Business strategies for Can Tho power company period 2013 – 2018

of Can Tho City existence and sustainable development in today's business environment, the Group decided to: Build business strategies for the Can Tho Power Company in period 2013-2018

CAPSTONE PROJECT REPORT

Index Page

Index 1

Introduction 6

1 The current economic context 6

2 The necessity to choose topic 7

3 Objectives and name of the topic 8

Chapter 1: Theoretical basis for building strategy 9

1/ Overview on strategy and strategic management 9

a Definition of strategy and strategic management 9

b.The strategic level of businesses 9

c Strategic management process 10

2/ Business strategy management process 10

Step 1: Identifying vision, mission and objectives of the business; 10

a Vision 10

b.Mission 11

c Objectives 14

Long-term objectives 14

- Short-term objectives 14

Step 2: Analyzing environment 14

1 Analyzing the external environment 14

a Macro environment 15

b Micro environment 16

2 Analyzing the internal environment 18

3 Use and collaboration tools to review and set forth business strategy:19 a External Factor Evaluation – EFE Matrix 19

b Internal Factor Evaluation – IFE Matrix 21

c SPACE Matrix 22

d SWOT Matrix 24

e QSPM Matrix 26

Chapter 2: Production-busiess analysis of the Cantho power Company 28

I/ Overview on the Can Tho Power Company (PCCT) 28

1/ The PCCT’s Formation and Development 28

2/ Business lines 31

a Main business lines 31

b Other business lines related to the main business lines 31

c Another business lines 31

3/ Organizational structure of the Can Tho Power Company 32

II/ Analysis of the business environment of the PCCT: 37

1/ External Environment 37

a/ Macro environment 37

a1 Economic environment 37

a2 Cultural, social, geographic and demographic environments 40

a3 Political, legal environments 41

a4.Technological environment 42

b/ Micro-environment 42

b1 Competitors 42

b2 Customers 42

b3 Suppliers 43

b4 Alternative products 43

b5 Barriers to entry

43

2/ The internal environment 44

a.Production activities 44

b Marketing 44

c.Finance and Accounting 44

d Human resources 45

e Research and development 47

f Information system 47

III/ Results of operations and business of PCCT in the years 48

1 Analysis the implementation of revenue 49

I.1 Revenue for electricity bussiness 50

I.2 Revenue for other business 50

2 Analysis the implementation of expenditures 53

IV/ Apply the tools for analysis and strategic choice for PCCT 55

a External factors environment – EFE for PCCT 55

b Internal factors environment – IFE for PCCT 55

c SWOT matrix for PCCT 57

e QSPM matrix for PCCT 64

V/ Summary of chapter 2 72

Chapter 3: Proposals and recommendations 73

I/ Development strategy of PCCT from now until 2018: 73

1/ Engagements 73

a Vision 73

b Mission 73

c Core values of PCCT 74

d Goals 75

e Commitments 75

2/ Build business strategy of PCCT 76

a According to the results of the SWOT analysis,we can propose 76

strategies as following

b Analysis of the proposed strategies 76

c Strategic choices by the QSPM matrix

78

II/ Some solutions to strategy implementation 79

1 Solutions to production activities 79

2 Solutions to Marketing activities 82

3 Solutions to human resources 84

4 Solutions to technology, research and development 86

5 Solutions to information system 87

6 Solutions to Financial and Accounting 88

III/ Organize the performance 92

1 Strategy implementation 92

2 Assess the implementation of strategy over the years 92

3 Compare performance with targets and adjust strategy 92

IV/ Recommendations 93

1. For the Government 93

2 For Southern Power Corporation 93

3 For the Power Company of Can Tho City 93

V/ Conclusion 94

Refrences 96

INTRODUCTION

1 The current economic context:

In this era, the rapid development of science and technology, information technology into a social life is so powerful and the global trade has made the competitive environment which is constantly change and increasingly fierce;

Businesses are dealing with the capital and human resources; caring for technology innovation, seeking the sources of raw materials; building appropriate strategy production, distribution, communication and trade promotion .to survive and develop;

Specifically, the context of the world and Vietnam economy is facing difficulties and challenges Vietnam's economic growth is low, production and business activities and market are facing many difficulties, having more inventories, the ability to access capital of companies is limited;

The majority of Vietnamese enterprises are small-scale and less capital, the majority of business owners and private enterprise directors have not been trained basically on business knowledge, management of socio-economic, culture, law, business administration skills especially business skills in the context of

international integration, to cope with the uncertainties in the global business environment;

Currently, the majority of our enterprises are using outdated technology compared to the world average of 2 to 3 generations, and most businesses have to import materials for production In recent years, many export products and high-growth product (footwear, textiles, food processing, beverages, steel and non-ferrous metal products, plastic products, electronic products, cars, motorcycles, etc.) are dependent on imported raw materials and semi-finished products from abroad, while the prices of raw materials in the world tend to increase, making the product group with proportion of the cost of raw materials is high, accounting for over 60%

of production costs; Especially when high inflation in the world, oil prices continued to reach new records made for businesses falling into a very difficult situation, forced to downsizing the production scale to be able to survive

