Business development strategies of the National Southern Oil Spill Response Center (NASOS) period 2013-2017 and the vision to 2020

CrhIC 6 a ĐI K, Strategic Management — Group 2 ' TABLE LIST Chapter I: Fable 1.1: Statistics of the amount of oil spill in several years in Vietnam lable 1.2: Evaluation of SBUs with e

GRíGGS Global Advanced Master of Business Administration

PROJECT REPORT

BUSINESS DEVELOPMENT STRATEGIES OF NASOS

PERIOD 2013-2017 AND THE VISION TO 2020

Group 2 - Class GaMBA C0510:

1 Le Tan Duong

2 Le Thanh Hung

3 Nguyen Thi Thuy

4 Le Phong Dang Khoa

5 Nguyen Van Gap

Ho Chi Minh City 2012

( rid IC 0) Strategic Management — Group 2

THE COMMIEPMENTS

Group 2 consists of 5 members hereby to commit that all the work contained in this dissertation “Business Development Strategies of the National Southern Oil Spill Response Center (NASOS), period 2013~2017 and the Vision to 2020” 1s the result of our own unaided ettorts

All information and statistics used within are clearly referenced and linked to the main sources The research results have not published in any public works and researches betore

Ho Chi Minh City, 25 August 2012 Group 2 — Class GaMBA0I1.C0S10

Strategic Management — Group 2

ACKNOWLEDGEMENTS The results we achieved today first to come trom our own efforts however without the selfless help of involved people we can hardly achieved the expected goals Therefore, after finishing this final dissertation, we want to send our sincere thanks

to Center for Educational Technology and Carreer Development (ETC) which gave

We want to show our gratitudes to our professors and lecturers who have dedicately taught and inspired us with valuable knowledge that will be very useful for our current and future works

We also thank the Supervisor board who have instructed and assisted us through the

process of finishing the dissertation

In addition, our group very much appreciates the help from NASOS’s executive board for providing us valuable statistics and data used in this project

We also cannot forget to thank our coursemates who always readily share their knowledge and insiders’ experiences in specialized industries

Finally, it is our beloved families that gave us major supports and love to let us successfully finish the course

Please accept our most sincerely gratitudes

€;J+\IC,( 2) Strategic Management — Group 2

CONTEXT

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CHAPTER 1 RATIONALES OF COMPANY-LEVEL STRATEGY PLANNING 3

CHAPTER 2 ANALYSING THE CURRENT BUSINESS OPERATION AT NASOS28

Strategic Management — Group 2

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Management and Organisational Structure at NASOS- 3I

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Analysis of Current Business Activites of NASOS in period 2007-2011 35

Missions, Objectives and Development Strategy of NASOS.: 35

Current Business Situation of NASOS between 2007- 20I1: ae

Evaluation ofthe Potentials of Non-public Duties to NASOS: 39

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NASOS in Providing Ports & Warehouses Rental Services 101

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CHAPTER 3: STRATEGY AND SOLU TIONS PLANNING TO DEVELOP

DOMESTIC MARKET OF NASOS AND RECOMMENDATIONS NASOS 113

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Strategic Management — Group 2

ABBREVIATION LIST

CrhIC 6 a ĐI K, Strategic Management — Group 2 '

TABLE LIST Chapter I:

Fable 1.1: Statistics of the amount of oil spill in several years in Vietnam

lable 1.2: Evaluation of SBUs with elements of “Business Position”

lable 1.3: Evaluation of SBUs with elements of “Prospect of the Industry ~

Table 1.4: CPM

Table 1.5: QSPM

Chapter 2:

‘Table 2.1: Statistics of the amount of oil spill in several years in Vietnam

Table 2.2: Operational Cost and Revenue of NASOS in the 2007-2011 period

Table 2.3: Matrix for Internal Factor Evaluation of NASOS

Table 2.4: Matrix for External Factor Evaluation of NASOS

‘Table 2.5: Competitor Information in Oil spill response services Industry

Table 2.6: Competitive Image Matrix of Oil spill response services

Table 2.7: Factors lie on axes of SPACE Matrix for Oil spill response services Industry

