G1_00249 PHÁT TRIỂN CHIẾN LƯỢC KINH DOANH CHO CÔNG TY CỔ PHẦN TƯ VẤN XÂY DỰNG DTC GIAI ĐOẠN 2011-2015 DEVELOPING BUSINESS STRATEGIES FOR DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

G1_00249 PHÁT TRIỂN CHIẾN LƯỢC KINH DOANH CHO CÔNG TY CỔ PHẦN TƯ VẤN XÂY DỰNG DTC GIAI ĐOẠN 2011-2015 DEVELOPING BUSINESS STRATEGIES FOR DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

CONGTY CO PHAN TU VAN CONG HOA XA HOI CHU NGHIA VIET NA

<AY DUNG DTC Độc lập - Tự do - Hạnh phúc

Si: < S /DTC-GXN Quảng Bình, ngày 25 tháng 10 năm 2011

Kính gửi: Trung tâm Công nghệ đào tạo và

Hệ thống việc làm - Đại học Quốc gia Hà Nội

“hực hiện theo chương trình đào tạo Cao học Quản trị kinh doanh Quốc tế (GaMEA) do Trung tam Công nghệ đào tạo và Hệ thống việc làm- Đại học Quốc gia

Hà Nộ;phối hợp với Đại học Griggs- Hoa Kỳ tổ chức Vừa qua, các thành viên nhóm

3, lớp /0I10 học tại thành phố Vinh- tỉnh Nghệ An, gồm các đồng chí: Lê Anh Tuan, “ran Thanh Phong, Nguyễn Thế Vinh, Hoàng Ngọc Dũng đã đến làm việc và

nắm tìh hình hoạt động của Công ty chúng tôi; đồng thời lấy số liệu thực tế của

Công t’ chúng tôi để Xây dựng chiến lược kinh doanh của Công ty cổ phần tư vấn

xây dựụg DTC giai đoạn 201 1- 2015

Hiện nay, nhóm 9 đã hoàn thành và thông qua Ban lãnh đạo Công ty chúng tôi về điiến lược kinh doanh do nhóm thực hiện Chúng tôi xác nhận số liệu được

nêu tại bài tập lớn tốt nghiệp do nhóm 9 làm là số liệu đúng sự thật của cơ quan chúng ôi Chúng tôi đánh giá cao sự nổ lực của nhóm 9 đã tìm hiểu và xây dựng

chiến lrợc kinh doanh để Công ty theo đó thực hiện tốt hoạt động kinh doanh của

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT DEVELOPING BUSINESS STRATEGIES FOR DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011- 2015

Group 9 - Class Gamba01.V0110 Group members:

HA NOI 2011

University DEVELOPING BUSINESS STRATEGIES

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

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REFERENCES ooo a1 61

Figure 1.1 F.David’s Model of Strategic Management

| Figure 1.2 | Michael Porter’s Five Forces Model

Table 1.1 EFE Matrix

Tablel2 | IFE Matrix

Tablel3 | SWOT Matrix

| Figure 1.2 | The process of developing EFE and IFE matrices

Figure 2.1 The organizational Chart of DTC

‘Table 2.1 - ‘Competitive Profile Matrix

/ Table 2.2 | The external factor evaluation matrix of DTC

Table 2.3

| Table 2.4 Equipment and machines of DTC

Company’s financial effectiveness

Table 2.5 Completed construction projects over the past 3 years

Table 2.6 Currently implementing projects

"Table 2.7 The internal factor evaluation matrix of DTC

DEVELOPING BUSINESS STRATEGIES

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011- 2015

1 Reasons for selecting the research

The transition of our country’s economy to market mechanisms has made businesses polarize with increasingly fierce and more intense competition To survive and develop, the businesses need to define for themselves a sound strategy because if they have no strategy or wrong ones, they will surely fail

The activities of businesses in the market economy are investing and using resources to compete with rivals over the market demand The purpose of businesses in the market economy is achieving the highest efficiency for the long term period The performance of the businesses is the relatively compared results between the benefits derived from business activities and the resources mobilized for such benefits For businesses, creating a suitable strategy has special importance; the strategy direction and timely adjustment are the basis bringing huge benefits for the companies