Distribution strategy, communication strategy and trade promotion are limited Trade promotion activities are simple, sketchy and have no practical effect The new business focused on production of products that did not pay much attention

to the stages of creating added value, such as research and development (R & D), promotion and marketing (P & M) Most of the businesses are not properly aware

of the value and significance of trade promotion, advertising Therefore, investment of funds, manpower and other resources for advertising is very low, only less than 1% of overall sales (percentage of foreign enterprises accounted for about 10% to 20% of sales) Vietnamese businesses do not exploit the combination of traditional competitive method (competitive prices) with modern style competition with consultancy & services It also demonstrates the spread power of Vietnamese goods to each consumer is still very weak, especially consumers in rural, mountainous and remote areas Vietnamese goods are considered lost in its home

In the current conditions, besides the advantages the Can Tho Power Company has faced challenges in the general context, requiring the constant construction, consolidation and improvement of the company management system,

overcoming constraints to complete the task, plan and economic and technical targets

2 The necessity to choose topic

Along with the development of science and technology, particularly the development of information technology and communication, the process of international economic integration with rapid speed, competition among enterprises become more fierce, and diversified without borders, so the only constant is the change; business’s success or failure depends on the management of the change that

is good or not, want to be successful, businesses must constantly adapt from office work to the strategies, systems, products and culture to overcome these changes of environment and development come up with its power

The need for adapting to the changes that have led businesses to key issues in strategic management as: Are we trading in the right field or not? Should we reshape business operations? What new competitors are entering the industry? What strategies are we pursuing? How did our customer change ? Can these technologies which are being developed make us bankrupt?

From the above necessity, when considering the Can Tho Power Company (PCCT), our group found that the company does not have a specific strategy that only very general direction, the annual short term plan (this part will be stated in the introduction of the Company)

3 Objectives and name of the topic :

To exploit these opportunities, cope with challenges, turn these challenges into opportunities, exploit and promote the strengths and overcome the weaknesses

of the company, the power company must have specific strategies and be adjusted continuously through each period in accordance with objective reality and tend to the goals:

- Being efficiency in manufacturing and trading (increase revenue, price and reduce the cost)

- Improving the labor productivity;

- Making sure the stable, safe power supply

- Improving quality of service;

- Raising the income, ensuring the life for employees

Due to Electric Power Co of Can Tho City existence and sustainable

development in today's business environment, the Group decided to: Build business

strategies for the Can Tho Power Company in period 2013-2018

Can Tho Power Company is a governmental company, which manages, operates the electricity network (medium and low voltage below 22kV) and sell electricity to individual household

The company’s main business activities are to manage, operate and sell electricity In addition, the Company also has other extra activities such as repairing transformers, building electricity network, performing experiment relating to electricity for customers

In Vietnam, the government plays the monopoly role in power industry It is true in case of Can Tho Power Company and many other companies However, it’s not always the case and the exception is made at some provinces as An Giang, Tra Vinh, Binh Thuan, The power companies at these provinces still have to compete

to take market shares from the existing competitors as rural electricty institution established long time ago at the rural areas According to the rule of the power industry, the existence of these rural electricty institutions is legal They purchase electricity in large quantities with low price setting by the government from the governmental power company, then they invest to develop their own electricity network after the distribution substations and sell electricity to individual household with the same price as the governmental power company

These non-govenrmental rural electricty institutions have various types and compete rigorously with the governmental power company in rural area of the province For instance, An Giang Water-Power Company operates in most of the

districts of Tra Vinh province, many non-governmental companies operate in five districts of Binh Thuan province

Also according to the decision of the Prime Minister approving the master plan on national electricity development for 2011-2020 are to 2030 (Master Plan 7), after 2022, the State will form a competitive market in the electricity distribution sector An investor can invest in power plants, then signed a power purchase agreement with the individual consumer, by renting the transmission grid 220, 500kV of electricity Transmission Company and the distribution grid 110 , 22, 0.4

kV of Power Company in the form of payments costs for leasing grid

Thus, the building of business strategies for the electricity distribution sector

of the Power Company of Can Tho city is essential for the following reasons:

1 Helping the Company to build clear strategies to complete itself, enhance its strengths and minimize its weaknesses, try to take opportunites, overcome the threats and challenges to grow strongly in the future

2 Enlisting the opportunites to widen and take over market shares in preparation for joining into competitive market in power distribution sector after 2022

Hence, the main purpose of this assignment is to focus on buiding business

strategies for Can Tho Power Company in electricity distribution sector

CHAPTER 1

THEORETICAL BASIS FOR BUILDING STRATEGY

1/ Overview on strategy and strategic management:

a Definition of strategy and strategic management: there are many

definitions of strategy, our group selected the definition of strategy in view of

Michael Porter (Source: “What is the strategy” Havard Business review, 1996) as follows:

” Strategy is creating fit among a company's activities”;

