga 40064054 0886400404800 00:31 0103388 47

Table 3 1: Matrix ưf external factor evaluation (EEE) ‹ ‹ eiieeeeesrrsee 50 Table 3:2* Matrix of rrernal factor evaluatipn (TE) so ceeoeeeeeeesrerirrrrmrsessersree 5]

Table 3.3: Table of operation Costs COMPAFISON .:-:cccceceteeeeseesteeteeeeeeseeseesenennes 52 Table 3.4: Competitive profile matrix .cccccccccces cece cteeseeseeseeeneeneeseneneesseeseeseeseenes 52 Table 3.5: SWOT maffiX n2 02100 U A east toon 4800.6030 0008 54 Table 3.6: Space matrix . - c0 nh 111 011 56 Table 3.7: rate of Total asset ValUCs sicccesisicseccissscccccrsssesccsinascccansercevomancevnemmmarosnaereneenen 57 Table 3.8* rate of sector from VIVACO ax siiccicscsissscsssincscerccoscscnarerevesratssennercenreeeomenennnns 58 Table 3.9: VIVACO growth rate .eoeeeeieererrrririiriiirieiiddei 58 Table 3.10: VIVACO sector positlon -ccccnhhhhrhrrrrrrrrrrrrdrrre 59

Table 3.11: Internal-external matrix (HE matriX) - nhe 59 Table 3.12: QSPM matrix c 22c22200022200222222022 Hà HẠ 02A 01144104 6l

Table 3.13: VIVACO Managers Training Schedule - 64 Table 3.14: VIVACO Proffesional Training Schedule - - - 64

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INTRODUCTION

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1 Research: Development business strategy from 2011 to 2020 for Vietnam In- spection Valuation Company (VIVACQO)

2 Research rationale:

Valuation activities have taken place for long time in the world, but for just about 10 years in Vietnam The price Ordinance was passed on April 26 2002 by Vietnam Con- gress with the objective of contributing to development of market economy socialist orentation, stabilization of prices and protection of the legal rights and interests of pro- duction or business organizations, individuals, consumers and the State’s interests

Valuation is necessary and important to identify value of an asset in conformity with the market conditions in a given place at a given point of time in accordance with Viet- namese Valuation standards or international approaches Basic requirements of valuation

are insuring objectiveness, science, under no impacts from the seller or buyer, inflecting

the right value in conformity with the market conditions Besides, it is necessary to set a uniform system of valuation with standards in conformity with law and toward interna- tional valuation standards

In the market economy, valuation is an important field contributing to a healthy, transparent and stable market Unfortunately, this field is still weak in our country For

recent years, in large cities such as Ho Chi Minh, Ha Noi, Hai Phong, Binh Duong, Dong

Nai Can Tho , which are big economic centers, many arising real estate transactions

leading to high demand for valuation, but there are a limited number of valuers who are

professionally competent and qualified to sign in valuation certificates The number of valuers meeting requirements for receiving valuer’s license is strange but true (about 380 licenses), and about 52 enterprises meeting legal requirements for operation including VIVACO In order to exist and develop in the future, it is necessary for VIVACO to

build a suitable business strategy based on its competitive advantages

From the above real requirement, with desire to build a suitable business strategy for VIVACO a topic for graduation assignment selected by our group is “Building devel-

a xe

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opment business strategy from 2011 to 2020 for Vietnam Inspection Valuation

CmparBIDRE DohfjfSsor Free Version

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Research Objectives:

Assessing development of the market economy, state policies on valuation service

business as well as competitive operational environment in Vietnam Then, compart-

son and assessment of VIVACO competitive capacity will be made to identify oppor-

tunities and threats

Surveying and assessing VIVACO’s real operation status and valuation services, internal sources in a comprehensive way Finally, VIVACO strengths and weaknesses will be identified

From opportunities, threats, strengths and weaknesses, building a business strategy

suitable for the company’s real status, designing solutions and an effective implementation rout for selected business strategy for stage from 2011 to 2020

VIVACO is also provided with a good reference in identifying core capacity that

creates competitive advantages, and quantifying factors which have been and will influence the company’s operations in the future, assisting the company’s leaders in orienting the development strategy

Scope of the research:

VIVACO operation services include: Survey, valuation, real estate transaction,

investment consultancy However, the research is only carried out within VIVACO’s valuation services based on comparision with other competitors

