G1 00269 BUSINESS STRATEGY CONSTRUCTION FOR NGHE AN TOURISM JOINT STOCK COMPANY WITHIN THE PERIOD OF 2011-2015 XÂY DỰNG CHIẾN LƯỢC KINH DOANH CHO CÔNG TY CỔ PHẦN DU LỊCH NGHỆ AN GIAI ĐOẠN 2011-2015

G1 00269 BUSINESS STRATEGY CONSTRUCTION FOR NGHE AN TOURISM JOINT STOCK COMPANY WITHIN THE PERIOD OF 2011-2015 XÂY DỰNG CHIẾN LƯỢC KINH DOANH CHO CÔNG TY CỔ PHẦN DU LỊCH NGHỆ AN GIAI ĐOẠN 2011-2015

CỘNG HOÀ XÃ HỘI CHỦ NGHĨA VIỆT NAM

Độc Lập - Tự Do - Hạnh Phúc

Kính gửi: TRUNG TÂM ETC - ĐẠI HỌC QUỐC GIA HÀ NỘI

Công ty CP Du lịch Nghệ An xác nhận: Trong thời gian thực hiện làm

đề tài tại Công ty, Nhóm l1 Lớp V 0110 đã được Công ty CP Du lịch Nghệ

An cung cấp các thông tin thực tế và số liệu chính xác về hoạt động của Công ty để cho Nhóm I Lớp V0I10 viết đề tài:

“ Chiến lược phát triển Công ty CP Du lịch Nghệ An

\.\ bu Lick

Ñ ` NGHỆ AN

BUSINESS STRATEGY CONSTRUCTION FOR NGHE AN TOURISM

JOINT STOCK COMPANY WITHIN THE PERIOD OF 2011 — 2015

Group 1 — Class: Gamba-V0110

Group members:

Nguyen Dire Hién — Group leader

Nguyễn Đình Thiện — Group member

Võ Văn Ngọc — Group member

1.1.2 Classification of business strategy

Business strategy has the important role in the existence and development

of enterprise; the role of business strategy is shown by the following aspects:

- Business strategy has helped enterprise to realize orientation in the future which ts the operational guideline for all activities of the enterprise

- Business strategy will help the enterprise to grasp and make use of business opportunities at the same time have active method to cope with threats and risks within business environment

- Business strategy pays important role to orient long term activitie of the enterprise which is the firm basis for implementing operational activities The lack of strategy or unclear strategy without firm basis will make the activities of enterprise lose orientation; there are many short term problems without Jong term targets which cannot show the general role in activities of enterprise

- Business strategy will raise operational effect of resources, increase competitive position of enterprise to ensure sustainable development for the enterprise

- Business strategy can create firm basis for enterprise to create suitable decisions with the change of market; it will create firm basis for study and implementation activities, invest in development and training, personnel nurture, expand market and develop products In fact, most of mistakes in investment, technology, market are onginated from constructing strategy or mistakes in defining strategic targets The success or failure of enterprise will depend on important factor which is business strategy

* Business strategy classification according to strategic level

When classifying strategy according to strategic level we will divide as follows:

- Company level strategy (or general strategy): is constructed for the whole company in all terms that the company joins in

- Business level strategy (sector): is constructed for a narrow business sector

- Functional strategy: this is the strategy of each private function in company such as finance, personnel, marketing then we can consider functional strategy as supporting strategy for business level strategy and company level

- Technological and technical strategy

* Business strategy classification according to strategic process

According to this classification business strategy includes:

- Orientation strategy

- Action strategy

1.2 Business strategy construction process

].2.1 External environmental analysis:

The purpose of external environmental analysis is to realize opportunities

and threats from external environment External environment includes macro

environment (general environment) and sector environment (competitive environment)

e Macro environment

Macro environment can have much influences on many sectors, enterprises and indirectly impact on the enterprise; macro environmental analysis will show that enterprise is coping with which problems? what is the opportunity and threat for business activities of the enterprise in the future To analyze, evaluate the influence of external environment on the enterprise, using PEST theory including evaluation of political and legal factors (P), Economic (E), Social (S) and technology (T) to find out

opportunities and threats for enterprises in the activities of business environment

Stable politics, labor law,

tax policy, legal system and legal environment

(Social)

Population Allocation of national income

Living style Culture, people’s qualification

Customs, tradition

(Technological)

Discover new technology

Rate of technological transfer

Governmental cost for R&D

Market of technological products

Political and legal factors:

Enterprise is the cell of economy, all decisions of the enterprise will bear strong influence of political and legal environment; political and legal environmental analysis is an indispensable activity to construct business strategy

of the enterprise Political environment includes State and law as well as management activities of the State It includes system of State’s policies and viewpoints, current legal system, political trends, Governmental diplomacy as well as political happenings in the nation, region and the world