It means that the competitiveness is gained from the operating system rather than its parts, and the compatibility between the operation occurs when the activities contribute to strengthening and enhancing the effectiveness of other activities in the chain value of the business

Strategic Management: According to Fred David: “ Strategic management

is , an art and science of formulating, implementing and evaluating cross functional

decisions that enable of an organization to achieve its objectives”

b The strategic level of businesses:

Strategy should be at the following levels in the enterprises:

Corporate straregy: The whole purpose and scope of the enterprise is built to

meet the expectations of stakeholders This is core level because it is strongly

influenced by the investors within the enterprise and acted to guide strategic decision-making throughout the enterprise Corporate strategy is usually evident in the company's mission statement

Strategic Business Unit -SBU: Strategic Business Unit -SBU (referred to as

business strategies) is related to how the company successfully competes on the specific market It relates to the strategic decisions about the selection of products to meet customer needs, gain an advantage over competitors, exploit or create new opportunities, etc

Functional strategy: How each division of businesses is organized to bring

the strategic direction to the corporate and business unit level Thus, the functional strategy focuses on issues of resources, processes, people, etc

c Strategic management process:

i Strategy formulation: it is the process of setting up business tasks, conducting survey to identify defective elements inside and outside, setting long-term goals and selecting alternative strategies;

ii Strategy implementation: This phase mobilizes administrators and staff to implement the strategy that has been set up, three main activities are to set up annual objectives, make policy and allocate resources, this phase is the most difficult phase in the strategic management process;

iii Strategy evaluation: Strategy evaluation is the final step of strategy management process The key strategy evaluation activities are: appraising internal and external factors that are the root of present strategies, measuring performance, and taking remedial / corrective actions

2/ Business strategy management process:

Step 1: Identifying vision, mission and objectives of the business;

a Vision:

Definition: Strategic vision is long-term orientations that managers set up the

future of the enterprise based on the forecasts of the volatility of the business environment; business vision is to answer the question: what do the Businesses

want to become? It is often the first step, presenting in a short statement to express the will of the managers;

Requirement: a vision is considered to be effective when it includes the

following features: Inspiration, clearness and liveliness, showing a better future;

Characteristics:

Vision is a picture, a vivid picture of what might happen in the future, cover the significance of an excellent standard, an ideal, a vision of a unique nature, it refers to creating something special and vision is a brief message and throughout business-oriented activities;

b Mission:

Definition: it is a statement of long-term value about the purpose; it helps

distinguish this company from other companies, such statement is also known as the business philosophy, business principles, and the beliefs of the company The

mission statement is a "reason for existence" of a company

Role of the mission:

According to King & Cleland Organization, Identifying proper mission plays

an important role in the success of a business as:

It guarantees an agreement on internal business purposes, it provides a basis

or standard for distribution of resources of the enterprise; It creates a common language and it is the center for people to agree with purpose and direction of the business; It facilitates to change the purpose of the business into appropriate goals, change objectives into strategies and measures for specific activities; It formed the basis for the choice of objectives and strategies of businesses; It creates and strengthens the image of enterprises to the public, makes it attractive to the stakeholders (customers, suppliers, banks, state )

The content of a mission statement:

According to Fred David, a mission statement consists of nine contents: Who will consume the company products? What are the company products/ services? What technologies does the company use? And the technology is the top concern of

the company, isn’t it? Concern for survival, growth, and profitability: “Is the company committed to growth and financial soundness? “What are the basic beliefs, values, aspirations, and ethical priorities of the company? What is the firm’s distinctive competence or major competitive advantage? Concern for public image:

“Is the company responsive to social, community, and environmental concerns? Concern for employees: “Are employees a valuable asset of the firm?”

c Objectives:

- Long-term objectives:

Long-term objectives can be defined as the result of determining that an organization seeks to achieve in pursuing task / mission The strategy indicates measures to achieve long-term goals Time frame for objectives and strategies should match each other, usually from two to five years

- Short-term objectives:

Short-term objectives are annual goals, specifically with quantitative targets

to know what problems we will focus on

Step 2: Analyzing environment:

1/ Analyzing the external environment:

External environment of the enterprise can be divided into two levels: the macro environment and micro environment

a Macro environment:

Macro environment includes the group of the economic, socio-cultural, demographic, natural, political-legal, technological factors

+ Economic Environment: Markets require purchasing power and humans

These important factors directly affect the strategy of enterprises such as gross domestic product, per capita income, integration policy, international economic integration;

+ Socio-cultural environment: views on quality of life, ethics, lifestyle, art,

customs, practices, traditions, the level of awareness, education in society, consumer trends;

+ Demographic environment: total population, the number of people of

working age, the rate of population growth, changes in population structure (age, gender, ethnicity, occupation, income, ), life expectancy, age structure, marriage, family structure, education, population movement between areas;

inputs and the operating environment for businesses, organizations, the factors need

to study: geographical location, natural conditions, climate, mineral resources, and reserves, energy resources, exploitation situation and use of natural resources, environmental issues and environmental pollution, the attention of governments and communities to the environment;