Research methodology:

Collecting and making statistics of primary data, building matrices for selecting strat- egies with expert method to identify weight of internal and external factors influen- cing the company’s business operations

Collecting secondary data in VIVACO and other direct competitive opponent

companies Besides, data and information is collected based on which released on mass media websites and information of valuation services issued by Price Control

Department — Ministry of Finance, General Department of Statistics, Ministry of

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Capstone Project.Group No.6

Results of comparisions, analysis are summarized and generalized with expert method trom BDWje€yerassessmEttees0etljb their accuracy is limited However, full remarks

from high ranking experts with real experience in valuation in Vietnam support the

group in building a good and suitable vaiuation service business stralegy

Significance of the research:

Significance of science: The research has significance of summarizing arguments

from various sources to build a business strategy which is the most basic, easily

understandable, easily done with efficient business results in the market economy Significance of reality: VIVACO is an independent valuation company Analysis, as-

sessment identification of the company’s strengths and weaknesses are carried out

within the research, then the company’s core capacity creating competitive advantag-

es has been identified, at the same time opportunities and threats are realized to sup- port the company’s leaders in orienting the company’s development strategy

Structure for the research:

The research includes part of introduction and 03 chapters Main contents of each chapter

are as follows:

INTRODUCTION

Chapter 1: THEORETICAL BASIC

Chapter 2: PERFORMANCE ANALYSIS FOR COMPANY

Chapter 3: BUILDING BUSINESS STRATEGY FOR VIVACO TO THE

YEAR 2020 CONCLUSION

-GRIGG: HIVE RSITY Capstone Project.Group No.6

Chapter 1: THEORETICAL BASIC

I! BAY EBEPIRDPION SP BOSINESS STRATEGY

[he concept “strategy comes from the Greek root word is Siralegos - is a milliary tem is the Greek historian Xenophon definition from the 6th century BC, in this time, Stn Tzu, a theorist of the Chinese military has also written "The Art of War" to discuss mlitary strategy, is used to plan arrayed and force distribution with the goal of defeating eremies Carl von Clausewitz - the tactics of the 19th century - has described the strategy

as "the war plan and plan of campaign combat The campaign will determine the partici- paion of each individual "More recently, historian Edward Mead Earle has described the

Stritegy as "the art and used to control the resources of a nation or a coalition of countries

ained at ensuring and increasing efficiency for the essential rights their own"

Today, business organizations also apply the concept of strategy is similar to the

miitary Strategy is planned and controlled use of organizational resources such as people, property and finance the purpose of improving and ensuring that its essential interests Kenneth Andrews who made the idea prominent in this classic book The Con- cept of Corporate Strategy According to him, strategy is what an Organization must be based on the strengths and weaknesses in the context of both opportunities and threats

The definition of strategic management is widely used and accepted by businesses: Strategic Management is the art and science of building, implementing and evaluating integrated decision for each organization to help organization can achieve its objectives

Although there have been many different approaches and definitions, a business

Strategy consists of the following contents:

e Identifying basic long-term objectives of company

e Establishing general action programs

e Choosing courses of action, deploying and allocating resources to achieve those objectives

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1.2 CLASSIFICATION OF BUSINESS STRATEGY

There are thn © QTARESIE RE pelt MEAs within a company depending on levels, ap-

preaches business strategy can be divided into two categories:

1.2.1 The strategic level

Leel standpoint, a minimum of three business level strategies:

e Corporate level strategy: Strategy towards the purpose and scope of the

In the globalized environment fierce competition, borders between countries have been

larzely removed, so it appeared more a strategic level 4, that's global strategy

Business strategies are related to successful competitive methods on specific markets

Business strategies include competitive methods chosen by organizations, ways to posi- tion itself on the market to gain competitive advantages and different positioning strate-

gies can be used in industrial circumstances

According to Michael E Porter, there are three general competitive strategies at business

1.3.1 Strategic management processes consist of three stages:

* Strategy formulation stage

® Strategy implementation stage

e Strategy evaluation stage

4 comprehensive strategic management model created by Fred R David, in which strat-

gy formulation stage includes: Identifying vision, mission, strategic objectives, analyz-

ng external factors to identify opportunities and threats, analyzing internal factors to rec-

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stritegies to implement Strategy implementation stage consists In allocating resources to

setup annual objectives and policies [he final stage is strategy measurement and evaiua- tion