- Economic factor:

It is the factor to impact on the enterprise which is the factor to operate the most constantly which is difficult to predict in macro factors; its operation bears opportunities and threats for enterprise; economic factor tends to operate as follows:

e The trend of GDP: can impact on growth rate of the economy, on the growth rate of population’s income which can change demand of consumders, market scale, impact on supply and demand of products

e Economic policies show the Governmental viewpoint in sector development

e Inflate rate can impact on prediction capacity of investors

e Interest rate is the factor to impact on the trend of consumption saving and

investment which can increase or decrease consumption, stimulate or limit

production expansion

e Payment scale, exchange rate impact on market and economic relation of

the enterprise

- Social and cultural factors:

Social cultural environment can be understood as the following factors:

language, value and attitude, behaviors, customs and traditions, material factors,

aesthetic, education, factors of population scale, age, gender, race and professional skill

The change of social and cultural factor is the result of long term impact of other macro factors then it can happen more slowly than other factors However

of function and outstanding quality in a short time but such changes can make existing products be outdated Then technological changes will include creation and damage to bring opportunities and threats

- Besides, in the condition of global economy it requires enterprises to study related factors of natural environment and global environment:

In the background of exhausted natural resources, environmental pollution,

ecological balance loss business strategy of enterprises must meet the following requirements: sustainable development, make use of natural resources effectively; promote study and development of technology to create clean products to protect environment, reduce impacts from production activities of the enterprise

In the condition of global economic integration it requires to have global environmental study

1.2.2 Analysis of macro environment

Analysis of enterprise can discover strengthes and weaknesses of enterprise to build up target system and suitable strategies to make maximum use of strengths and turn them into special capacity as well as limit weaknesses;

The purpose of internal environmental analysis is to realize potential resources to create competitive advantage for the enterprise; we can also realize barriers in maintaining competitive advantage; activities of an enterprise will

include activities of financial administration, personnel, business production,

marketing study and it must have a system of information, management,

functional divisions in each operationa sector Each enterprise has its own strengths and weakneses; define strengths and weaknesses to help the enterprise

to construct and select suitable business strategy

To analyze sector’s environment then we can use five-force model

of Michael Porter Such model has mentioned 5 forces to bring opportunities or threatens ina sector including (1) providers, (2) current competitive opponents, (3) potential competitive opponents , (4) customers, (5) replaced products One

of five forces can bear influence from other factors which must be studied to create a full picture of sector’s competition Mutual impact among 5 forces can create opportunities and threatens for enterprises within the sector which is shown in the following diagram

Newly participated

reatens of newly participated person

A

Replaced threatens

Replaced products

can lead to profit reduction threatening to enterprises; factors to decide

competitive level of a sector can include sector’s growth rate quantity of enterprises and their relative scale, the height of sector’s barriers, different products among enterprises

Threatens of newly participated members:

Such threatens are defined by “the height of participation’s barriers”; if participation’s barriers are high then the power to threaten from potential opponents can reduce and more opportunities will be given to enterprises;

Decisive factors of participation’s barriers including economic scale, difference

of products and faithfulness with label, distribution channels, absolutely advantageous cost

Power of buyers (customers):

In the correlation between enterprises and customers, if customers are

“weak” then enterprises can increase price to increase profit; on the contrary,

customers can be “stronger” than enterprise

Power of providers:

Providers have capacity to require price increase or reduction of product quality which is stronger than enterprise; providers can be stronger in cases when providers do not have many replaced product within market of industrial commodity which forces enterprises to choose them; when trading sector of enterprise is not important to providers; when providers have advantage in specializing products which make enterprises difficult to choose a replaced

provider; when providers can join in trading sector of enterprise to compete directly with enterprises

Threatens from replaced products

According to M Porter, replaced products are products of competitive opponents

in the trading sectors which can have the same function to meet the similar demand of consumption of customers Existence of products out of product boundary can increase common trend of customers to change into other alternatives such as: trend for buyers to replace; relative price of replaced products; realization level of different products, available products within the market

There are many methods to analyze internal environment of the enterprise including resource analysis method as follows:

- Human resource: people are the most valuable asset of enterprise; in case of good recruitment and maintenance of talented people then enterprise will have big advantages to win competitive opponents; human resource of enterprise can

be divided into three different levels: high ranking, intermediate level and low level; human resource evaluation is a general task including many factors such as evaluation of personnel management qualification, policy of labor attraction and re-training, evaluation of quantity, quality of labor force

- Financial resource: financial resource is one of indispensable factors in the

activities; when analyzing financial resource we can use financial tools,

evaluation norms such as payment capacity of enterprise, using effect of capital, profit coefficient