+ Political and legal environment: target of political institutions, political

stability, and prestige, ability to control of governments, international treaties, laws and legal system govern directly business operations of the organization

innovation speed and application of new technologies, incentives and funding of government for research and development (R & D), the pressure and the cost of developing new technology

b Micro environment:

Micro environment consists of the internal factors and the external factors for enterprises, which determine the nature and extent of competition in the industry Micro environment consists of five basic elements, which are the current competitors, potential competitors, customers, suppliers and substitute products The relationship between these factors is reflected in the following figure 2.1:

Figure 2.1: General diagram of the micro environment

+ Current competitors: the current competitors are competitors who currently hold market share in the market; they are main competitors who are competing with businesses and affecting the business level of enterprise Based on the analysis of competitors can form the competitive profile matrix

Bargaining power of

suppliers

Threats of new entrants

Threats of substitute products/ services

Table 2.1: Competitive Profile Matrix

and their particular strengths and weaknesses in relation to a sample firm's strategic position This matrix is an expansion of the External Factor Evaluation matrix (EFE) because it includes both internal and external factors of decisive importance

to the success of the enterprise Also, in the CPM, the competitors will also be considered and calculated the total weighted scores The total evaluated scores of these competitive enterprises are compared with researching enterprises The comparison provides enterprises with important strategic information

+ Potential competitors: potential competitors may be factors that reduce

the profits of companies because they put into operation of new production capacity, with the desire to gain market share and the necessary resources

+ Customers: an integral part of the enterprises Enterprises need to identify

current and future customers to have clear strategic direction Customer analysis based on various criteria such as geography, demography, income, customer psychology Another important issue related to customers is their bargaining power + Suppliers: suppliers include individuals or businesses that provide goods

or services and equipment; financial community; labor sources Similar to

customers, while suppliers have advantages, they can cause pressure and create disadvantages for businesses

+ Substitutes: pressure from substitute products limits the profit because of

price competition or the trend of using substitute products of the buyer Therefore, enterprises need to use resources and new technology into their product strategy

2/ Analyzing the internal environment:

Analyzing production activities:

This is the backbone stage to decide all other activities internally We need

to consider a number of key issues such as: the process of production, capacity, inventories, the use of human resources and product quality

Marketing factor:

Marketing can be described as a process of identifying, forecasting, setting and meeting the desired needs of the consumers for the product or service

Accounting and financial factors:

Financial condition is often seen as methods to evaluate the best competitive position of the company and it is attractive condition for investors To form effective strategies, we need to identify the strengths and weaknesses of the organization's finance Solvency, leverage, working capital, profits, use of capital, cash flow and equity capital of the company can make a strategy more viable Financial factors often change the current strategy and the implementation of the plan

Management factor:

This is a very important factor contributing to achieve the business objectives with the highest efficiency Management has five basic functions: planning, organizing, directing, staffing and controlling

Research and development factor:

The focus on research and development activities can vary greatly depending

on a company's competitive strategy Some companies want to become leaders in the market, the creators of new products, while other companies are satisfied with the submissive position and production of products is available on the basic skills to support this strategy which is also different, depending on whether it is a key factor

of competitive strategy or not

Information System:

- Management information system is a set of rules, skills, and clearly described methods by which people and equipment shall collect and analyze data in order to generate the necessary information for the administrators’ decision

- The best information system is a simple system, which provides information for those wishing people in the form of being used

- The purpose of this information is to improve the operation of a business by improving the quality of management decisions;

- Effective information system will collect, encode, store, aggregate and provide the information to answer these important questions of strategy and organization;

- Center of Information System is a database that contains the important records and data for administrators

Step 3: Identifying long-term goals and building business development strategies;

Step 4: Identifying action plans and deploying solutions to implement strategies;

Step 5: Checking results and adjusting accordingly;

3/ Use and collaboration tools to review and set forth business strategy:

a.External Factor Evaluation – EFE Matrix:

The EFE matrix is the evaluation of external factors, synthesis and summary

of the principal opportunities and risks of the external environment affecting the operation of the business which helps the managers assess the extent of the business

response to opportunities, threats and make judgments about the external factors that t is favorable or difficult for businesses

Table 3.1 External Factor Evaluation Matrix (EFE)

score

list a series of company's external

opportunities and threats

+ Step 1: Make a list of factors that play a decisive role for the success as

identified in the audit process from the external factors, including the opportunities and threats affecting the firm and its industry

+ Step 2: Assign to each factor a weight that ranges from 0.0 (not important)

to 1.0 (very important) This weight indicates the relative importance of that factor

to being successful in the firm’s industry The total weight level must be equal to 1,0

+ Step 3: Assign a 1 to 4 rating for each decisive factor of the success to

show how the company's current strategies response to these factors, including 4 is good response, 3 is above average response, 2 is average response and 1 is poor reaction