‘Table 2.8: Operational Cost Summary

Table 2.9: Operational Cost and Revenue of NASOS in 2012

‘Table 2.10: Technical Specifications of NASOS I Ship

Table 2.11: Technical Specifications of NASOS II Ship

Table 2.12: Matrix tor Internal Factor Evaluation of Ship Rental Services

Table 2.13: Matrix for External Factor Evaluation of Ship Rental Services

Table 2.14: Competitor Information in Ship Rental Services

Fable 2.15: Competitive Image Matrix of Ship Rental Services

lable 2.16: Factors lie on axes of SPACE Matrix tor Ship Rental Services

Fable 2.17) Matrix tor Internal Factor Evaluation of NASOS

CulàIC,( 3) = Strategic Management — Group 2 ; :

lable 2.18 Matrix for External Factor Evaluation of Ports and Warehouse Rental

Services

Table 2.19: Factors lie on axes of SPACE Matrix tor Ports and Warehouse Rental Services

‘Table 2.20° Evaluation of SBUs with elements “Business Position”

‘Table 2.21: Evaluation of SBUs with elements “Prospect of the Industry”

Chapter 3:

‘Table 3.1: QSPM for Oil spill response services

Table 3.2: QSPM tor Ship Rental Service

Table 3.3: QSPM for Ports and Warehouse Rental Services

Table 3.4: Expected Business Result of NASOS year 2012-2020

Table 3.5: Expected Business Result for Ship Letting of NASOS year 2012-2020 Table 3.6: Expected Business Result of Ship NASOS I year 2012-2020

‘Table 3.7: Expected Business Result of Ship NASOS II year 2012-2020

Table 3.8: Expected Business Result of Ship NASOS III year 2012-2020

‘Table 3.9: Expected Business Result of Ship NASOS IV year 2012-2020

Table 3.10: Expected Business Result for Ports and Warehouse Rental Services

in Vung Tau base year 2012-2020

Table 3.11: Expected Business Result of Oil spill response services year 2012-2020

CC vã is Strategic Management — Group 2

Figure 1.3: Michael FE Porter's Five Forces Analysis

Figure 1.4: Identifying Strategies and Strategic Options

Figure 1S: Me.Kinsey — GE Matrix

Figure 1.6: Strategy Groups based on Mc Kinsey — GE Matrix

Figure 1.7; SWOT Matrix

Figure 1.8: SPACE Matrix

Chapter 2:

Figure 2.1: Aground Ship

Figure 2.2: Management Structure in NASOS

Figure 2.3: Organisational Structure in NASOS

Figure 2.4: Area of Business Activites of NASOS

Figure 2.5: Conservative Strategy of SPACE Matrix for Oil spill response services Figure 2.6 GOT Training I

Figure 2.7; SWOT Matrix for NASOS Oil spill response services

Figure 2.8: NASOS Ship

Figure 2.9: Conservative Strategy of SPACE Matrix for Ship Rental Service

Figure 2.10: SWOT Matrix for NASOS Ship Rental Service

Figure 2.11: Ports in Mekong Delta

Figure 2.12: Map of base located in Ho Chi Minh City

Figure 2.13: Map of base located in Vung Tau City

Figure 2.14: Conservative Strategy of SPACE Matrix for Ports & Warehouses for Rent Service

Figure 2.15: SWOT Matrix for Ports & Warehouses for Rent Service

Figure 2.16: Me Kinsey-GE Matrix

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CC s vn Strategic Management — Group 2 :

APPENDIX

Appendix 0: List of participants who helped to provide information for the project Appendix 1: Accounting methodology and financial reporting 2011 at NASOS