- Infrastructure and equipments: including projects of construction, store system, factory, machines, equipments, materials to serve management and production process of the enterprise

- Technology and technique: technology and technique is a system of knowledge, process and processing techniques of materials or services Techbological development includes related activities of research and

development of production process, improve machines, equipments management softwares, estimation controlling and informatic system; the enterprise wants to have competitiveness within the market then they must care for deserving investment on technological development activities

1.2.3 Business strategy formation and selection:

The target of business construction and strategy is to establish long term targets and replaced strategy to select some strategies to follow; strategy construction and selection is to define a series of activities that can help the enterprise to reach mission as well as given targets; based on current strategy of the enterprise, targets and mission, combination of external and internal environmental evaluation to evaluate and create supporting strategies

Enterprise cannot select each replaced strategy because it will take much time without high effect; then we must select a strategy collection which is the most optimal to develop it with detailed estimation of advantages, disadvantages, cost and profit to be created from such strategy; at the same time we must grasp application methods especially the using of models to select suitable business strategy such as strategic analysis on SWOT matrix, IE matrix analysis

1.3 Business strategy analysis

1.3.1 General matrix of factors in external environment

After analyzing opportunities and threatens arisen from external environment

we can use matrix to assess external factors evaluation (EFE matrix) to summarize and assess influences of such factors on enterprises; development process of a matrix of external factors including 5 steps:

* Step 1: make list of decisive factors for enterprise’ success

" Step 2: define importance from 0,0 (unimportant) to 1,0 (very important) for each factor Total classification level is 1,0 |

" Step 3: classify from 1 to 4 for each factor to see the method that how current strategies of enterprise reflect with such factors, out of which, 4

Opportunity and Importance classification Importance

The highest total importance point of an enterprise can be 4,0 and lowest is 1,0

Total importance point is 4 which shows that enterprise is reacting well with

current opportunities and threatens in environment In other words, strategies that enterprise use can be effective for current opportunities which can minimize

threatens and possible negative influence from external threatens Total

importance point is 1 which shows that strategies that enterprise has given cannot make use of opportunities or avoid external threatens

1.3.2 General matrix of factors in internal environment

Using matrix to assess internal factors to summarize analysis,

assessments of strengths and weaknesses of factors which impact on internal activities of enterprise; development process of matrix for internal factor evaluation is similar to EFE matrix which is just different in the third step: we can classify 1 as the biggest weakness, 2 as the smallest weakness, 3 as smallest strength and 4 as biggest strength

Table 1.2 general table of internal factors

8 Importance level | Classification | Importance level

Regardless of factors of IFE matrix, total importance point can be

classified as the lowest as 1,0 and the highest as 4,0 Total importance point is

lower than 2,5 which shows that enterprise is internally weak and higher than 2,5 which shows that enterprise is internally strong

1.5.3 General matrix of internal and external factors I.E

- JE (Internal — External Matrix) wil set different SBU (Stragety Business Unit ) of an enterprise into one place

+ If SBU is located in square of III,V,VIJ : should be hold and maintained + 1f SBU is located in square of VI, VIII,IX : should be gained or removed 1.5.4 SWOT matrix

Matrix for strengths — weaknesses, opportunities — threatens is the

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important tool to help administrators develop 4 kinds of strategies: strategies of strengths - opportunities (SO), strategies of strengths — weaknesse (SW), strategies of strengths — threatens (S7), and strategies of weaknesses —

threatens (WT) Combination of internal and external important factors is the most difficult task for development of SWOT matrix,

which predicts to have a good prediction and there will not be the best combination

* SO strategies have used internal strengths of company to make use of external opportunities; all of administrators expect their organizations to be in the position that internal strengths can be used to make use of external trend and events As usual, organizations will follow strategies of WO, ST and WT to make organization be in the position that they can apply SO strategies When a company has a bigger weakness then it will try to overcome to make it become strength When an organization must cope with important threatens then it will try to avoid it to focus on opportunities

* WO strategies are to improve internal weakness by making use of external opportunities; sometimes, external big opportunities are existing but company has internal weakness that can hinder it from exploiting such opportunities

* ST strategies can use company’s strengths to avoid or reduce influence of external threatens; this does not mean that a _ strong organization always cope with external threatens

* WT strategies are defense strategies to reduce internal weaknesses and avoid external threatens

To make SWOT matrix we must follow 8 steps:

1- List strengths and weaknesses of company

2- List weaknesses of the company

3- List big opportunities outside company

4- List important threatens outside company

S- Combine internal strengths with external opportunities and write

down results of SO strategies in suitable square

6- Combine internal weaknesses with external opportunities and

down results of WO strategies

7- Combine internal strengths with external threatens and write

down results of ST strategies

8- Combine internal weaknesses with external threatens and write

down results of WT strategies

Table 1.3 —-SWOT matrix

3 List strengths 3 Use strengths to make | 3 Use strengths to avoid

1 =

Good implementation and effective using of tools to analyze, build, select

and implement strategies are important steps for enterprise to have a right

business strategy; it can express logical, systematic and objective method in

defining future orientation of an enterprise which can lead enterprise to success

Then business strategy has important significance for the existence and

development of enterprise

CHAPTER I:

BUSINESS ENVIRONMENT ANALYSIS IN NGHE AN TOURISM JOINT

STOCK COMPANY NATOUR

2.1 General introduction of Nghe An tourism JSC (NATOUR)

2.1.1 General introduction

s* Introduction of the company:

The name of the company: Nghe An tourism JSC

English name: NGHE AN TOURISM JONT-STOCK COMPANY

Abbreviated name NATOUR

Main office: No.l3 — Quang Trung street - Vinh city — Nghe An province

Director: Mr Nguyễn Đức Hién

Total cadres: 205 members

Charter capital: 30.500.000.000 VND

“* Member units

° Bong Sen hotel

Address: No.39 — Quang Trung street— Vinh city — Nghe An province

° Muong Thanh hotel- Lam river

Address: No 13 — Quang Trung street — Vinh city - Nghe An province

° International tourism center no 1

Address: No 10 — Dao Tan street — Vinh city - Nghe An province

° International Golden Lotus tourism center

Address: No 14 — Quang Trung street — Vinh city - Nghe An province

Golden lotus tourism

2.1.2 Formation and development of NATOUR

Nghe An Tourism Joint Stock Company whose forerunner is Nghe Tin tourism company is a 100% state-owned enterprise which was established in

1984 with the main trading sectors of hotel, restaurant trading, tourism, tourist

transportation and commerce; The main office of the company is located in No.13 Quang Trung street — Vinh city — Nghe An province It is the first tourism trading unit in Nghe Tin province; after separating the province it has been changed into Nghe An tourism Company With the system of two hotels which are invested with the most modern scale at that time together with hundreds of experienced cadres and employees Nghe An Tourism Company has proved its own position as the leading bird of Tourism Sector within Central provinces under subsidized mechanism

Until 1994 after 10 years of construction and development, Nghe An has many breakthroughs to step into more active development period in all social- cultural sector, political and economic sector Vinh city has become second type urban center then the first ranked city of Nghe An province which is the social and cultural economic center of the region Nghe An province with many landscapes and attractive tourism centers such as: Cua Lo beach, Kim Lien tourism center — the hometown of Uncle Ho which is specially ranked, Pu Mat forest Nghe An has become an attractive destination for domestic and foreign

tourists and investors Tourism potential and opportunities are proved ; many

competitive opponents have appeared; however leading board of the company will not focus on the main business sector which is tourism sector but focus on trading which is not the advantage of the company; the company has borrowed big capital from the bank for import export trading but due to economic crisis then the trading gets loss together with the old business rule of subsidized mechanism then organizational machine is bulky and less effective the company

company

After a time of privatization, asset of the company has been degraded which cannot meet competitiveness within the market then in 7/2009, shareholders’ meeting of the company has decided to issue stocks to increase owner capital to 6

billion VND However, issuing stock, increasing charter capital will be allocated

to all shareholders then shareholders with the biggest capital reaching 20%, the company has many groups of shareholders but no group exceeds 50% total stocks then decision of shareholders’ meeting to increase charter capital, invest to upgrade, construct infrastructure, improve technology are not via the agreement

of shareholders’ meeting The company gets stuck with less trading effect, lower dividend than banking interest rate In the background, some small shareholders have sold some stocks to shareholders to occupy 20% total stock with five time higher and this shareholder has occupied 52% and a shareholder occupies 15% total stocks that two shareholders occupy is 67% then owner of the company has big changes

With new administrative thought it can promote all advantages to develop at the same time maintain jobs and income for cadres in the whole company, ensure planned dividend for shareholders; administration council has analyzed strengths, weaknesses, opportunities and threats to reconstruct organizational machine then quickly find out comprehensive development strategy

2.1.3 Vision, mission and core values of NATOUR

“+ Vision by 2015: to become a professional enterprise with prestige and leading quality in term of trading services of tourism — restaurant — hotel within the Central area

s* Mission

Provide customers with products and services of tourism — restaurant — hotel with distinctive culture of the land — people — nature of Nghe Tinh area; Slogan - NATOUR : "prestige is originated from quality"

Core value

With regard to the customer: polite and good service

1 With regard to the company., faithful and honest

With regard to colleague: honest and straight

with regard to themselves: professional, creative

with regard to society: friendly

s* Business philosophy

- Serve and respect deserving profit of customers

- Ready to cooperate and share with partner; compete with opponents

- Define human factor as the main factor to decide the development of the

company

- Construct corporate culture in business, appreciate professional morality

- harmonize, share profit among enterprise, labor and social community

- Come to the target to construct and develop a sustainable brand name

s* Logo and image of the company

CONG TY CP DU LICH NGHE AN TO CHUC BOAN DU L

MICE - BAO HIEM NHAN THO VIET NAM “HANH TRINH THEO THÂN BÁC"

ama 73 chircic

lairung tâm) be Hanh

: Add3+No,13 Quang Trung, Vinh City, Nghe An

=xIel: 84-38 844298

XŸ54.38 843635

The image of lotus in the ball with the pink lotus can show the beauty,

attraction toall customers to show a national vestige especially Lotus Village, the

hometown of Uncle Ho Under the Lotus there are 3 waves of sea which shows a wonderful natural resource which is Cua Lo beach it is the origin of the life and vitality

«+ Main trading sector

e Internal tourism services

e International tourism services

e Tourist transportation service

535

in the whole province then promote capacity of enterprises within the area Investment environment is improved; the activities of investment promotion have clear transfer in term of quantity and quality At the beginning of 9/2011 leader

of Nghe An province has organized meetings with local and external investors to appeal and have preferential treatments to attract investment especially for investors such as granting clean land for necessary projects, exemption of some tax for invested projects Organize meetings with 15 delegations of nations and foreign enterprises in Nghe An From the year of 2006 to 8/2011, there have been

332 projects with capital of 107.481 billion dong out of which there are 23 projects of FDI with total capital of 21.483 billion dong, 19 ODA projects with total capital of 180 million dollars to be issued with investment certificate and implemenyed; provincial policies and mechanisms have met demand of product exchange, product consumption at the same time well implement solutions to hinder inflate, gradually stabilize market; capital mobilization has developed rather well which can contribute to the construction of infrastructure and socio economic development; the task of master plan is cared to be approved for implementation by 2020 for sectors; general master plan of socio economic development of the province by 2020 has been approved by provincial people’s council to be submitted to ministries, central sectors and prime minister for approval

«+ Main programs and projects in 2010:

- Economic development program of the West Nghe An includes development

of material zone for processing industry and sub-industry; develop exploiting

tourism services based on potential and natural resources of Pu Mat, Pu Hoat, Pu

Huong national forest

- Sea economic development program especially Cua Lo beach tourism attached with sea and island tourism sector

- Development program of South East economic zone, Dong Hoi economic

zone

- Program to invest in infrastructure construction, tourism infrastructure

- Development program of industrial zone, industrial group, professiona village

- Development program of economic plan of street no.46 — Thanh Thuy border gate, Cua Lo deep seaport

- Development program of Vinh city to become the center of culture, economy and services within the Northern Central

- Human resource development for industrialization and modernization

Focus on attracting tourists from market out of the province as well as international tourists

Targets in the year 2011 are as follows: Nghe An just set up growth rate of GDP

of 11%; continue implementing targets of projects construction and development,

34

Besides, Nghe An provincial economy has developed which is the good condition for the province to invest in projects of traffic, tourism such as expending provincial roads, constructing big seaports such as Cua Lo, Nam Can border gate development; master plan traffic infrastructure for traveling; master plan, construct commercial area serving demands of tourists; upgrade cultural projects; organize cultural festivals of the locality Invested projects will make Nghe An become an attractive point for domestic and foreign tourists in the near future

Good conditions of economy will promote provided services of the company such

as hotel, restaurants services, tourism services (inbound,outbound)

2.2.2 Analysis of political and legal factors

* Politics of Viet Nam

In 2011, Viet Nam is expected to reach growth rate of 8% as a recognized

achievements; due to this success then Viet Nam can maintain stable innovation

in all sectors, regional development as well as international integration, strong

innovation of administrative procedures, remove all business barriers, improve

foreign investment environment policy to innovate, open together with political stability, safe living environment, securities those are basic reasons

leading to the increase of FDI capital and due to good international relation then

ODA capital in Viet Nam has increased

Mr.Philippe Delalande — French economic doctor, director of regional office in Asia — Pacific Ocean area in Ha Noi has said about the stable politics of Viet Nam: political stability is one of indispensable factors leading to peace and wealth If looking at some regional nations we can easily realize that, excluding Singapore, then since 1990 most of regional nations have been via political crisis

VE

Meanwhile.Vietnamese politics is also stable which can ensure a connection to implement a consistent economic policy | think that the success of Reform career in Viet Nam is also based on this stable politics"