+ Step 4: Multiply each factor’s weight by its rating to determine a weighted

score

+ Step 5: Sum the weighted scores for each variable to determine the total

weighted score for the organization

Comments: Regardless of the number of key opportunities and threats

included in an EFE matrix, the highest possible total weighted score for an organization is 4.0 and the lowest possible total weighted score is 1.0 The average total weighted score is 2.5 A total weighted score of 4.0 indicates that an organization is responding in an outstanding way to existing opportunities and threats in its industry A total score of 1.0 indicates the firm’s strategies are not

capitalizing on opportunities or avoiding external threats

b Internal Factor Evaluation – IFE Matrix:

Internal factors are considered very important in every business strategy and objectives set by the enterprise, after taking into account internal factors, strategic managers need to set up the IFE Matrix to consider the ability of reacting and recognizing strengths and weaknesses From there things, it will help businesses take advantage of the strengths to exploit and prepare internal resources to confront the weaknesses and find ways to improve these weakness

According Fred R.David, the internal situation of the enterprise includes major factors such as human resources, marketing, finance, research and development, production and operations, quality management and information systems The result analysis of the internal environment of the enterprise is to determine the strengths, weaknesses and build the internal factor evaluation matrix (IFE)

Table 3.2 Internal Factor Evaluation Matrix (IFE)

list a series of company's

weaknesses

(Source: Nguyen Thi Lien Diep and Pham Van Nam (2006), Strategy and business policies of Labor and Social Affairs Publishing House, Ho Chi Minh City)

EFE matrix is developed in five steps:

+ Step 1: List key internal factors as identified in the internal-audit process

Use the main internal factors including both strengths and weaknesses

+ Step2: Assign to each factor a weight that ranges from 0.0 (not important)

to 1.0 (very important) This weight indicates the relative importance of that factor

to being successful in the firm’s industry The total weight level must be equal to 1,0

+ Step 3: Assign a 1-to-4 rating to each factor to indicate whether that factor

represents a major weakness (rating 1), a minor weakness (rating 2), a minor

strength (rating 3), or a major strength (rating4) Ratings are, thus, company based, whereas the weights in Step 2 are industry based

+ Step 4: Multiply each factor’s weight by its rating to determine a weighted

score

+ Step 5: Sum the weighted scores for each variable to determine the total

weighted score for the organization

Regardless of how many factors are included in an IFE Matrix, the total weighted score can range from a low of 1.0 to a high of 4.0, with the average score being 2.5 Total weighted scores well below 2.5 characterize organizations that are weak internally, whereas scores significantly above 2.5 indicate a strong internal position

c SPACE Matrix:

SPACE matrix shows that a business should choose the strategy: Aggressive, Conservative, Defensive, and Competitive strategy The axes of the matrix have the following meanings:

- FS: Financials Strengths

- CA: Competitive Advantage

- ES : Environment Stability

- IS: Industry Strength

To set up a SPACE Matrix need to follow the steps below:

• Step 1: Select a set of variables to define financial strength (FS), competitive advantage (CA), environmental stability (ES), and industry strength (IS)

Here are some of the indicators used to reflect on the SPACE matrix axis:

Internal strategic position External strategic position

- Working capital

- Price disturbances of competitive products

- Ease of withdrawal from the market - Competitive pressure

• Step 2: Assign a numerical value ranging from +1 (worst) to +6 (best) to each

of the variables that make up the FS and IS dimensions Assign a numerical value

ranging from -1 (best) to -6 (worst) to each of the variables that make up the ES and

CA dimensions

• Step 3: Compute an average score for FS, CA, IS, and ES by summing the values given to the variables of each dimension and dividing by the number of variables included in the respective dimension Similar to the IS, ES and CA

• Step 4: Plot the average scores for FS, IS, ES, and CA on the appropriate axis

in the SPACE Matrix

• Step 5: Add the two scores on the x-axis and plot the resultant point on X Add the two scores on they-axis and plot the resultant point on Y Plot the intersection of the new XY point

• Step 6: Draw a directional vector from the origin of the SPACE Matrix through the new intersection point This vector reveals the type of strategies recommended for the organization: aggressive, competitive, defensive, or conservative?

d SWOT Matrix :

SWOT is an abbreviation of the words: Strengths, Weaknesses,

Opportunities and Threats

Based on the information from the analysis of the internal and the external environment of the business, along with the corporate mission and objectives were set forth Next, the authors use the SWOT matrix to form strategies

Overcome these uncertainties

by utilizing the strengths

SWOT matrix helps us develop four types of strategies:

+ Strengths-Opportunities strategies (SO): These strategies are to use the

strengths within the enterprise to take advantage of external opportunities

+ Weaknesses - Opportunities strategies (WO): These strategies are to

improve the weaknesses within the enterprise to take advantage of external opportunities

+ Strengths-Threats strategies (ST): These strategies are to use the

strengths of the company in order to avoid or reduce the threats from the external environment

+ Weaknesses - Threats strategies (WT): The strategies aims to improve the weaknesses in order to avoid or reduce the impact of external threats

matrix:

+ Step 1: List external opportunities

+ Step 2: List external threats

+ Step 3: List internal strengths

record the results in the appropriate box

and record the results in the appropriate box

+ Step 7: Combine the Strengths and Threats to form ST strategy and record

the results in the appropriate box

+ Step 8: Combine the Weaknesses and Threats to form WT strategy and

record the results in the appropriate box

Purpose of using the SWOT matrix is to set forth feasible strategies which can choose, not to decide what the best strategy is Therefore, only some of the best strategies are selected from the SWOT matrix to perform

e QSPM Matrix :

After using the SWOT matrix to establish strategies, the authors use the

Quantitative Strategic Planning Matrix (QSPM) to choose the strategy that is

most suitable for the implementation of long-term goals of the enterprise

The QSPM table:

Key factors

Weights Alternative strategies

Basis of Attractiveness score

Strategy 1 Strategy 2

- List the internal factors

- List the external factors

+ Step 1: Provide a list of internal factors strengths and weaknesses Then

generate a list of the firm's key external factors opportunities and threats These

will be included in the left column of the QSPM You can take these factors from the EFE matrix and the IFE matrix

+ Step 2: Assign weights to each internal and external factor This rating is

similar to the EFE and IFE matrix

+ Step 3: Identify alternative strategies that businesses should consider

implementing In this step, the strategy research is formed from the SWOT matrix

in strategy formulation stage Then, gather strategies into distinct groups and strategies in the same group can be assessed together

+ Step 4: Identify the AS to each key external and internal factor The range

for Attractiveness Scores is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive The Attractiveness Score indicates

the relative attractiveness of each strategy compared with the other strategy in the same group of alternative strategies

+ Step 5: Calculate the Total Attractiveness Scores (TAS) in the QSPM

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

+ Step 6: Calculate the Sum Total Attractiveness Score by adding all Total

Attractiveness Scores in each strategy column of the QSPM The QSPM Sum Total Attractiveness Scores reveal which strategy is most attractive Higher scores point

at a more attractive strategy

CHAPTER 2 PRODUCTION-BUSINESS ANALYSIS

OF THE CAN THO POWER COMPANY

I/ Overview on the Can Tho Power Company (PCCT):

1/.The PCCT’s Formation and Development:

The Can Tho Power Company previously was known as The SCEE Private Power Company (France) from the French colonial Before 1975, the company named Phong Dinh Power Center in the Western Electricity Area, belonging to the

Vietnam Electricity From the date of the liberation of the South and national

reunification, the company renamed as Hau Giang Service of Power Management and Distribution In 1978, it renamed as Hau Giang Power Department

In 1992, the Hau Giang Province separately divided into two provinces: Can Tho and Soc Trang, the Hau Giang Power Department renamed as the Can Tho Power Department (under the decision No 146NL/TCCB-LD dated 03.21.1992 of the Ministry of Energy)

In 1996, the Can Tho Power Department renamed as Can Tho Power In

2004, the Can Tho province divided into 02 provinces: Can Tho City and Hau Giang Province The Can Tho Power was established on the basis of the old Can Tho Power Department

In 2010, due to the business model transformation, the Can Tho Power renamed as the Can Tho Power Company is a unit belonging to Southern Power Corporation;

Currently, the power supply in the Can Tho City is provided through 08 substations of 110 kV with a total capacity of 438 MVA The power grid has covered 05 districts, 04 suburban districts with more than 1469 km of high voltage lines, 2786 km of low voltage lines and 3657 substations 22/0.4kV with 865,744.5 kVA of capacity

The PCCT’s main task is to manage the operation, repair, and build new power lines and stations; implement the production and develop power system, serve for daily activities, manufacture, trade and socio-economic development, defense and security in the Can Tho City Currently, all 87/87 communes, wards and towns in the province of Can Tho city have electricity, reaching a rate of 100%; households having power are: 292.007/293.129 households, reaching 99.62% Particularly in rural areas with 96.371/97.018 households reached 99.33%

Officials and employees of the PCCT as of 31/12/2012 there are 717 people, including 163 women Organizational model has 01 management board, 13 departmets, 03 workshops, a professional team and 9 district power services

Over 38 years of formation and development, the PCCT went through many important historical landmarks and took steps firmly to establish itself as one of the city's strong economic unit, in providing safe and constant power, played an important role to the economic development and social stability and security and defense of the Can Tho City, successfully completed the task of production and business that was assigned by the Superiors

Parallel to the development of grid and source of the electricity, the PCCT is

industrial parks; projects are invested by the centers and locals in key economic sectors

Commercial electricity production in 2012 of the Can Tho Power Company

is 1.508 billion kWh, an increase of 7.57% compared with 2011; the average growth rate of 5 years (2008 - 2012) is 10.89%

The recent years, the power sector and locals have invested hundreds of billions to perform electrification programs of rural communes in the province to supply power directly to the rural people in order to improve and enhance the cultural and mental life and develop agricultural and rural economy Before electricity demand is rapidly growing, the company quickly made the quality of the overhaul, the renovation and upgrade of electricity distribution networks effective within the city