Strategic Management — Group 2

BUSINESS DEVELOPMENT STRATEGIES OF NATIONAL SOUTHERN OIL SPILL REPONSE CENTER (NASOS) IN THE

PERIOD 2013-2020 INTRODUCTION

1 The Context and the Needs for Research Topic:

ihe Nauonal Southern Oil spill response services Center (NASOS) is in charge of public tasks in preventing and repairing consequences of environmental pollution in activities that hold high risks of oil spilling

In addition the the main public tasks, Government also grants permission and encourages NASOS to engage in non-public business activities in order to maintain the existing human capital and generate revenue to offset incurred costs However, during 52 months of active operation, NASOS only participated in 8 times, thus the frequency of participation is: 8/52 = 0.153846 time/month

Given the capital investment of 98.731.481.257 VND and revenue stands at only 921.850.135 VND in the period 2007-2011, it indicates the under-performance of NASOS

The arising question is that: Why NASOS, a business unit that has good investment, has such an inefficient business performance? This has motivated our group to pursue research in business activities of NASOS

2 Research Objectives and the Applicability:

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Strategic Management — Group 2

Proposing business activities, solutions and strategies for the development in the

period 2013-3020

2.2 The Applicability:

This research 1s done based on the theory of company-level strategy and the current situation in NASOS From this, strategies are planned therefore the applicability of this research 1s very high because it 1s suitable to the existing resources of NASOS and current business environment This research will enable NASOS to both accomplish public tasks and commercial activities as it points out practical solutions tor NASOS to implement effective business strategies

3 Scope of Research:

Researching and assessing factors related company-level business strategies of NASOS in the past Proposing business expansion activites as well as strategies solutions for the Center in the near future

4 Research Methodology:

Internal and external secondary data are used together with formal discussions with executive board members from NASOS

5 Structure of Research Project: 3 chapters

Chapter 1: Theoretical basis of oil spill response services and the business development strategies

Chapter 2: Analysis of the current business situation at NASOS

Chapter 3: Strategic planning, solutions for domestic market development and potential proposals tor NASOS

CrhRIC i s) pe Strategic Management — Group 2

CHAPTER 1 THEORETICAL BASIS OF COMPANY-LEVEL STRATEGY

PLANNING

Theoretical basis of Business Strategy:

1.1.1 Definition of Strategic Management:

Strategy Is a general program of actions to achieve specific objectives Strategy of organization consists organ!zation’s goals, how to perform and how to ensure its resources are tully adequate

Atred Chandler detined strategy as: Strategy includes the determination of basic long-term goals of an organization, the courses of action and allocation

of resources necessary to achieve those objectives

According to James B.Quinh: Strategy 1s a kind of plans to coordiate main objectives, policies and operational sequences together

According to Fred R, David in his "Outline of strategic management": strategy

is a mean to achieve long-term goals Business strategies may include the development of geography, diversification of activities, property, product development, market penetration, cutting spending, liquidation and joint

CsI os i Strategic Management — Group 2

- Function-level Strategy

1.1.3 Company-level Strategy:

Company-level strategy is identifying and defining the purposes, the objectives of the company determing the business that the company pursue, creating basic policies and plans to achieve goals and the company's distribution of resources between business activities Company strategy 1s applied to the entire business

Aim to objectives and overall range of activities of the company

In function-level strategy, it focuses on assisting company-level strategies and operational and business areas

+ = Types of Strategy:

Based on the level functions, strategy can be divided into the following groups:

In this strategic group consists of strategy forward, backward and horizontal combination

- Forward combined strategy: Used to increase control or ownership towards the

“+ Specilised Strategies Group:

This strategic group consists of market entry strategy market development strategy and product development strategy

C she | rst ‘ ‘

- Market Entry Strategy Increasing the market share tor the product or services available in the current market

- Market Development Strategy Putting existing products or services of the business in new geographic areas

- Product Development Strategy; Adding to the current market products or services similar to existing products of the business but have improved modified features

“+ Expanding Operation Strategies Group:

diversification and mixed diversification

- Concentric Diversification: Adding to existing market products or services relating

to the current product

- Horizontal Diversification: Including existing market for current customer group

of the new product or service, not related to the current product

- Mixed Diversification: Adding to existing market new products or services, not related to the current product

s* Other Strategies Group:

In addition to the strategies mentioned above, in reality there are a number of other strategies that businesses can apply as joint venture strategy, downsizing operations, giving up activities, liquidation etc

- Venture Strategy: When one or more businesses coorperate to pursue a certain goal

- Narrowing Strategy: When businesses need to restructure, proceed to give a number of products or areas of activity in order to save the position of the business

~ Liquidation Strategy: Is the sale of business assets Admitting defeat and trying to save up what you can

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CzItlC,t 3 “ Strategic Management — Group : : 3

1.1.4 Strategic Management Process:

Comprehensive strategic management model is described in Figure 1.2, according Fred R David this is a widely accepted strategic management model, It presents a clear and practical approach Business strategy management process Is divided into three phases:

Figure 1.2: Comprehensive Strategic Management Model

(Source: Fredr David — The Concept of Strategic Management)

+ = Strategic Planning Phases:

The purpose of the analysis of the external environment is to develop a list of opportunities that external environment conditions can benefit the company and

Cree ra) : = Strategic Management — Group 2

threats that the company should avoid to reducing the harms from the external environment There are many different factors which external environment (macro environment and micro environment) therefore the analysis of the external

environment is limited to the factors that affect the business

| POTENTIAL COMPFTITOFS

|

MAIN SUPPLI UPPUERS | — COMPETITORS — _ CUSTOMERS | | )

Hình 1.3: Michael E Porter`s Five Forces Analysis

(Source: Griggs Universitv-Strategic Management)

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€ ;l\[C,( s) HE Strategic Management — Group 2

In every company there are always different strengths and weaknesses Strengths and weaknesses of the internal environment, together with external opportunities, threats and mission act as the basis for setting goals and strategies of the company Internal environment factors include:

management,

production according to plan such as: human resources management, production management, quality contro] management, financial and sales management

establishment and satisfying the demands and needs of customers Marketing management consists of market research, select market objectives, distribution channel system, after sale service etc

Whether a business strategy is correct or not, it will not be effective if human resources do not work efficiently Personnel include factors such as: human resources organizational structure, quality of human resources, retention policy and human resources development etc

Input into output and services Production process includes: designing manufacturing process, selection of production lines, production scales, layout, quality, services and prices

Some important techniques to form a strategy that can be arranged in a decision-making process consists of three phases 1s described in Figure 1.4 The tools presented in this process can be applied to the entire organization in order to determine pricing strategy as well as evaluation and selection strategy

Strategic Management — Group 2

“+ External Factor Evaluations (EFE):

EFE matrix assesses external factors, synthesis and summary of the principal opportunities and risks of the external environment that potentially affects the operation of the business It helps managers to correctly assess the extent of the business response to opportunities, risks and make judgments about whether the external factors affecting the company are favorable or difficult

Building this matrix requires the following 5 steps:

- Step i: M ake a list of 10 - 20 opportunities and threats factors that can mainly affect the success of companies in the industry / business Industry

- Step 2: Cl

important)

assify the importance on a scale from 0.0 (not important) to 1.0 (very

to each factor The importance of each factor depends on the level of the factors that affect the Industry / industry that business 1s manutacturing / trading Total score of the importance of all the factors must equal 1.0

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BÃI Strategic Management — Group 2

factor depends on the level of each company's response factor, where 4 1s the best response 3 1s above average 2 1s the average response, | response 1s Weak

- Step 4: Multiply the importance of each factor by its weight to determine the score of each factor

- Step 5: Sum ofall the factors is the total score of the matrix

KF valuation: The total score of the matrix does not depend on the number of elements in’ the matrix, the highest 1s 4 and the lowest point is_ 1

- If the total score is 4, the company 1s responding well to the opportunities and risks

- If the total score is 2.5 companies are responding reasonably well to the opportunities and risks

* If the total score is 1, the company ts weakly response to the opportunities and risks