In the context of market globalization, ever-changing technology, and increasingly fierce competition, strategy plays a more-than-ever critical role Together with the rising scarcity of resources, demand and consumer tastes always change, making the business environment become more complex and contain many risks To survive and thrive, every enterprise needs to build a strategy

Every organization needs to have plan and strategy is a special plan For businesses, strategic planning is the first function in the management system to achieve the organization’s goals

The strategic planning has to take into consideration many external and internal factors, logically analyses the information to set the basis for planning business activities in short and long terms, concentrates all the efforts and resources

UNIVERSITY DEVELOPING BUSINESS STRATEGIES

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is required to build itself an appropriate development strategy

Starting from the importance of building a business strategy and the needs of DTC Construction Consultancy J.S.C in strategic planning, we, Group 9 — Gamba01.V0110 Class, researched and chose the topic “Building strategy for DTC Construction Consultancy J.S.C”, with the desire to along with the company develop a proper strategy for the next period and the future as well

2 Research objectives

To streamline the learnt knowledge and apply it into the reality of the chosen business DTC Construction Consultancy J.S.C, then, analyze and build a development strategy with solutions applied into practice, leading to the efficiency for the company, contributing to the socio-economic development in the province specifically and the whole country in general

3 Research subject and scope

Applying the theories and methodology of the business strategy, the report shows the arguments to develop strategy for DIC Construction Consultancy J.S.C

- Research subject: the research goes in depth in analyzing, evaluating and providing strategy direction for the Company based on the general theories of building business strategy

- Research scope: Theoretical issues of business strategy, bases for developing business strategy, building strategy for the Company in short and long terms and specific solutions, measures to implement the strategy

: DEVELOPING BUSINESS STRATEGIES

OF DIC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

4 Research methodology

The study bases on the dialectical materialism philosophy and the learnt knowledge to evaluate the whole process of business activities of DTC Construction Consultancy J.S.C

Besides, the study uses methods such as: statistical, synthesis, analysis,

comparison, modeling, forecasting, to analyze, assess and make the Company’s Strategies

5 Structure of the capstone project:

In addition to the appendices, introduction, conclusion and list of references, this report includes three following chapters:

Chapter 1: Rationale foundation for developing business strategy

Chapter 2: Current business situations of DTC Construction Consultancy J.S.C Chapter 3: Proposed business strategies and implementation solutions for DTC Construction Consultancy J.S.C (period 2011-2015)

DEVELOPING BUSINESS STRATEGIES

OF DIC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

CHAPTER I RATIONALE FOUNDATION FOR DEVELOPING

BUSINESS STRATEGY 1.1 Business strategy concept

Strategy is an overall action plan to achieve specific objectives Referring to the strategy of an organization, people often think of how that organization define the objectives to reach, how to do it and what resources must be ensured

According to Fred R David in his book “Concept of strategic management”, Strategy is the means to achieve the long term objectives Business strategies can include the development in terms of geography, activity diversification, possession, and product development, market access, spending cuts, liquidation and joint

ventures

The strategy is also understood to be a set of goals and policies as well as the plans to achieve those goals It shows what business activities that the company is doing and will do, and which business field it will belong to

Besides, the business strategy or competitive strategy can also be defined:

- Product market: Company’s business opportunities depend on its products, markets it serves, the competitors that it can confront or avoid and its integration extent

- Investment level: Company should choose among many options: invest broadly or focused in the product markets, invest to maintain the current status, divest to withdraw or liquidate to dissolve the business

- Functional strategy: competition strategy can involve one or more following functions: product strategy, positioning strategy, pricing strategy, distribution Strategy, production strategy, information and technology strategy, segmentation Strategy, globalization strategy

- Strategic asset and capabilities: Strategic capabilities are the outstanding aspects of the company Strategic assets are the resource strength compared to others’ When building the strategy, the company should pay attention to costs as well as the

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OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

ability to build/ maintain assets and capabilities, creating the sustainable

competitive advantage of the business

- Resource allocation: financial and non-financial resources such as workshops, equipment, and human resource all have to be allocated Allocation decision is critical to the strategy