In the present conditions, in addition to the basic advantages of technical facilities, the PCCT also faced many challenges, requiring a continuous construction, strengthening and improvement of the management staff, technicians and skilled workers, productivity and intensity as well as increasing labor efficiency, overcoming all difficulties to complete the task of planning and economic and technical indicators Specifically the power target of loss in 2008 was 5.52%, in 2010 reduced 5.02% and in 2012 decreased to 4.84% This is a remarkable effort, hard labor of the collective employees of Can Tho Power Company in the past year that was recognized and appreciated by the Southern Power Corporation

The Company headquarter is located at No 06 Nguyen Trai, An Hoi Ward, Ninh Kieu Dist, Can Tho City

Company Name: Công Ty Điện Lực Thành Phố Cần Thơ

International transaction name: Can Tho Power Company

Abbreviation in English: PCCT

Tax code: 0300942001022

Business registration number: 5716000085

Tel: 0710.2221000 – FAX: 0710.2221039

2/.Business lines:

a Main business lines:

- Producing, distributing and trading of electricity; commanding and operating the system of production, transmission, distribution and allocation of power in the national power system

- Importing and exporting electrical energy;

- Investing and managing the investment capital of power projects

- Managing, operating, repairing, maintaining, overhauling, renovating, upgrading electrical equipment, electrical works; electrical experiments

b Other business lines related to the main business lines:

- Importing and exporting fuel, raw materials, supplies and equipment in the electricity industry;

- Constructing, supervising equipment installation of power plants, transmission lines and substations, producing construction materials, insulation materials, labor protection equipment

- Investing in mechanical power;

- Consulting project management; consulting projects, procurement, estimating and monitoring the construction of power plants, transmission lines and transformer stations, industry and civil works

- Undertaking the financial investment, trading capital that State was assigned to the EVN

- Training the human resources andcooperating with foreign labor training

c Another business lines:

- Trading hotel and tourism, media, advertising, mass media, investing, trading the real estate; leasing office; investing and trading the infrastructure, industrial parks

3/.Organizational structure of the Can Tho Power Company: Company’s Board of Directors, the Company's

departments, direct production departments;

Electro-Experimental workshop

Power services

in districts

Overhead line Team

3 1 Board of Directors:

Director:

Director is the legal representative of the PCCT; he is a person who is generally

in charge, in accordance with the rules and takes full responsibility for the activities and performance of the PCCT before the Southern Power Company and the Vietnamese law on directing and operating all units according to the general plan, use, preservation and development of capital and human resources by the Corporation, and at the same time assigns responsibilities to the Deputy Managing Director in charge of some fields of the Company to direct the depts and units (in some urgent and special cases, the director will directly guide)

Deputy Director:

The PCCT’s organizational structure includes 02 deputy directors, one is Deputy Director of Technology and other is Deputy Director of Sales; they are people who will help the Director in the field of engineering, business and also on behalf of directors to implement some authorized tasks, take responsibility before the Director of the Company, the Corporation and the law

3.2.Departments of the company:

There are 12 departments under the Board of Directors, the business unit is an advisory unit of the Board of Directors in business activities, construction, and services, and training they are responsible to the Director of Power Company for professional and technical activities

- Research and propose the method of organization, production and business management model of the company and subordinate units in accordance with the provisions of the State and the Group, the Corporation; organization charter, operation and development strategy of the company over time; Implement organizational plans, draft, approve and issue the decision on the Company’s organization for units

Perform technical solutions to ensure the business operations of the unit, ensure quality and high economic efficiency

3 Dispatch Dept:

Act as an advisor for the Director in commanding the operation of the grid so that it can be safe and economic Set up an operation mode of grids in the normal and safe working mode, and reduce incidents

4.Sales Dept:

- Act as counselor for the Power Company about the sales;

- Organize the customer management: analyze the business results of electrical energy, improve the efficiency of electricity supply; Organize the meter management

- Guide, check the implementation of power business processes in the units; have electricity professional guidance for county / district in meter management, contracting, and electrical recording and organize the collection

- Have Statistics of customers, electricity and sales to propose some solutions for the completion of the assigned plan targets

- Count, calculate and analyze the percentage of electricity transmission and propose measures to reduce the rate of loss Calculate the loss area, normal lines

5 Finance and Accounting Dept:

- advise the Director for financial and economic management; organize the accounting plan of the company Record all the reports of activities of business, construction and repair

- Advise the Director of the Company for receiving capital, capital preservation and capital growth by the Corporation

- Perform some measures to ensure the balance of revenues and expenditures, financial stability for the operation of the unit, urge unit about the collection and remittance to the Power Company Ensure capital for production and business, construction and repair of normal operation

- Fully implement the State budget obligations, timely pay to the Company, with economic sectors inside and outside the state-owned enterprise, and ensure the principles, the current regime of the State, the Corporation, and Power Company