“* Internal Factor Evaluations (IFE):

Internal factors are considered very important in every business strategies and objectives set by the business, after taking into account internal factors, managers need to set up the matrix elements to consider the ability to react and recognize strengths and weaknesses It helps businesses take advantage of the strengths to exploit and prepare internal resources to confront the weaknesses and find ways to improve this weakness

Building this matrix requires the following 5 steps:

- Step 1: Make a list of 10 - 20 opportunities and threats factors that can mainly atfect the success of company and its set objectives

- Step 2: Classify the importance on a scale from 0.0 (not important) to 1.0 (very Important) to each factor The importance of each factor depends on the level of the factors that affect the Industry / industry that business is manufacturing / trading Total score of the importance of all the factors must equal 1.0

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C;RICGCs) ; Strategic Management — Group 2 CS

good, 3 1s above average 2 1s the average, | response Is weak

score of each factor

- Step 5: Sum of all the factors 1s the total score of the matrix

Evaluation: The total score of the matrix is in the range from point | to point 4, does not depend on the number of the impertant factors tn the matrix:

* If the total score is less than 2.5, the company’s weaknesses are internal factors

* If the total score is more than 2.5, company’s strengths are internal factors

** Business Porfolio Analysis Matrix (McKinsey-GE):

The business portfolio analysis of McKinsey — GE is an approach to build matrix which aims to analyse and evaluate business portfolio in SBUs (Strategic Business Unites) of an organization A SBU can be all business activities of small and medium businesses or can be a business unit of large/ multinational corporations A SBU has its own business objectives and strategies

The analysis of business portfolio aims to:

- Analysing current business portfolio to make decisions regarding business expansion or cut back activities in SBUs;

- Deciding the removal of inefficient SBUs

McKinsey — GE Matrix uses 2 factors that are “Prospects of Industry” and

“Business Position” for the evaluation These factors are assessed by marking method

Steps of building matrix are as follow:

T1141

( Hid IC if 3)

Y Factors affect prospect of Industry market scale potential Industry growth

Strategic Management — Group 2

price competitiveness general market risks barriers to entry product differentiation,

Y Factors affect the position of the business: assest values, brand strength market share, customers’ loyalty Các nhân tô ảnh hương tới vị thể của doanh nghiệp: giá trì tông tài sàn sức mạnh thương hiệu thị phản sự trung thành của khách hàng relative costs, relative profit, technology progress, service quality, financial strengths required resources, management ability -Step 2: Constructing weights for SBUs

-Step 3: Constructing points for SBUs trom 1-5 in which:

- Unique points about the Industry

Table 1.6: Evaluation of SBUs with elements of “Prospects of the

Strategic Management — Group 2

(Source: Strategic Management lecture materials — Griggs University)

- Step 4: Constructing Mc.Kinsey — GE Matrix:

Table 1.5: Mc.Kinsey — GE Matrix

(Source: Strategic Management lecture materials — Griggs University)

- Step 5: Assessing Strategic Group based on Mc Kinsey — GE Matrix:

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GR Phu) G9 Strategic Management — Group | | 2

Figure 1.6: Strategy Groups based on Me.Kinsey — GE Matrix

(Source: Strategic Management lecture materials — Griggs University)

v Aggressive Strategy Group:

# |: Agressively attacking

=2: Attack in specialized areas

* 3: Persistent attacking

Y Defensive Strategy Group:

* 4: Selected service expansion

Strategic Management — Group 2

eliminate the potential risks that they are not aware of before Furthermore by using a basis for comparison and SWOT analysis between business competitors enterprises can outline a strategy to help businesses differentiating themselves from competitors, enable businesses to compete more effectively in the market Building this matrix requires the following 8 steps

Step I) List major opportunities from external environment (O1, O2 etc): Step 2: List major threates from external environment (T1, 12 etc);

Step 3: List major strengths from external environment (S1, S2 etc):