Figure 1.1: Comprehensive strategic management model created by Fred R David

ternal audit objectives} -

(Source: strategic management model created by Fred R David)

Lidia: Strategy formulation process

According to Fred R David, strategy formulation process consists of three stages:

“igure | 2: Process of strategy formulation by Fred R David

Phase |: Input

External factor | Competitive profile ˆ matrIx

evaluation matrix | (CPM) Internal factor evaluation ma-

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SWOT PDFICompréssateb eR WeGIO Doston con- Internal- Grand stra-

and action evalu- | sulting group | external matrix | tegy matrix

ation matrix matrix (IE)

13.2.4 Vision and basic objectives

Ths is the first stage of strategic management process, mission and basic objectives of conpany provide a circumstance to build up strategies Mission presents reasons for the

exstence of company and points out what will company do Each company has a specific

msion

Basic objectives of company identify what company expects to meet in medium and long tern target to which the company will develop They are the first and the most important foundation to formulate business strategy Mission of company is a general concept, ob- jectives break it down into details

Objectives are built on the foundation of mission, external and internal factors of compa-

ny Objectives must be appropriate to objective and subjective conditions

13.2.2 External environment evaluation

Purposes of external environment evaluation are to develop a limited list of opportunities that will benefit to company and threats that company should avoid to mitigate negative impacts from external environment There are many different external environmental fac- tors (macro and micro), external environment evaluation just covers factors that have im- pacts On company

Macro environment including:

- Economic environment,

- Political and legal environment,

- Social and cultural environment,

- Demographic and geographical environment,

- Technological environment,

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- Global environment

Muro enPiBIN Mom preosopekitac Yards fonment or the so-called industrial environment, 1s

tihe environment affect directly to company, most of operational and competitive activi-

tiie: of company take place in this exvironment

Mchael E Porter, Professor of business strategy, Harvard University created Five-forces

mc(del illustrated:

Figure 1.3: Porter’s Five-Force model

Threat

of New Entrants ;

Competitors Buyers

+ Threat of

Substitute

Products or Services

Source: Five-forces model created by Professor Michael E Porter

1.3.2.3 Internal environment evaluation

In each company, there are always different strongs and weaknesses at business units In-

temal strongs and weaknesses in associate with external opportunities and threats, and

companion with mission statement are foundations to formulate objectives and strategies

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CJ3IGGS Capstone Project.Group No.6

Incuding all managerial activities in order to ensure operational performances in reality are correspOM Mg ioprepsslahows Sagan Ability of human resources management, pro- dudion management; quality management, materials management, financial, and sale

maiagement

M:rketing:

Marketing is described as a process of identification, forecast, establish and satisfy con-

suner`s demand to goods and services Marketing management include: Market devel-

opnent research; target market selection; distributional channels system; after-sale ser- VIC3S

Personnel:

Hunan resources play a critical role to corporate performance Despite a right strategy, It

car’t bring anything to company without effective workers Human resources include: human resoureces organizational structure, human resoureces quality, maintain and de- velopment policies

Operation management:

All the activities are to bring inputs to the company’s products and services Operations management process consists of production procedure design, technological production line selection, production scale, production position, area; product quality, services, man- ufectured prices

1.3.3 Business strategy formulation

Basing on corporate objectives; external environmental factors and internal circumstance,

to formulate business strategy with the following components:

e Identifying and selecting opportunities which could help company obtain business

objectives

e Selecting target markets

e Selecting goods and services for target markets

e Building and analyzing strategy matrix to choose appropriate strategies

e Building up marketing-mix strategy for selected goods and services market: Prod-

uct strategy, price strategy, distribution strategy, advertisement strategy

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1.3.4 Business strategy implementation

In crder tbÌJRrtcw/@RV€if€@dtiVEEE @Ef#WiMted business strategies company must have so-

lutiyns to operations management business management, human resources, finance to

cary out these strategies That is, organizing and allocating corporate resources to im-

plement sucessfully selected business strategies, 1.e.:

- Organizing an appropriate organizational structure

- Allocating properly, maintaining and develop human resources

- Allocating financial resources

- Building up operations management model scientifically and effectively

- Bulding corporate culture matching with selected strategies

- Building strategic communication system, PR ete

13:5 Assessment of business strategy

Evaluating whether a business strategy effective or not is very important A business

strategy is effective when that strategy fits to real circumstances of company and socio-

economic status around it and utilize as much as possible opportunities to obtain pro- posed objectives Business strategy evaluation include the following steps:

- Examining and testing effecitiveness and fitness of business strategies before put in

operation

- Evaluating operational and business performance of company period by period of strategy inplementation process in order to detect mistakes, disadvantages of strate-

gy and creating timely regulations, repairments and supplements

1.3.6 Tools and experiences to select business strategy

1.3.6.1 External factors evaluation matrix

Estabishing a Matrix assesing External factors will help us to summarise and quantify in-

fluences of external environment factors on businesses It affects manufacturing and

business operation of businesses including many factors such as opportunities and chal-

lenges

To build a Matrix, we manage to set a list containing all of the external factors affecting

operation of a business Assesing the importance level of each factor by scoring weights;

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sun of scoring weights of all factors equals 1 Classification reveals the corresponding

IMportangepie Hoye HeCkVGriK PUSIMEPSAHECESS

As:esing the importance level of each factor by classifying factors from I to 4: namely:

lev?! 4 means the company has the best reaction, level 3 1s above average, 2 Is average anc | is the least Those levels depend on the effects of business strategy

Th: next step is determining weighted score of each factor by multiplying the the weight

of ‘actor with the corresponding rating Then, add sum of weighted scores with each va- riable to determine the total weighted score for a business; the highest is 4.0 and the least

is |.0 and average 1s 2.5

Th: total weighted score is 4.0 revealling that the company is taking advantage of exter- nal opportunities and controlling very well or minimizing external threats to the compa-

ny

The total weighted score is 1.0 revealling that the company doesn’t seize the opportuni-

ties and minimize external threats

Tadle 1-1: External factor evaluation matrix

External factors | Weight Rating Weighted score

1.3.6.2 Internal factor evaluation matrix

Building internal factor Matrix will help us to summarize and asses the important strengths and weaknesses of function business department, it affects manufacturing and business operation of businesses

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To build a Matrix we manage to set a list including all of the external factors affecting OpơatIionRf R s$©swmErtterel-tfoternal business assessment part Assessing the

imrortance level of each factor by scoring weights; sum of scoring weights of all factors equals | Classification reveals the corresponding :mportance of those factors in business SUCZESS

Assessing the importance level of each factor by classifying factors from | to 4; namely: lev: 4 means the company has the best reaction; level 3 is above average, 2 is average anc | is the least Those levels depend on the effects of business strategy

The next step is determining weighted score for each factor by multiplying the weight of facor with the corresponding rating Then, add sum of weighted scores with each varia-

ble to determine the total weighted score for a business; the highest is 4 and the least ts | anc average 1s 2.5 point

The total weighted score is 4 revealing that the company is having strengths, and can

overcome weaknesses On the contrary, the total weighted score is | revealing that the

company doesn’t have strengths and has too many weaknesses to overcome

Table 1.2: Internal factor evaluation matrix

1.3.6.3 Competitive profile matrix (CPM)

Building competitive matrix help companies to identify rivals, pros and cons, which help companies to have appropriate business strategy

This matrix including all of the internal and external factors of businesses plays an im-

portant role in the business success In the competitive image matrix, the competitors also consider and calculate the weighted scores After that, we compare the total weighted

-

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scores of those companies with the prototype competitors Thereby, we will have a lot of

Infermati@DP Cid pesssersHtet Qsi-sion

Tatle | 3) Competitive Profile matrix

Rating | Weighted | Rating | Weighted Rating | Weighted

Table 1.4: SWOT matrix

STRONG (S) Promote internal strengths to take | Promote internal strengths to |

_ advantage of Opportunities avoid external Threats |

WEAK (W) Overcome internal Weaknesses to Overcome internal Weaknesses

take advantage of Opportunities to avoid external Threats

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SAOT may tJ\lg|t19,j»PBIBV4,kipf) of strates

Strength _ Opportunity Strategies (S_O) : Promote internal Strengths to take advan- tage of Opportunities

Weakness Opportunity Strategies (W_O): Overcome internal Weaknesses to take

13.6.5 Strategic position and action evaluation matrix- SPACE

SPACE matrix is a managerial tool used to analyze strategy It helps to identify which

stretegies company should carry out

Devending upon the of organization, numerius variables could make up each of the di-

measion represented on the axes of the SPACE matrix Factors that were included earlier

in the firm’s EFE and IFE matrix shall be considered in developing Matrix SPACE Steps

to develop a SPACE matrix:

Step 1: Choosing a group of variables represent for FS, CA, IS and ES

Step 2: Assessing from +1 to +6 for variables of FS IS and from -1 to -6 for variables of

ES CA, which are worst and best respectively Basing on FS and CA to make comparision with competitors, ES and IS to make comparision with other indus-

tries

Step 3: Take average score for FS,CA, IS and ES

Step 4: Plot these score into SPACE matrix

Step 5: Plus two average value on horizontal and plot this number on horizontal axis

Similarly for vertical axis With these two number, we have a new point on the matrix

Step 6 Connect original point to this new point we will have a vector, this vector present

the strategy of the evaluated company

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Figure 1.4: SPACE Matrix

Mirket development Vidt kel pencthalion

Product development +5 Market development

Related diversification +4 Product development

+3 Diversification (related or unrelated )

+2 +]

CA 1S

86G Ñ cá 3B 2 cÌ +] +2 +3 +4 +ŠS +6

Defensive 2 Competitive

Rerenchment “3 Backward, forward, horizontal integration

Divestiture -4 Market penetration

Ccnservative xš Market development

Liquidation 6 Product development

1.3.6.6 Boston consulting group matrix (BCG)

Boston consulting group matrix, or BCG model, is a tool to manage investment porfolio BCG matrix help an multipart organization control its business investment porfolio by

studying market share and industrial growth rate of each part compared to other parts

Relative market share is the ratio between market share of one part of the company in a

specific industry to the bigest market share in that industry

In figure, X axis present relative market share, Y axis present industrial growth rate, each circle is a specific part The extent of each circle is equivalent to revenue of each business

unit and the cluster inside each circle is the corresponding profit

Question Marks: Area I shows low market share and high level of competition Stars: Area II shows the best and long-term opportunities for organizational growth

and reputation

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Cash Cows: Area III shows high market share and low level of competition This

part nRRBIRCkesprtauwnd Bsdong asingssble

Dogs: Area IV shows relative low market share and low level of competition or no

market They are dogs in investment portolio of an organization

Figure 1.5: BCG Matrix

eae ĂẰ {GĂ cm aes eanonracaanaaea anew wean ecoeoe wow ewer ececoecece22eere2e2ee22°er?er°”rr~"~ ~_——_——_—— — ~

Relative market share portion

IE matrix analysis is to put every parts of company in the below figure:

IE matrix is built upon two main factors:

- Total weighted score of IFE

- Total weighted score of EFE

The value of the matrix:

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Figure 1.6: Internal-External matrix (IE)

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Total weighted score IFE

Grown and Build (area 1, Il, 1V): Appropriate strategies are concentrated growth

(access, develop new market, develop new product), integrated strategies

(forward, backward and horizontal integration)

Hold and maintain (area III, V, VII): Appropriate strategies are access new market

and develop new product

Harvest or devest (area VI, VIII, 1X): cut, liquidate and abolish ineffective units

1.3.6.8 Grand Strategy Matrix

Grand strategy matrix is used to set up feasible strategies All organizations and theirs

units can lie in four parts of the matrix This matrix bases on two assessment criteria: Competitive position and market growth rate Appropriate strategies for company are

listed according to their attractiveness

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Figure 1.7: Grand strategy matrix

PDF Compressor Free Version

Rapid market growth

Quadrant II Market development

Market penetration Product development

Horizontal integration

Devestiture Liquidation

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(Quadrant |!

Market development Market penetration Product development Forward Integration Backward Integration Horizonal Integration

e Retrenchment e Related Diversification

e Related Diversification e Unrelated Diversification

e Unrelated Diversification e Joint venture

e Horizontal Diversification

e Devestiture

e Liquidation

Weak market growth

1.3.6.9 Quantitative strategic planning matrix (QSPM)

QSPM is used to rank strategies to find the best strategies for company This matrix use all the information from: IFE, EFE, SWOT

To develop a QSPM, there are 6 steps:

Step 1: List strengths and weaknesses (at least 10 factors) and opportunities and

threats (at least 10 factors), these factors should be taken from IFE and EFE

Step 2: Assign Weight for these factors, as did in EFE and IFE matrix

Step 3: Identify a set of alternative strategies, organize them into specific groups