Nghe An is a big province in the Central area with the largest area of the whole nation, with population of 3 million people, with stable politics, social securities, intelligent and friendly people Investment environment is cared by provincial leader to improve; machine and administrative procedures are improved to arrange tidily it is one of stable economic environment which will create good condition for investment development especially tourism development

In the background of constant wars and crisis, tourists will choose safe destination; political stability of Viet Nam in general ang Nghe An province in particular will be the good condition for tourism sector to operate and develop Law:

Vietnamese legal system has been improved, supplemented with international integration; institutions are also adjusted to be suitable to socio- economic development of Viet Nam and the world

The promulgation of Vietnamese tourism law in 2005 has met demand of institutionalizing policies of the State on developing tourism, promoting tourism to become a key economic sector we all as meet realistic development demand and integration process of Viet Nam; Vietnamese tourism sector has developed quickly

to attract the participation of many organizations, individuals and community; many types of tourism services have appeared; national and regional competition has been more violent; requirement of sustainable development, the problem of natural resource protection, tourism environment have become urgent Basic policies defined in article 6 of tourism law such as: the state has preferential treatments in term of land, finance, credit for organizations and individuals to invest in some

fields in tourism sector; the state will support tourism development focusing on

infrastructure investment, promotion and advertisement of nation, natural resource

AT

protection, tourism environment; allow establishing tourism development fund: define tourism resource, tourism environment, tourism planning: recognition and management of tourism, tourism route., tourism urban center, supplement trading tourism sectors will impact positively on the formation of tourism products of Viet Nam to ensure principle of sustainable tourism development

Socialization in tourism sector: the state encourages all organizations and individuals to invest in tourism sector, encourage community to join in tourism activities

In the part of tourism trading, there are regulations of tourism agency,

tourism contract, standardize tourism trading enterprises, define conditions for

tourism transportation medium to ensure service quality, raise professional quality for Vietnamese tourism

With diversified tourism potential, in recent years leader of Nghe An province has cared to invest and develop tourism with concrete policies, innovation and breakthrough in thinking, Nghe An provincial party’s committee

has promulgated Resolution No.12-NQ/TU on 30/7/ 2002 on developing Nghe

An provincial tourism sector within the period of 2002-2010 and currently Nghe

An provincial party’s committee has drafted Resolution of standing board of party's committee on developing Toruism of Nghe An within 2011-2020 Provincial People’s Committee has promulgated decisions on some policies to encourage tourism development such as good location, exemption of land leasing price, corporate income tax to attract domestic and foreign investors to construct hotels, tourism centers, high quality resorts, recreation park organize workshops on raising brand name and diversifying tourism products and services

of Nghe An province organize fam trip, Press Tour, for domestic and foreign tourism enterprises to survey, advertise Nghe An provincial tourism sector PPC has promulgated decisions on managing the exploitation and protection of tourism resources Tourism infrastructure has been developed and

V7

2.2.4 Social culture analysis

Nghe An is considered as a land of celebrity with long term historic and cultural tradition then this is one of the province with the biggest quantity of national historic vestiges (1000 historic vestiges out of which 150 vestiges have been ranked) Nghe An is located in the Central area with unfavorable climate and geographical conditions which has created Nghe An people to be hard- working, strong will, to overcome all difficuloties to go to success; Nghe An people has tried to create a plentiful mental life to give later generations lots of cultural values and the names of typical celebrities such as Uncle Ho, Phan Boi Chau, King Mai Hac De Nghe An is considered as a heroic land with many famous villages of literature All of such cultural traditions have become the eternal assets to be maintained and promoted

Nghe An has rather early history; some vestiges such as Vac village (Nghia Dan), Quy Chau, Sen village (Kim Lien - Nam Dan), quynh Doi (Quynh Luu), Dong Phai (Dien Chau) are famous for tradition of learning and literature; this

is the hometown of historic celebrities, revolutional herioins the life of production, struggling with natural calamity and enemy has made people bold as well as optimistic with national performance art; Nghe an has many famous vollages of culture and traditional professional villages

¬o

Nghe An is a land with many cultural vestiges of the human being such as Nghe An folk Song which are non-material cultural values to attract tourists; Nghe An also has 25 clubs of folk song to maintain and develop this cultural values There are also many famous villages along Lam river such as Hung Nguyen, Nam Dan many villages have festivals such as Hang Bua festival

(Quy Chau), Qua Son temple festival, Lotus village festival, King Mai festival,

Den Con festival, Vac village festival Cultural products of Nghe An is a big resource for Nghe An tourism sector to introduce to tourists

At the declaration ceremony of Nghe An tourism year in 2005 and commemorating of 975 years of the name of Nghe An province, former deputy prime minister, Mr Vu Khoan has addressed “in our nation, not few regions are considered as the land of celebrity however Nghe An is one of the leading Jand beside valuable cultural vestiges of Uncle Ho, Nghe An also has many other historic verstiges because in Nghe An there are always heroins and celebrities;w ith such outstanding, Nghe An must become the leading tourism destination

At the same time, with beautiful landscape, distinctive cultural projects, Nghe

An can also become an attractive destination of ecological tourism, rehabilitation”

2.2.5 Analysis of natural factor

Geographical location:

Nghe An belongs to tourism region of Northern Central area and sub-region

of the South of Nortehrn area including Nghe An province and Ha Tinh province,

in the common development strategy of the whole nation, Nghe An tourism is defined as one important tourism center to develop Central tourism; from Vinh city we can visit the hometown of Uncle Ho (13km), visit and enjoy ecological tourism in Pu Mat national forst (120km), go to Cua Lo beach (14km), visit Cuong temple (30km) From Nghe An we can also visit tourism destination in Ha Tinh province such as Nguyen Du verstige (Skm), Phong Nha cave (Quang

YA

Binh) From Nghe An tourists can visit Vientane of Laos with about more than

400 km with the nearest road from Viet Nam From Nghe An to the North with good route to visit Tam Coc- Bich Dong, Ha Long, Ha Noi typical tourism centers of ecology, cultural history with the national in anti-American resistance war, Truong Bon historic vestige

Nghe An has the coastline of 82 kim Due to tide, depth, terrain, Northern East Wind then this coastal area has full of fauna of Northern Bay and alluvium from Hong river, Ca river, Ma river, Cam river to create many foods for aquacultural animal to lieve Nghe An sea has difference of climate, water resource then seafood is diversified with high quality such as shrimp, cuttle- fish, fish island: 4km away from Cua Lo bbeach with Hon Ngu island, Hon Mat island .those are potential locations for island tourism development

* Features of terrain:

Nghe An is located in the East of Truong Son mountain with narrow terrain with the slope from the West to the East With total are of 16.487km, in which mountainous terrain occupies nearly 2/3 natural area with about 684.398ha forest (natural forest of 623.086ha ) occupying 41,5% natural area which can create many valuable tourism landscape

s* Climate conditions:

Climate is divided into two seasons which are the cold and hote season Average temperature in Nghe AN is high; temperature in the winter is lower than

summer; Nghe An is the province with high rainy outputs but bad climate with

Laos wind in the summer and North East wind in summer which is also a limitation to attract customers to Nghe An

2.2.6 Technological analysis

With the fast development of informatics technology and telecommunication it has changed human lieve which can make the world to be small, stimulate resources for learning, discovering natural worlds as well as global society an opportunity for tourism sector to develop strongly

It has been never easy like that to learn to know nations natural conditions and social conditions of the world One person loves to discover in the US can know and experiement tourism centers, distinctive culture of Nghe An via websites of Vietnamese tourism or via friends on facebook or even google earth making use of technological power is the strongest advertisement tool which is the least costly for tourism companies currently

According to the trend and prediction of experts, in the near future

technology of internet, email will be the main tools in transaction in all sectors as

well as in organizations and enterprises

Scarborough Research report on studying internet influence on the life of America has emphasized that tourism industry of the US has developed thanks to

Internet In 20005, about 87% American tourists have used internet to look for

information of tourism destination Out of which, 82% quantity of tourists look

for information who have decided to set tour via internet It means that more than

64 million American people have used internet to buy air ticket, book hotels, rent

car or set inclusive tour Analysts have proved that the burning of tourism via

internet will be increased in term of total revenue to 77 billion euro in 2011 to reach 133% in the coming years

Internet has helped tourism companies and hotels in Viet Nam and the world to connect easily with each other; this will be good condition for tourism points to

be programmed, reduce unpredictable risks for tourists .raise tourism service

quality; connection of information among enterprises can create new tourism

form for instance tourism sectr combines with industrial zone and professional villages to organize visting, learning to know culture, organizing production of distinctive products

Just like other sectors, informatics technology can create tourism enterprises an effective management tool of financial term, operational administration, personnel management, management decision to raise capacity

of customers’ services and reduce operational cost in the enterprise

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to policy, diplomacy, infrastructure, traffic, economy, commerce, security Viet Nam has full potentials of natural resource and humanity, stable political environment, security which are important factors to attract foreign tourists from Europe, Eastern Asia (Japan, Korea, Taiwan ) Then to form and develop the brand name of Vietnamese tourism there must be joint effort of the

whole sectors, elvels and the whole society in all phases; tourism sector will

focus on the main activities of advertising brand name of Vietnamese tourism

In recent time, national action plan of tourism has been implemented and

connected with national tourism promotion program, activities of domestic and foreign promotion; then the image of Vietnamese torusim has been formed and

come to tourists markets; topics and symbols have been used such as Viet Nam —

destination of the new millennium (2000); Viet Nam — the hidden charm (2006)

which have attracted and advertises a quantity of tourists coming to Viet Nam

Currently tourism agency of Viet Nam has been granted duty to organize exchange to create symbols and slogan for Vietnamese tourism sector within the period of 2011-2015, to attract customers in potential markets

Viet Nam has enough factors to develop tourism sector to become a key economic sector: with plentiful potentials Viet Nam is the impressive destination

of tourists

According to prediction of Viet Nam tourism agency, in 2015 Vietnamsese

tourism sector will attract 7-8 million international tourists; 32-35 million of

internal tourists; equivalent number in 2020 will be 11-12 million international tourists; 45-48 million internal customers Tourism revenue will reach 18-19 billion USD in 2020

Nghe An has hundreds of cultural and historic vestiges .then they will be valuable resources to develop Nghe An tourism sector currently Nghe An province

is preparing process, profile of Nghe An folk Songs to be considered as the world heritage then create a distinctive tourism product of Nghe An

Sector environment analysis according to five force model of Michael Porter:

Năng lực ———" & Tranh #¿ Nẵng lực |

thương | xi uf của các ¬ ! thương | ;

lượng của } oN, 3 lượng của

người cung xã Eshrrrmem ng ể PN ị ty hiện GONG tần bef oS ⁄ cà Ì \ ngươi g |

‘Seat rengesE OREO Rah URIS NSPS

Figure 2.2: five force model of Michael Porter

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2.3.2 Analysis of competitive intensity of opponents in the sector

Within the years of 2005 — 2010 Nghe An has developed fast and actively

in all terms; GDP growth rate has increased fast compared to previous period; invested projects in and out of the province, FD] in Nghe An have been increased; then it can promote tourism sector of Nghe An to develop Besides, Nghe An has applied many policies and regulations to exploit all potentials to attract tourists to come to Nghe An; many hotels and restaurants are constructed with small scale especially the system of accommodation such as 3-4 -5 star hotel and high quality resort Tourism companies outside the province have opened many branches and representative offices in Nghe An Currently Nghe An has

455 hotels and hostels with 10.392 bedrooms, 13.092 beds, out of which there are big scale hotels such as: Phuong Dong hotel — 4 stars; 180 rooms, Sai Gon — Kim Lien hotel equivalent to 4 star of 77 bedrooms; Bai Lu resort of 100 offices, 7 three-star hotels (Huu Nghi, Thuong Hai, Green hotel, Muong Thanh Vinh, Muong Thanh Youth, Green hotel, Cua Lo,) 750 bedrooms There are 24 enterprises of internal and international tourism within the province, big scale

hotels and tourism companies have operated more professionally with high

competition then competitive intensity is very strong and violent

QA

ght al tota | Eval Eval

total | Evalaut total Evala total total

au l autio autio point ion point ution point point

n nt

| Commercial advantage: centre

0,1 4 0,4 4 0,4 4 0,4 3 0,3 3 0,3 position in Vinh city, Cua Lo town

Bussiness network system in tourism

0,1 3 0,3 3 0,3 3 0,3 3 0,3 3 0,3 ceniter

Financial capacity: owner capital of

0,1 4 0,4 4 0,4 4 0,4 3 0,3 3 0,3

shareholders

Flexible price policy 0,05 | 4 | 02 3 0,15 2 01] 3 | 015 | 2 0,1

Prosfessional management capacity 0,05 | 3 0,15 2 0,1 4 0,2 2 0,1 2 0,1

| Technological factor: websie,

0,05 | 2 0,1 2 0,1 2 0,1 2 0,1 2 0,1

bomking, payment (Visa Card )

Braind name and prestige 0,1 3 0,3 3 0,3 2 0,2 2 0,2 2 0,2

Corporate culture 0,1 2 0,2 2 0,2 3 0,3 ] 0,1 1 0,1 Provfessional personnel 0,05 2 0,1 2 0,1 3 0,15 | 0,05 ] 0,05

Attraction of product and services o1 | 3 | 043 3 0,3 3 03 | 2 0,2 2 0,2

Modern equipment and

; 0,1 3 0,3 3 0,3 2 0,2 I 0,1 2 0,2 infrrastructure

Suiitable marketing strategy 01 | 3 | 03 2 0,2 3 | 03 | 2 02 | 2 | 02 |

According to above data, we can realize two competitive opponents in Nghe

An province which are Sai Gon — Kim Lie JSC and Phuong Dong petroleum

Tourism JSC

2.3.3 Threats from potential opponents

af

According to statistical data of Nghe An department of culture, sport and tourism, synthesis of data within the period of 2005 -2010, we have:

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