6 Material Dept:

Provide, manage and use materials, spare parts and equipment efficiently, to ensure better service for the production, construction and repair of power network

7 Inspection, Security and Legislation Dept :

Perform the inspection, testing, protection, supervision of the electricity in accordance with law;

8 Technical Safety and Labor Protection Dept:

Advise the Director for electrical safety of the unit, to avoid risks to people and the electrical system

9 Information Technology Dept:

- Build andapprove plans to develop information technology systems of the Power Company

- Research, propose technical solutions and manage, guide the operation of the IT system under Power management

- Implement and monitor the repair, routine and periodic maintenance of the

IT system in the Power Company

- Set forth and manage the software development programs of units under the Power Company, make a plan of software development, application and management in the Power Company Install, upgrade and maintain the LAN / WAN System of the company

10 Company Office:

Collect, provide information and propose performance measures for the Company to consider, decide problems related to the management and administration for production and business activities

11 Project Management Board:

Coordinate with: Engineering & Planning Dept, Investment Management Dept, IT Dept, Finance and Accounting (FA) Dept to advise the Director for the implementation of investment in the construction

- Carry out the sale of electricity and manage the customer information in the area of management

- Record the electricity meter on schedule, completely and accurately Collect in accordance with regulations Manage invoices and debt remission; report timely the business operation in the professional form

- Organize the installation, meter management and measuring system in Power management area Regularly inspect and handle violations of customers' electricity use Monitor, check the meter boundary Repair the power supply to customers

 Electrical Experiment Team

This unit is testing materials, devices of the Electric Power to ensure the specifications prescribed by the electricity sector, testing supplies and equipment

under the contract with the customer

4 Electrical construction team

This construction unit is responsible for the building and renovating lines and substations of 35 kV or less, ensuring schedule and technical quality of electricity

II/ Analysis of the business environment of the PCCT:

1/ External Environment:

a Macro environment:

a1 Economic environment:

Can Tho is a city under central authority, located in the center of the Mekong River Delta (Mekong Delta) From more than a hundred years ago, Can Tho was named Tay Do - the capital of the Southwest and currently, Can Tho has become a city grade 1, one of four provinces of the economic region of the Mekong Delta and the 4th key economic region of Vietnam The advantages of Can Tho City are not

only in the fields of agriculture, fisheries but also in geographical location, that allowing to develop: urban infrastructure; transport infrastructure; high-tech agriculture; agricultural - fishery and seafood processing industry; tourism, tourism infrastructure and supporting industries

(Source: Trade Promotion Agency - Vietrade)

Compared with the country's GDP corresponding to: 6.78 – 5.89 – 5.03 %

Economic development situation has been implemented by Can Tho City: The largest is the international trade fair located in Cai Khe Ward, Ninh Kieu District; building more supermarkets graded 1 and 2 in Ninh Kieu, Binh Thuy, and

O Mon districts; upgrading four existing supermarkets in Ninh Kieu District to become the supermarkets graded 1, 2, including: Co-op Mart, Maximart, Vinatex; building supermarkets graded 1, 3 in Cai Rang District, and Thot Not, Co Do, Phong Dien and Vinh Thanh districts

In addition to the renovation, they have new construction of wholesale warehouses in major ports such as Cai Cui, Can Tho, Tra Noc, wholesale market

specializing rice of Thot Not District, farming market of Cai Rang District, the city also builds Highland Plaza buildings in Nam Hung Phu zone and 25-story buildings

in Cai Khe Dune At the same time, Can Tho will complete Tam Vu wholesale fish market, have the investment promotion in regional trade center construction, and

markets, and communal markets such as No 2, Lang Sen, Kenh, Nga Tu markets

Can Tho cooperates with a number of domestic and foreign corporations, businesses for the investment in building information, financial, and trading centers, regional international conference in the central of Ninh Kieu District; renovating and building new rural markets; developing and improving specializing commercial streets, convenience stores, shops adjacent the central markets of districts

Besides, Can Tho also makes effort to develop trading-services in downtowns such as Ninh Kieu, Binh Thuy districts, industrial port urban area in Cai Rang District; services-industrial urban areas, wholesale agricultural - fisheries - farming in the center of Thot Not District, high-tech urban area in O Mon District, ecological urban area in Phong Dien District, satellite urban areas in Vinh Thanh,

Co Do districts, Thoi Lai, Thanh An, Truong Xuan, Dong Binh towns

On the other hand, the city will implement comprehensively export programs

of agricultural and fishery products, handicrafts, footwear, apparel, and some new items; continue to build export programs, schemes of strong and potential commodities such as rice, seafood, apparel, leather, handicrafts in the increasing proportion of processed export commodities, creating new products; consolidating and sustaining the existing market and especially expanding fishery markets in foreign countries

The city will also raise the import proportion of machines and equipment from countries having high technology to accelerate the pace of innovation and modernization of the export industry, and strive to achieve export turnover of 3

billion USD in 2015 (Source: TTXVN)