Step 4: Set attractive score (AS), quantify attractiveness of each alternative strategy

This score depends on the impacts that strategy have on the above internal and external factors We will set | is non attractive, 2 is low attractive, 3 1s fair at-

tractive, 4 is very attractive

Step 5: Count total attractive score (TAS) Plus weighted scores with equivalent AS

High TAS is high attractiveness of the strategy

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Economic, political, so-

cial, cultural, technolo-

gical

Total

QSPM has many advantages such as integrate internal and external factors into decision making process, strategies can be studied continously or simultaneously with no limita- tion on the number of strategy But it has also disadvantages: It requires intuition and ex-

periences

1.3.6.10 Experiences to choose business strategy

It is not simple to build up a strategy for a company because it depends on many factors

in past, present and future; furthermore, it also depends on sector, business fields There are some experiences in formulating a business strategy:

- Firstly, we need to have an appropriate process

- Business objectives must be suitable with company’s circumstance and exter- nal environment

- Collecting and analyzing information to find out strengths to enhance and

weaknesses to improve

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- Evaluating opportunites and threats on the market

Focis on PRAGetneptasts ve ErateBiepséfrceompany and ensure the unity between imple-

merting activities

Appraisal appeared in Vietnam's economy since the mechanism of transition from

cenrally planned to a market price mechanism for the State’s management, began to form in the years 1993-1994 and has grown In recent years

From a country with only 2 appraisal centers established for the requirements of

soc ety, namely: Appraisal Center and the Southern Center for Information and Appraisal

There have been about 52 appraisal business by the Ministry of Finance announced eligible Appraisal activities, there are 1,000 people working in the appraisal field and 216 who have Licenses issued by the Ministry of Finance

For over 10 years of operation, can be assessed as an overview: Appraisal has con- tributed significantly to the valuation of land, resources and assets as a basis for approval

by competent authorities approval of the purchase price of assets, institutions and indi- viduals make decisions concerning the management, ownership, sale, taxation, insurance,

mortgage and asset trading, shares of State enterprises, contribute to savings in invest-

ment spending, asset procurement, anti-waste, loss and negative in operating business As

reported by the enterprise valuation: The valuation of assets, procurement of goods from

the capital budget has helped save money for the state budget 10% - 15% of total ap- praisal value Moreover, appraisal also helps protect the lawful rights and interests of property owners, the investors and other stakeholders participating in the transaction To ensure that market operate more open, more transparent, overcoming the activities of the

underground market

Source: Quote statement of Mr Nguyen Tien Thoa - Price Control Department - Ministry

of Finance and Member of the Advisory Council of Financial - Monetary Policies

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>

CHAPTER 2: PERFORMANCE ANALYSIS FOR COMPANY

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THE TARGET OF BUSINESS STRATEGY OF VIVACO

to customer’s legitimate demands as negotiated and under the Valuation Standards

of Vietnam

Enhancement of human resource and capacity for VIVACO in order to achieve the international standard about valuation service and adapt the increasing require- ment of local as well as foreigner customers

The Financial objective Bringing an good business results, including:

Achieved a lower costs than competitor;

Expand the turnover from the investors and real estate business, maintain the an-

nual growth rate from 10% to 15% per year,

Increase the growth and profit up to 15% that compared to the last year,

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Vietnamese commercial name: Công ty Cô phần Giám định - Thâm định Việt

\aRDF Compressor Free Version

International Name: Vietnam Inspection - Valuation Joint Stock Company

Short name: VIVACO

Established in 2001

To be an A-class inspection - valuation organization

Activities independent, neutral and professional

Picture 2.1 — VIVACO Logo

2.2.2 Foundation and development biography:

Vietnam Inspection Valuation Joint Stock Company (VIVACQ) was established in July 17, 2001 and became the first company to be the Department of Planning and Investment of Ho Chi Minh City for permission to operate in the field Independent valuation by a Certificate of Business Registration No 4103000505 Currently operating under the certificate of business and tax registration stock companies number

0302349527 granted by the Department of Planning and Investment of Hochiminh City

on July 02, 2009

Business fields:

VIVACO provides customers with valuable and reliable services including all types of

inspection and valuation service in Vietnam for:

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Inspection of import-export goods (agricultural, forestry and fisheries, industrial

eo FoGnsumessgnods:emvelitieny and equipment - production lines, road and

waterway transport, special vehicles)

Quality control for construction works

Activities of surveyed insurance agents

Valuation of machinery, equipment and production lines and real estate

Activities of real estate transaction

Consultant of Investment and business management

Activities of auction

- Vocational training

<2 <2

ww Legal condition:

e Announcement of the Ministry of Finance No 48/TB-BTC on Jan 21, 2011:

Published a List price Valuers and Business valuation qualified valuation activities

e Valuer’s Licence - Ministry of Finance

e Auctioneer’s Licence -Ministry of Justice

BO TU PHAP CONG HOA XA HỘI CHỦ NGHÌA VIỆT NAM

jw tke re Chinh

Picture 2.2 - Valuer’s Licence Picture 2.3 - Auctioneer’s Licence

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2.2.4 Organizational structure and personnel

Orgdnjati6WAP&ffätfurE90oi006n"

=_ Shareholders

= Company Management Board

« Board of Directors: General Director and two Deputy General Director

« Unit: 04 branches and 02 representative offices

jf

Figure 2./: The structure of organization and management:

Deputy General Director Deputy General Director

sche tse cca se sccm mamaenmomencsgsneeeneransinept ta aaa ae aia

Business Board Survey Service Valuation & Real estate

- General Center Investment Transaction

consultancy & property

General &

Accouting Department

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2.2.4.1 Shareholders

Is an orgdnl)ltfoR'RV t8e9eolfis€tỏr8RlgRest authority of the company comply with the

Enterprise Law and the operation of charter companies

2.2.4.2 Company Management Board

Board has 03 members, the Board is the executing agency company, with full name of the company to decide all matters related to the purpose, benetits and operation of the company, except for matters under the jurisdiction The General Assembly of

shareholders without authorization Board is responsible for building the business plan, giving solutions, the decisions to achieve the goals by the General Meeting of

accountant and director of the center unit, branch and department operations

Deputy General Directors

The Deputy Directors who are the assistance to the Director General and are assigned / autlhorized to monitor, manage, operate a number of activities, specific tasks of the com- pamy

- Deputy General Director in charge of the business

- Deputy General Director in charge of operation

Br:anch/ Center’s Directors:

Directors who are assigned by the General Director directly managing, operating, as-

sign and supervise the work and all other activities of subordinate employees Imple-

mented seriously and reported regularly irregular reports upon request of the Directo-

rate

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Training, professional guidance for lower personnel

Survey ots PP RP? Sass: Free Version

All Surveyors/ Valuers/ Staffs operated under the direct management of the head of

division

Standardization of Surveyors/ Valuers/ staff provided in "Rights and duties" for each

respective positions approved by the Director General

- Imspection engineering design;

- Imspection quality control of construction works, factories, warehouses;

- Assessing the existing system of fire prevention in buildings, factories, warehouses,

Propose measures to improve the existing situation in order to avoid risks;

- Condition survey and damaged survey: means of transport, machinery and equipment, production lines and workshops;

- Activities of surveyed insurance agents; estimated amount of losses for insurance Purposes

- Training and advanced training of professional expertise involved

Vailuation and investment consultancy Center :

Valuation of machinery; vehicles, equipment and production lines

Valuation of real estate investment projects and enterprise value

Valuation for many purposes as required by different customers,

Management and investment consulting ;

Training and advanced training related to professional competence

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Real estate transaction and property auction:

Implehlllti0mwW §§3(UitleS°fiVRES#fAds of real estate transaction such as transaction

broker consultaney and propertv management

Implementation of real estate and property auction services

General Board of Business quality control:

Business:

- Organize Marketing

- Organization and management support units and departments in the handling of information relating to customers

The general quality control (General Director’s Assistant):

- Check the contents of records and documents before issuing deed documents -

inspection reports

- Organization management; monitoring; printing and filing inspection and valuation

- Organization control and maintain quality records management systems of company

Offfice — Human Resource Manager:

Office work:

- Manage and organize work related to administrative clerical, administrative

management, monitoring of emulation and commendation; receptionist

- To purchase equipment and items in service business for the company

- Follow-up and management asset of company

Personnel work:

- Personnel Management; wage labor, social insurance regime; labor insurance

- Manage and control storage of papers, legal documents of the company and employees

- To conduct periodic reviews of personnel and to advise the Board of Directors in the recruitment and assignment of personnel arrangement

Fimancial — Accounting Department:

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- Perform professional work in the company of financial accounting in compliance with accouRRDE fegniaftressơrf Hred MerefoN Ietnam

- Establish salaries for staff according to regulations

- Proposed management, control, inspection and monitoring activities related to

financial sector - accounting firms in accordance with the State

Information Department:

~ To build and manage the operation of electronic information (websites)

-~ Management technical network system

- Management and maintenance office equipments

2.2.5 Business Results

Vietnam Inspection - Valuation Joint Stock Company (VIVACO) is a first service com- pany for independent valuation in Vietnam after a two-center valuation of the Ministry of Finance (formerly the Government Pricing Committee) operating in the free market me- chanism of competition VIVACO has conducted appraisal on the property of the State should determine the value, the value of enterprises for equalizations, assessment of cus- tomer demand is the unit, organization or business individual customers with a total value

of property valuation determined a year about 10 thousand billion, contributing to the de- velopment of the country

Since its foundation, VIVACO’s business situation has been stable and grown From

200)7 to 2010 financial indicators of business activities were described as follows:

Table 2.1 The financial indicators from 2007 - 2010 of VIVACO

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Source: VIVACO

In ge#MH,(aarhuseBesy 3ituwaflarefdlie company to enSure there is minimal interest

with the profit rate on equity over |4%o/year Profit rate on stock reached 20)" 0; Profit rate

on turnover trom |0%o or more

2.3 ANALYST THE EXTERNAL ENVIRONMENT

Analyst the Macroscopic

ical Factors

omic Factors ultural Factors

nological Factors

Figure 2.3 — Analyst model of PEST

2.3.1 Political Factors (P)

Recently, Vietnam is a country with stable political; the legal system and administration

is improving, more convenient for the local and foreigner investors

Economic development policy has become part of business, the private sector was the

state attention The equalization of state-owned companies is also conducting serious and

tends the investment to abroad

Vietnam Inspection — Valuation Company (VIVACO) is acting under the Enterprise Law and other legal documents for inspection and appraisal however, the current legal sys- tem of Vietnam is lack of stability and consistency, and the guiding documents are un- completed lack of updated and overlapping The law applies to real life is still insuffi- cient, not high-performance, so will affect to the strategy of long-term development

The fact is the legal framework for the valuation industry in Vietnam just began building

in 1997 and gradually added and completed to date From 1997 to 2001 (before the Prices Ordinance was promulgated): Valuation activities in Vietnam are expressed through the

institutionalization of state management to the valuation services The valuation is mainly

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Government Pricing Committee in the North (Appraisal Center in Hanoi) and South

(Southern Information and Valuation Center in Ho Chi Minh City) serves mainly for the

procurement of property valuation from the state budget These two units were operated

as the form of revenue-generating units, take responsible for its operation

The important development period is marked from 2002 until now (after the Prices Or-

dinance was promulgated): On April 2002, the National Assembly Standing Committee

was issued the Price Ordinance No 40/2002/PL-UBTVQHI1O In the content, the Gov-

ernment has specified in details that the asset commodity items must through the valua- tion

After that time, a series of documents relating to the implementation circular of Price Or- dinance was gave birth to life The important marked for this development of legal framework was the issuance of Decree No 101/2005/ND-CP dated 03 August 2005 by the Government about Valuation This Decree was stipulated in details the principles and methods of valuation, asset valuation, business valuation This is the first complete normative legal about valuation best ever

Besjides, the Ministry of Finance was issued the Decision No 21/2003/QD-BTC dated 24 February 2004 regulate the approval, use and management the card of "valuation" Re- cently, the decision No 24/2005/QD-BTC was issued dated 18 April 2005 and Decision

No 77/2006/QD-BTC and Decision No 129/2008/QD-BTC was issued by Ministry of Finance regulate 12 valuation standards of Vietnam Overall, this is the first important legal framework, relatively complete and promote for the valuation service in Vietnam cam work under a unity framework and growing

In fact the real estate valuation service in the last time is still restricted In order to have

a legal basis and guarantee for the type of service, we need to launch and operate official-

ly a publicity and transparency in a uniform legal environment clearly, develop the real estate market At the article No 57, point | of the Real Estate Law in 2003 has confirmed that "the qualified organization, capacity and service activities shall be consulted about

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