Step 4: List major weaknesses from external environment (W1, W2 etc) Step 5: Combine strengths and opportunities to form strategies (SO):

Step 6: Combine weaknesses and opportunities to form strategies (WO): Step 7: Combine strengths and threats to form strategies (ST),

Step 8: Combine weaknesses and threats to form strategies (WT)

CzlklC,( ` a, Strategic Management — Group 2 ; ;

SPACE Matrix (The strategic Position & Action Evaluation matrix) 1S a management tool to analyse strategy It 1s used to identify which strategy is the best for the business to pursue

+6 +5

„5 +2

+ -l

-2

-4 -5 -6

of overall strategy

The steps to develop the mairix are as follow:

advantage (CA), environment stability (ES) and industry strengths (IS) These are

some of the indicators reflected on SPACE Matrix’s axes

the value of -1] (Best) to -6 (Worst) for each factor of ES and CA

then divide for the number of element in FS Apply the same procedure for IS, ES and CA

SPACE Matrix

procedure to Y axis Identify the intersection in XY axis

the new intersection This vector shows the suitable strategy for the business: Attack, Competitive, Defense or Cautious Strategy

“* Competitive profile Matrix:

This matrix is built in order to make comparative evaluation of companies with major competitors in the same industry The comparison is based on the factors affecting the competitiveness of companies in the industry Thereby managers

17 14]

Strategic Management — Group 2

consider the strengths and weaknesses of the company compared to competitors identify competitive advantages for the company and weaknesses to overcome

Building this matrix requires the following 5 steps

competitiveness of companies:

Important) for each factor The individual importance level depends on its influence level on the competitiveness of business The total score need to be equai to 1.0,

factor depends on the ability of the company to the elements, of which 4 is good, 3

is above average, 2 1s average, | is weak;

score of elements;

Evaluation: Compare the business’s total score with major competitors In the industry to evaluate the competitiveness of the company

s*Qwdantiftafive Strategic Planning Matrix (QSPM):

Strategic Management — Group 2

(QSPM Matrix is aimed to evaluate and rank the strategic plans, trom which we choose the best strategy for the business This matrix using all the information data

trom the above matrix: IFE, EFE CPM SWOT matrix ete

Building this matrix requires the following 6 steps:

- Step 1: List internal strengths, weaknesses (should be at least 10 elements) and external opportunities and threats (at least 19 elements) in the left column This information should be obtained from the EFE matrix and [FE matrix,

- Step 2: Classify for each important internal and external factor This classification 1s done the same as in EFE Matrix and IFE Matrix:

~ Step 3: Identify suitable strategies that business can use These strategies are formed and assembled in separate groups;

- Step 4: Determine the attractive score (AS) which is the quantification of the

relative attractiveness of each strategy in the strategic group can be replaced Attractive score is determined by considering the impact the choice of strategies being evaluated for each important internal and external factor “AS” 1s allocated

to each strategy so as to denote the relative attractiveness of each strategy compared to other strategies Some attractions are as follows: |-not attractive, 2- less attractive, 3 - pretty attractive, 4 - very attractive If certain factors do not affect the selection then it is not marked and the column ts left blank;

- Step 5: Calculate the total attractive score (TAS) Multiply the classification score with the attractive score in each row If only impacts of either external or internal factors are considered, TAS indicates the relative attractiveness of each strategy and the higher TAS the more attractive the strategy 1s:

- Step 6: Calculate attractive score Sum the TAS for each strategy, The TAS shows the best strategy in each group of choice

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Strategic Management — Group 2

(SPM Matrix has many advantages such as combining appropriate external elements to the decision-making process, continuously researching strategic groups unlimited number of strategies can be assessed However it also has some limitations such as: performing matrix QSPM requires intuitions and judgments based on experience The discussions between the administration, the staffs in the process of strategic analysis and choice may raise different opinions

Implementation strategy is often called the action stage of strategic management The execution of the strategy Is

- Set short-term goals;

- Adjust the organizational structure;

- Develop policies;

- Develop a budget:

- Develop corporate culture

This stage is considered to be the most difficult in the strategic management process because it not only requires sensitivity, determination but also sacrifice of the administrator The successful execution of a strategy 1s critical in the ability to use limited resources to thoroughly solve the task

This 1s the final stage in the process of business strategic management In this stage the administrator will monitor the results of above stages It is needed to conduct strategic check to ensure the strategies are carried out as intended or not In the case

of "no" it is necessary to apply the adjustment strategy Phase includes the measurement of work, determining the results and achievements of individuals and units detecting mistakes and applying corrective measures

Strategy process 1s a continuous and complex process Just a small change in one of the main steps in the model can change some or all of the steps Therefore strategic planning strategy implementation, and evaluation activities are required to be

21141

carried out continuously regularly not just at the end of each year Strategic

Strategic Management — Group 2

management process does not seem to stop at any time Strategic management process In practice cannot be analyzed explicitly and strictly implemented as proposed in the model The strategies are not flexible but must choose the order of priority to implement

The model also indicates the existence of a lot of factors that affect the strategic management in the business, such as the size of the business A number of other factors also affect the management style, the complexity of the environment, the complexity of the product, the nature of the problem and the purpose of the planning system tn the enterprise

1.1.5 Theory of Market Expansion and NASOS’s Market Expansion

Strategic Management — Group 2

money trading and other services| Market in this sense is both concrete and abstract covering both input and output markets with buyers and sellers

Business market includes input market and output market Input market ts the supply of factors of production (raw materials, capital, human resources, etc ) including vendors Output market 1s where businesses supply goods to customers customer markets including consumer products Both markets have an important role tor the operation of a business if the first market decides the existence and quality of the output product the output market decides which goods are acceptance

by customers, whether to continue production or not, what determine the existence and development of businesses in the market

From the sellers’ perspective in the consumer market, Philip Kotler - famous economist in the field of Marketing launched a more specific view of the business market: The market consists of all potential customers with a specific need or desire, willing and able to participate in the exchange of goods to satisfy the needs and wants

Thus market size depends on the number of people in need and ts able to satisfy that demand through exchange and 1s limited to a particular region or a particular domain In this sense, market has a more specific nature which can be measured, evaluated and compared The most common goal of business is pursuing market share and profits the approach of Philip Kotler is appropriate and preferred The market size is comprised as the number of customers 1.e to measure the market size

We Just count the number of customers in that market However it is too simple and not entirely accurate, but the market size ts calculated based not only on the number

of customers but are based on sales volume and revenue yield from that amount

Customers

From marketing point of view, the market 1s divided into several objects: the overall market potential market target market Overall market includes the customer ts the total number of residents in a given space they have the demand to buy with different purchasing power so there 1s a huge number of customer in the overall

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Strategic Management — Group 2

needs purchasing power and different abilities One or more groups become the

and target market Potential market is the market consists of one or more groups of

chosen to meet the needs based on a careful study of the process needs, purchasing power, the market's ability to buy the similarities and consolidated with the financial ability, production capacity, management and macro and mircro-economic conditions Therefore the target market is now dominating the market The potential

It can be said that the target market 1s a major condition for the existence of the

potential market to turn it into the target market

It is not coincidence that every business projects carry out market research extremely carefully and meticulously Market research will helps businesses to respond to a series of strategic questions: Producing what? Fow whom? The scale

of production? The answer to all these things lie on the market: Market size? Characteristics of the market? Market demand? Answers for these questions enable the business to decide whether to go on with the production The more complete this step is, the higher the chance of success of the project The market is a necessary condition for the establishment of the business

of business Providing the means for the circulation of goods providing customers for consuming process Revenue and profit are both a driving force for business development

¬

All business entering the desired economies has the common goal of growing stronger Thus business must continually develop and expand the market The scale

ol the enterprise depends on the market share of the business market which in turn

is dependent on the size of the market The larger the size of the market, the more chance for business development and vice versa So the market is both a re- evaluation criteria and the method of development tor business