- Business synergy effect: only firms achieve the synergy effect can outperform the firms that ignore or not exploit this effect

Overall, strategy is a set of actions and decisions that are closely related to each other in order to help the organization reach the objectives It needs to be built in a way of making use of basic strengths, including resources and capabilities of the organization, as well as considering the opportunities and threats of the environment

Business strategy is considered as a principle in business Therefore, if companies want to succeed in the business, a prerequisite that they must have is strategy and a good implementation of it

1.2 The roles of business strategy:

As the market economy changes all the time, the companies wanting to survive and thrive have to adapt to those changes

- Planning role: Business strategy helps the company find the purpose and direction It shows to the managers which direction to determine and when the desired results are realized

- Forecasting role: in a changing environment, any chances and threats occur Strategy planning process helps the managers analyze the environment to make forecasts and come up with suitable strategies Therefore, the managers can better grasp the opportunities, taking advantage of them and reducing the risks associated with the environment

- Controlling role: Business strategy helps managers to use and allocate resources optimally as well as coordinate effectively functions in the organization to reach the common goals

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1.3 Strategy classification according to strategic level

When classifying the strategy according to the strategic levels, we normally have:

- Corporate level strategy (or general strategy): created for every business fields that the company is currently in The objective in this strategy is identifying the destination that the company wants to reach as a whole as well as the directions and measures to achieve that target

- Business level strategy (field): created for narrow and specialized business field In case that the company is only in one field, the business level strategy is also the corporate level one

1.4 Process of developing business strategy

Strategic Management Process is summarized by the following model:

i Reform external audit to Establish =|) Establish |

| identify Opportunities & long-tem specific | ‘ |

STRATEGY 1 STRATEGY STRATEGY

\ PORMULATION IMPLEMENTATIOH EVALUATION

Figure 1.1 F.David’s Model of Strategic Management 1.4.1 Business goals and missions

Mission is a statement with a long term nature of purpose which differentiates

a company from another Such claims can also be considered as a firm’s statement

of business philosophy, business rules, and the company’s belief All of those

DEVELOPING BUSINESS STRATEGIES

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identify the business areas of the company, specifically the core products and services, the target customers, market demand, technology, to the combination of these fields Mission is like the company’s publicly stated desired achievements, an image that the company wants to reach

The company’s mission needs to be deployed and outlined into clear goals Goal is the state, the specific result that the organization wants to achieve over a period of time

1.4.2 External environment analysis

1.4.2.1 Macro-environment (PEST model)

Analyzing the macro environment is to answer the question: what the enterprise is coping with? Four main factors of macro — environment that the

enterprise has to deal with: politics and laws, economic factors, social — cultural

elements, technology These factors affect the organization independently and combined

- Political and legal factors

The influence of political and legal factors is increasing on the operations of businesses Companies must comply with the regulations on institutions, policies, laws, remuneration, procedures

- Economic factors:

The economic factors have a direct impact on the potential attractiveness of various strategies These factors affecting the businesses can be: economic growth, inflation, business cycles, interest rate increase or decrease, stock prices, dollar

value trend, tax system and tax rate

- Social —cultural factors:

Culture and society mainly have impact on the businesses in the aspects of living standards, ethics, business community, women workers, changing consumer habits The social elements usually change slowly and difficult to realize but they

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1.4.2.2 Micro - environment (Industry environment) - M Porter’s 5 forces

In addition to the macro environmental factors, businesses are directly influenced

by the industrial environment in which they are operating

Five Forces Model

Bargaining

Power

of Suppliers

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The industrial environment consist of five main elements: the bargaining power

of suppliers, the bargaining power of buyers, the threat of new entrants, the threat of substitute products or services, the intensity of competitive rivalry, the threat of potential competitors

Suppliers:

Suppliers can claim their power and threaten producers by increasing prices, reducing the quantity and quality of products or services Companies should take into account all the negative impacts caused by their suppliers However, suppliers can only put the pressure on companies in some particular situations:

- There are few suppliers in the industry

- Lack of substitute products and services

- Suppliers have the advantage of product or service specialization

- Threat of forward integration of suppliers

Customers:

Customer is common noun to designate the person or organization purchasing the business’s products or services Customers can be divided into the following five groups: final consumers; intermediate distributors; wholesalers; retailers, industrial customers Customers are the main objects involving in the sales of products Identifying customers and their influences is necessary to create a basis for determining the market for products and services as well as investment structure Customer demand is the most basic element that the manufacturer consider when making decisions regarding whether or not to maintain long-term competitive advantages for a particular product The ability of customers to put pressure on companies may increase the risk of facing disadvantages for the companies The bargaining power of buyers is greater when:

- Customers purchase a significant proportion of outputs

- There are various suppliers providing standardized products Customers have

numerous choices

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- Customers threaten to integrate backward into the industry in order to control

a part of or the whole production process

When customers have advantages over producers, it is obvious that the producers have to reduce the price and increase the quality of products and services, leading to a decrease in gained profits

Substitutes:

Substitutes seem not to compete fiercely with the products or services of companies However, they can affect the profitability and become a threat to enterprises Substitutes that can be innovated and changed by technological advancements should be taken into consideration Most of new substitutes are the

result of the technological revolution To be successful in business, enterprises

should spend sufficient resources on strategic technology development

Existing competitors: Competitive rivalry of existing competitors within an industry is reflected in the industrial intensity, barriers to exit, fixed costs, added values, industrial situations and structure, differentiation betweens products, switching costs, brand identity, competitor diversification, strategic objectives For example, rivalry is more intense where there are many equally sized competitors Industries with high fixed costs encourage competitors to fill unused capacity by price cutting Industries where competitors can differentiate their products have less rivalry Moreover, when barriers to leaving an industry are high (e.g the cost of closing down factories) - then competitors tend to exhibit greater rivalry

Potential competitors:

According to Michael Potter, the potential competitors are businesses that have not appeared in the industry but may affect it in the future The threat of potential competitors depends on many factors such as: absolute cost advantages, the Government’s policies, the economies of scale, capital requirements, brand identity, customer switching costs, access to industry distribution channels, the likelihood of retaliation from existing industry players, monopoly products

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1.4.3 Analysis of internal business environment

The enterprise’s internal environment consists of all the things of the enterprise itself, directly related to production and business operations of the business to identify strengths and weaknesses of the enterprises that form the basis for strategic planning and implementation of business strategy Subjects to be considered are major factors occurring within the business, and under control of the business Key factors are: human resources, financial capability, marketing, information systems, and organization activities

1.4.4 Strategic analysis models

* External Factor Evaluation (EFE) Matrix

Table 1.1: EFE Matrix

List all the factors of | Assign a weight for| 1= The business’s | (4)=(2)x(3) the external business | each factor: the | response is poor

environment value of cach weight | 2= The business’s

should be between 0 | response is average and 1 The higher|3= The business’s the weight of al|response is above factor , the more | average

important the factor|4= The business’s

a weight with the value from 0.1 to 1.0 and a rating for each factor, strategic

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planners can identify and prioritize the external opportunities and threats affecting the business

* Internal Factor Evaluation (IFE) Matrix

Table 1.2: IFE Matrix

List all the factors | Assign a weight for 1= Major weakness (4)=(2)x(3)

of the internal each factor; the value | 2= Weakness

business of each weight 3= Strength

environment should be between 0 | 4= Major strength

and 1 The higher the weight of a factor , the more important

The process of developing EFE and IFE matrices includes 5 steps as follows: Figure 1.3: The process of developing EFE and IFE matrices

Create a Assign a Assign a Calculate Calculate

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* SWOT Matrix: is used by strategic planners to assess both internal and external aspects of a business The SWOT framework is a tool for auditing an organization and its environment in terms of strengths, weaknesses, opportunities and threats Combining those factors, companies can identify their appropriate

strategies

Table 1.3: SWOT Matrix

3 List all opportunities

3 List all threats

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- W/O combination: businesses take advantage of opportunities to overcome weaknesses

- W/T: businesses overcome or minimize weaknesses to avoid threats

* QSPM: The Quantitative Strategic Planning Matrix is a strategic tool which is used to evaluate alternative set of strategies The QSPM incorporate earlier stage details in an organize way to calculate the score of multiple strategies in order to find the best match strategy for the organization

The QSPM comes under the third stage of strategy formulation which is called

“The Decision Stage” and also the final stage of this process The best thing about QSPM is that it never insist the strategist to enter the information on assumptions, it extract the information from stage 1 The Input Stage and stage 2 the the matching stage The input stage is based on EFE Matrix, IFE Matrix and CPM and stage 2

made up of TOWS matrix, SPACE Matrix, BCG Matrix, IE Matrix, Grand Strategy

Matrix The QSPM combine the intuitive thinking of managers with the analytical process to decide the best strategy for the organization

Step 1

Make a list of the firm’s key external opportunities/threats and internal strengths/weaknesses in the left column of the QSPM This information should be taken directly from the EFE Matrix and IFE Matrix

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Step 4

Determine the Attractiveness Scores (AS) defined as numerical values that indicate the relative attractiveness of each strategy in a given set of alternatives Attractiveness Scores are determined by examining each key external or internal factor The range for Attractiveness Scores is | = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive

Step 5

Compute the Total Attractiveness Scores Total Attractiveness Scores are defined as the product of multiplying the weights (Step 2) by the Attractiveness Scores (Step 4) in each row The Total Attractiveness Scores indicate the relative attractiveness of each alternative strategy, considering only the impact of the adjacent external or internal critical success factor The higher the Total Attractiveness Score, the more attractive the strategic alternative (considering only the adjacent critical success factor)

Step 6

Compute the Sum Total Attractiveness Score Add Total Attractiveness Scores

in each strategy column of the QSPM The Sum Total Attractiveness Scores reveal which strategy is most attractive in each set of alternatives Higher scores indicate more attractive strategies, considering all the relevant external and internal factors that could affect the strategic decisions

1.5 Generic competitive strategies

According to Michael Porter, the advantages of any business always come from one of the two aspects: cost advantage and product differentiation By applying these advantages, businesses pursue 3 generic strategies: Cost leadership strategy; Product differentiation strategy; Focus or niche strategy

1.5.1 Cost leadership strategy

This strategy aims at becoming the lowest cost producer in the industry with acceptable quality standards By which, companies either sell products with the average price of the industry in order to gain higher profits than competitors or sell

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- Capability to design products appropriately in order to increase productivity For example, install a particular small part to reduce time spent on assembling

- High manufacturing level

- Effective distribution channels

Every generic strategy can contain potential risks and the cost leadership strategy is not an exception With the support from modern technology, competitors may have unexpected breakthrough in production, removing the competitive advantages of the cost-leading business In addition, some companies pursue a strategy focusing on niche markets where it is not difficult to achieve even lower costs compared with their traditional markets As a consequence, together they form a group controlling larger market share

1.5.2 Product differentiation strategy:

This is a strategy to develop differentiated goods and services satisfying the needs of customers through a sustainable competitive advantage Unique and special products and services will be higher appreciated by customers compared with those of competitors Added values from the product’s uniqueness allow companies to desensitize prices which are still accepted by customers It is hoped that higher prices will cover the additional costs in the process of providing products Moreover, due to the different characteristics of products, if suppliers increase their prices, companies can transfer this difference to customers, because customers can not easily find similar substitute products

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Businesses which are successful in applying this product differentiation strategy usually have the following strengths:

- Research capability and access to leading scientific advancements

- Skillful and creative research and development (R&D) team

- Proactive and professional sales force with the ability to communicate the strengths and uniqueness of the products to customers successfully

- The company’s brand and reputation for quality and innovation

There are some potential risks associated with the product differentiation strategy such as: the possibility that the company’s products are imitated by competitors, changes in customer predilection In addition, some companies that pursue the focus strategy may reach the higher level of product differentiation in their niche markets

1.5.3 Focus strategy:

If a company can afford neither a wide scope cost nor leadership, nor a wide scope differentiation strategy, focus strategy could be more suitable To implement this strategy, companies focus effort and resources on a narrow, defined segment of

a market by innovating products without changing other factors Competitive advantage is generated specifically for the focused market A focus strategy is often used by smaller firms A company could use either a cost focus or a differentiation focus

1.5.4 Selection of strategies

In order to select appropriate strategies, companies should identify the Strategy selection criteria which fulfill the following requirements: Based on the analysis and evaluation of external and internal environmental factors (QSPM matrix) and SWOT matrix, the selected strategies should be in accordance with not only the environmental conditions but also the company’s foreign affairs policy, the viewpoints and management methods of the Board of Management and Executive Team, and the company’s resources, financial and human resource capabilities

UNIVER STTy DEVELOPING BUSINESS STRATEGIES

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011- 2015

CHAPTER I CURRENT BUSINESS SITUATIONS

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY

2.1 Overview of the company

2.1.1 The process of establishment and development

DTC Construction Consultancy J.S.C was established under the business license number 0563000697 issued by the Department of Planning and Investment

of Quang Binh Province on March 15, 1996

Address: 81 Ngo Gia Tu Street, Dong Hoi city, Quang Binh province

Phone number: 0522240609

Working capital: VND 45.000.000.000 (forty five billion dongs)

Initially, DTC Construction Consultancy Joint Stock Company was a company specializing in the field of construction consultancy (design, project planning, and project supervision) Over a period of operations, the company has accumulated experience in construction business activities and especially capital The Company has invested in more machinery, equipment and personnel to expand the business field to civil construction, transport construction and irrigation construction The company’s development orientation in the period of 2011 - 2015 is maintaining consultancy activities, developing and expanding construction projects, in which primarily focus on transport and irrigation construction

* Vision: DTC Construction Consultancy J.S.C determined its strategic vision

to be an effective construction business in terms of both scale and profitability, which takes transport and irrigation construction as the main focus, creating the strong foundation for company’s development along with the development and urbanization of the area

* Mission: From the vision above, the company stated its mission as creating

constructions — projects carrying core values which contribute partly, as a strong

UNIVERSITY DEVELOPING BUSINESS STRATEGIES

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

- Until 2020, striving to become the key, leading unit in the Central Region

in the field of transport construction, irrigation construction etc, being competent enough to compete with other contractors in the area and in Vietnam, and then, gradually expanding to the world market

- Developing to be the specialized construction company with the synchronized technical level and international competitiveness, taking transport and irrigation, etc., constructions as core fields; enhancing the prestige and reputation, having the customers’ confidence

- Enhancing the national and regional competitiveness on the basis of actively responding to the customers’ demand

- Managing and operating effectively according to TCVN ISO 9001:2008, taking full advantages of a joint stock company, attracting the investment of

partners, investors, etc to develop the business

- Continuously improving the construction competence, becoming the main contractor in every complicated work

- Cooperating with domestic and foreign partners to enhance the strengths, participating in international works

2.1.2 Business activities, objectives and scopes

- Business activities:

Getting contracts to build industrial and civil constructions like: transport,

irrigation, schools, hospitals, civil houses, etc

UNIVERSITY DEVELOPING BUSINESS STRATEGIES

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011- 2015

- Business objectives:

DTC Construction Consultancy J.S.C mobilizes and uses resources effectively

in the business operation with a view to getting the optimal profit, creating jobs for many people, ensuring the dividends for the shareholders, contributing to the State’s budget and pushing the business activities to make the company thrive At the same time, the company also wants to ensure the harmony of interests among the State, enterprises, investors and employees

- Business scope

The scope of the company’s business activities is throughout the territory of the Socialist Republic of Vietnam as well as other countries under the laws

2.1.3 The company’s structure:

The company has a proper structure of functions, limiting the overlap, ensuring the coherence and cooperation among departments The total number of employees is currently 171 people With a large and qualified labor force, especially the engineering staffs with high qualifications and experiences in construction field, DTC Construction Consultancy J.S.C has advantages over the competitors, creating the strong faith of customers and investors Salaries are paid according to the positions and finished products with the increasing average salary compared to that

of other companies in Quang Binh province, thus, encouraging and motivating employees’ innovation and devotion

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OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

ADMINISTRATION EQUIPMENT MATERIAL CONSTRUCTION FINANCE AND

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2.2 Business environment analysis

2.2.1 Macro — environment (PEST model)

2.2.1.1 Influence of political.and legal factors

Currently, Vietnam is considered to be a nation with the stable politics, thus,

creating good conditions for the economic growth and attracting the foreign investments Besides, the Party and Government always care about the socioeconomic development, facilitating the growth of businesses, increasing the living standards

UOIVER SITY DEVELOPING BUSINESS STRATEGIES

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

In the industrialization and modernization process, Vietnam Government is paying serious attention to the advanced technology transfer, modernization of the industries Over the past time, the Government has executed many projects related

to infrastructure construction such as: consolidation of power, road, schools, stations, transport, irrigation constructions, etc

For the current time, the Government is encouraging the foreign investments into Vietnam, including the investments in the construction

Together with the national political stabilization, Quang Binh province has also had supportive policies, creating a clear legal framework, quickly processing issues related to administrative procedures for the enterprises which already and currently operate in Quang Binh

Thus, the current political and legal environment is very advantageous for DTC Construction Consultancy J.S.C as well as other companies in the area

2.2.1.2 Influence of economic factors

Overcoming the world economic crisis and downturn, top economic analysts

in Vietnam and in the world believed that Vietnam economy is having a huge development with a large investment flow and strong internal forces This is the important factor for all the companies and DTC specifically to have advantages enhancing their business

The growth of the economy leads to the large investments in infrastructure and industrial parks, facilitating the development of construction

However, other important factors like interest rate, exchange rate, inflation rate, etc were and are affecting badly the macro-environment Today, Vietnam is

one of the countries having high bank interest rates, inflation rate and unstable exchange rate They are the ones creating the difficulties for the enterprises, seriously affecting the business efficiency and constraining the whole development

of Vietnam economy

Unversity DEVELOPING BUSINESS STRATEGIES

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

2.2.1.3 Influence of cultural and socio — demographic factors

Although Culture and Society have slow effects, they do have influence on the administration and business actitivies of the companies The main market of the construction industry is the domestic one, thus, when the living standards are higher and improved, the demand for construction also increases Nowadays, our Government generally and Quang Binh province specifically are implementing and investing in many projects to develop the culture and society, including 30% of constructions

Currently, a significant part of labor in Quang Binh have moved to big cities like Hanoi, Ho Chi Minhetc Many of them, after their success have returned to their hometown, building works for general welfare, thus, the demand for construction increases dramatically

About the human resource, Vietnam is having a huge labor force, being the country with relatively high number of exported labor The proportion of labor in the working age is high, but they still have constraints in terms of skills and industrial mindset

For Quang Binh province, the main labor supply for the Company doesn’t have really good quality Besides, the high qualified people, after their study, stay in big cities for their careers, just a small part of them come back to hometown to work Therefore, developing a qualified human resouce is becoming a difficulty for DTC specifically and other enterprises generally

2.2.1.4 Influence of technological factor

The fast growth of technology has facilitated the transport construction industry with increasingly modern equipment This is the opportunity as well as the challenge for the companies concerning about the technology changes If they don’t want to be out-of-date, they have to continuously update the new technology to compete with other rivals Today, some equipments of the company were and are invested to improve the competitiveness

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Viaversine DEVELOPING BUSINESS STRATEGIES

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

2.2.1.5 Influence of geographical and natural conditions

Quang Binh is a province in the Northern Central Region coastal area, close to

Ha Tinh province in the North, close to Quang Tri province in the South, close to East Sea in the East and close to Lao People’s Democratic Republic in the West The province has a coast of 116.04 km in the East and the common border with Laos of 201.87 km in the West It has Hon La harbor, highway IA and Ho Chi Minh road, North - South railway, highway 12, provincial route 20 from the East to the

West, across Cha Lo international border-gate and some other ones, connecting to

Lao People’s Democratic Republic This is one of the advantages for DTC specifically and other companies in the province to expand the distribution network

to neighbor provinces and Laos

About the climate, Quang Binh is in the tropical zone and always affected by the Northern and Southern climate with 2 separate seasons:

Rainy season is from September to next March The average rainfall every year is 2000 — 2300 mm/ year The rains are mainly in September, October and November

Dry season is from April to August with the average temperature is 24°C - 25°C 3 months with the highest temperature are Jun, July and August

With the characteristics of 2 distinct seasons, the construction industry mainly operates in the dry season and can’t implement in the rainy season This is also a disadvantageous condition for continuous construction; thus, the company needs to have suitable arrangement to avoid the waste

2.2.2 Micro — environment (M Porter’s Five Forces)

Construction industry’s development prospect

In recent years, Vietnam has gained many significant achievements in economic development with the relatively high growth rate compared to that of other countries in the region and the world Those achievements are the results of Vietnam Government’s efforts in investing in infrastructure, improving legal

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UNIVERSITY DEVELOPING BUSINESS STRATEGIES

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

environment to attract investments Also, the Government has made suitable steps

in the policies and macro-economic strategy

With the starting point of a backward lagging, agricultural nation, having poor infrastructure and lacking modern technology, capital, Vietnam has a great demand for investments in infrastructure, industries, and urbanization With a proper Operation, the current proportion of industry and construction is 40% of GDP and expected to be 50% in 10 years

Until 2020, the transport system in our country basically will meet the various demand of the society with the increasing growth and quality, reasonable price, constraining and reducing the traffic accidents as well as the environment pollution Generally, we have created a suitable transport system, especially for main heavy products

Road network: the highway and provincial route system has to ensure the proper technical level, expands and builds new highways for heavy transportation The Asian Highways have to meet the technical requirements of regional road system

Regarding to growth of business values, the construction industry always reaches the rate of 20% for recent years Additionally, the GDP growth rate is expected to be 7.5% - 8% in the next 10 years With this goal, the construction industry in Vietnam can have advantages to achieve the high and sustainable growth

in the long run Moreover, Vietnam’s participation in WTO has also given the good conditions for businesses to integrate with the world, getting the new and modern technology especially for the construction field, increasing the competences and productiveness, indirectly pushing the development of construction industry and the whole Vietnam economy

For Quang Binh province in particular, although there have been many difficulties currently, the construction industry of the province has recorded significant achievements

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UNIVERSITY DEVELOPING BUSINESS STRATEGIES

OF DTC CONSTRUCTION CONSULTANCY JOINT STOCK COMPANY IN THE PERIOD OF 2011-2015

In terms of construction and urban infrastructure planning:

* Formulating and managing the general and detailed plans of the construction

of Dong Hoi city, 06 districts and 02 farming towns - Le Ninh and Viet Trung; 02

Industrial zones - Western North Dong Hoi and Hon La economic zone; 05 resorts -

Phong Nha - Ke Bang, Da Nhay, Vung Chua-Dao Yen and Bao Ninh - Nhat Le - Quang Phu, Bang mineral water area

- Total area of the formulated general construction plan: 25,000 ha

- Total area of the formulated detailed construction plan: 6,000 ha

* Constructing and putting into operation: 06 water plants and water supply system in Dong Hoi city and the towns such as Quy Dat, Dong Le, Ba Don, Quan Hau and Kien Giang; Ensuring regular water supplies for 45% of the urban population

* Urban infrastructure system has been built incrementally with the high speed

of urbanization 25% of urban roads have been asphalted and installed lighting Drainage system has operated 20% and trees have been planted in many urban roads

* 06 landfills in Dong Hoi city and other districts are under construction

In terms of project construction and human resource development:

* Has constructed and put into use more than 16,000 buildings in various economic sectors

* In 05 years (2001-2005), investment in construction of residential areas reached VND 1,700 billion

* Total number of employees in Construction Field is 20,025 Among them: 8,700 in production of construction materials; 137 engineers licensed in construction activities; labor force with university and college degrees have been trained with professional fields, meeting the requirements of development

* 355 enterprises operating in the construction industry in 2006 Of which:

- 49 private businesses

- 23 joint-stock enterprises