In short a business opeartes in a market economy, where the market share and profit goals always come first the market plays a decisive role in the survival and development of enterprises, it 1s the survival environment in the present and the future

business How can a business not only exist but also strongly and firmly grow in the market? The answers to this question are the main aim for every actively operated business in the world

The first thing you need to know about market expansion is that it Is not simply a term or a simple action but a lengthy, complex, time and money-consuming process Expanding market requires very a specific plan with the right direction, a reasonable policy, and effective solutions to be implemented in the long term on a continuously regular basis Thus it 1s seen as an important task in the business Market expansion work understood in a simple sense is a process that includes research, exploit and dominate the market in order to increase the size of the market which in turn increases the number of customers, revenue and profitability

of the business In the end, the objective of any business in the economy ts profit profit depends business development which depends on market size This means expanding the market 1s both the target and an important mode of operation of any

business in the market economy

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Strategic Management — Group 2

All businesses conduct business in a certain time and with the goal of profit It 1s needed to be done via market channel and sales activities

As we all know the demand is very diverse but the demand for a certain goods/service is limited in a certain period of time while there are always fierce competitiors producing the same goods/service The business will have to find a way to win the most favorable conditions for sales

Therefore expanding the market ts the objective requirement for enterprises

1.1.6 NASOS Market Expansion is an Objective Factor:

Business activities in the manufacturing sector are continuously However a number of business activities in the field of oil spill response services have discontinuous nature but requires timely response at the time of demand

Because the oil spill response services market is a critical area, but the incident does not occur often, however the Government must be fully equipped with all the resources and these resources need to be located standby, ready to use immediately

So if the resources are only in the standby and idle state, it will reduce the effective use of resources If the resources are not used and maintained frequently, when needed will easily cause troubles It is just like how human capital is wasted when not frequently being in contact with professional work Thus, efficient use of resources will be low Under these circumstances, the units should use the strengths

of existing resources, specialized equipments to increase additional source of revenue and profit

However, with strong resources and support in the industry, the unit will

"Expanding market in depth"

Expanding market in depth is increasing market size increasing the number of customers by seeking new customers in the current market rather than expanding the geographical market | The major criterion is to serve more different customer groups in the current market gradually took over the market thereby sufficiency reduce the burden on the government budget

Clk Is s)

Strategic Management — Group 2

In Chapter | our group introduced

** Basic concepts in the tleld of oil spill response services,

«* Theoretic rationale for planning implantation and evaluation of strategies,

«* Analysis of steps of matrixes used to assessing the suitability of strategy

In this topic, our group uses: External Factor Evaluation Matrix, Internal Factor Evaluation Matrix, McKinsey-GE, Competitive Protile Matrix, SWOT, SPACE, QSPM Matrix;

** Point out the absolute necessary of market expansion of NASOS as a long-term objective

In chapter I, we have systematized the theories on company-level strategy and building company-level strategy for a business In order to form a strategy, firstly, we need to analyse strengths, weaknesses in the internal environment and identify opportunities, threats from external environment of NASOS Based on that basis, IFE Matrix, EFE Matrix, CPM are established Assessing and evaluating expand business portfolios through Mc.Kinsey-GE Matrix in order to confirm the position of these activities In addition, SWOT Matrix and QSPM are used to select the most suitable strategies tor the portfolio These are important rationales for analyzing the current business activities in NASOS so as

to propose expansion business portfolio and development strategies for NASOS

in Chapter 2, also to suggest solutions to implement and strengthen NASOS‘s position in Chapter 3

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2.1 The Birth and the Development of NASOS — An Overview:

2.1.1 Overview of the Business Services:

2.1.1.2 Overview of Oil spill response services

Minimizing the harm caused by oil pollution in the operation of oil and gas industry

on the environment and economy in Vietnam The plan focuses on response measures for mass volume of oil spill or oil spill with smaller volume but have the potentials to cause great harms to the environment

4 = The Current Situation in Oil spill response services: