A study on strategic development of hung vuong university hochiminh city for period 2010 – 2020

65 CHAPTER 4: ESTABLISHMENT OF DEVELOPMENT STRATEGY OF HUNG VUONG HOCHIMINH CITY UNIVERSITY FOR THE PERIOD OF 2010-2020 .... Therefore, leaders of Hung Vuong HCMC University is aware tha

A Study On Strategic Development of Hung Vuong University Hochiminh City

For Period 2010 – 2020 CAPSTONE PROJECT REPORT

Ho Chi Minh City

 Phan Thi Yen Ha

 Le Quyet Tam

 Nguyen Ngoc Thanh

 Tran Van Tuan

 Nguyen Thanh Tung

 Nguyen Thi Bich Van







ACKNOWLEDGEMENTS

First of all, we, Group 1, would like to thank Center for Education Technology and Career System - The National University of Hanoi, has created conditions for us to join the training program of Griggs University

The course really helped us a lot to increase knowledge in business management as well as reality business skills and practical experiences in the daily works

In addition, we also sincerely thank all the teachers, professors as well as responsible members of the program who are very enthusiastic support for us and the whole class to complete the training

With this our thesis, we would like to use the knowledge acquired through the course that have been applied to the actual situation in Hung Vuong Ho Chi Minh City University to raise the efficiency of strategic management

ASSURE

This thesis is the study of our group really, is done on the basis

of theoretical knowledge and research classic survey the real situation

The data and results of the thesis is true, given the strategy comes from practice and experience, have never been published in any form before the presentation and recognition

Once again, we also committed that this study were writen by ourself and we have all rights of it

Finally, I would affirm again the truthfulness of the promise

TABLE OF CONTENTS

LIST OF ABBREVIATIONS 5

LIST OF TABLES 5

LIST OF FIGURES 6

LIST OF APPENDIXES 6

INTRODUCTION 7

1 Rationale of the study 7

2 Objective of the study 8

3 Method of the study 8

4 Scope of the study 8

5 Structure of the study 9

6 Scientific and practical significance of the study 9

CHAPTER 1: LITERATURE REVIEW FOR STRATEGY AND UNIVERSITY DEVELOPMENT STRATEGY 10

1.1 Concept and Role of business strategy 10

1.1.1 Concept of Strategy and Business strategy 10

1.1.2 Role of Business Strategy 11

1.2 Strategic planning process 11

1.2.1 Determination of vision, mission and goals of the industry, enterprise 12

1.2.2 Environmental analysis 12

1.2.2.1 The External factors analysis 13

1.2.2.2 Value chain analysis 14

1.2.2.3 The Internal factors analysis 15

1.2.2.4 Competitive Profile Matrix (CPM) 16

1.2.3 Strategic Analysis and Choice 17

1.2.3.1 Locate strategies by Micheal Porter's 5 generic strategy 16

1.2.3.2 Strategies in action by SWOT Matrix 17

1.2.3.3 Determine strategies by SPACE Matrix 18

1.3 Concept and features of private university 19

1.4 Legal issues in connection with higher education 20

1.5 Role of competitive strategy for university 20

CONCLUSION OF CHAPTER 1 21

CHAPTER 2: INTRODUCTION TO OPERATION OF HUNG VUONG HCMC UNIVERSITY 22

2.1 Overview of Hung Vuong HCMC University 22

2.1.1 History and Development of Hung Vuong HCMC University 22

2.1.2 Product features 23

2.1.3 Functions and duties 23

2.1.3.1 Functions of HVU 23

2.1.3.2 Duties 24

2.1.4 Organization structure of HVU 25

2.1.5 Salary policy 26

2.2 Activities of HVU 27

2.2.1 Training 27

2.2.1.1 Training scale 27

2.2.1.2 Training form, profession and result 28

2.2.2 Scientific research and international cooperation of the university 30 2.2.3 Material and technical facilities of the university 31

2.2.4 Finance 33

CONCLUSION OF CHAPTER 2 33

CHAPTER 3: ANALYSIS OF HUNG VUONG HOCHIMINH CITY UNIVERSITY’S ACTIVITIES 35

3.1 Determination of value chain 35

3.2 Analysis of external environment 35

3.2.1 Analysis of macro environment 35

3.2.1.1 Political and Legal factors 35

3.2.1.2 Economical factors 37

3.2.1.3 Cultural and Social factors 38

3.2.2 Analysis of micro environment 40

3.2.3 The External Factors Evaluation Matrix 45

3.3 Analysis of internal environment 46

3.3.1 Personnel and organization 46

3.3.2 Financial resources 47

3.3.3 Attractiveness of profession 48

3.3.4 Management capacity 49

3.3.5 Marketing 50

3.3.6 Material facilities 50

3.3.7 Tuition 51

3.3.8 The Internal Factors Evaluation Matrix (IFE) 53

3.4 Determination of Advantage competition 54

3.5 Choice Strategy 60

3.5.1 Determine of generic strategy 60

3.5.2 The SWOT Matrix 60

3.5.3 The SPACE Matrix 63

CONCLUSION OF CHAPTER 3 65

CHAPTER 4: ESTABLISHMENT OF DEVELOPMENT STRATEGY OF HUNG VUONG HOCHIMINH CITY UNIVERSITY FOR THE PERIOD OF 2010-2020 66

4.1 Demand forecast 66

4.1.1 Number of students 66

4.1.2 Human resources 66

4.1.3 Material facitlies 67

4.1.4 Finance 67

4.1.5 Marketing 67

4.2 Development direction of HVU by 2020 67

4.2.1 Vision Statement for a year 2020 67

4.2.2 Mission Statement 68

4.2.3 Directional values and quality policy 68

4.3 Demand of goals by 2020 69

4.3.1 Training 69

4.3.2 Research and international cooperation 70

4.3.3 Human resources 71

4.3.4 Material facilities 71

4.3.5 Finance 72

4.3.6 Marketing 72

4.4 General development strategy 73

4.5 Solutions to strategic implementation 74

4.5.1 Viewpoint of solution development 74

4.5.2 Solutions to training 74

4.5.3 Solutions to research and international cooperation 75

4.5.4 Solutions to human resource development 76

4.5.5 Solutions to the implementation of management procedure 77

4.5.6 Solutions to material facilities investment 77

4.5.7 Solutions to finance and assets increase 79

4.5.8 Solutions to marketing and brand development 79

CONCLUSION TO CHAPTER 4 80

CONCLUSIONS 81

SUGGESTIONS 83 APPENDIXES

REFERENCES

LIST OF ABBREVIATIONS

EFE: External Factor Evaluation

HVU: HungVuong HoChiMinh City University

IFE: Internal Factor Evaluation

CPM: Competitive Profile Matrix

VCA: Value Chain Analysis

SPACE: Strength Position and Action Evaluation

SWOT: Strengths-Weeknesses-Opportunities-Threats

HCMC: HoChiMinh City

VLU: VanLang University

LIST OF TABLES

Table 1.1: The External Factors Evaluation Matrix (EFE) 14

Table 1.2: The Internal Factors Evaluation Matrix (IFE) 16

Table 1.3: The Competitive Profile Matrix (CPM) 16

Table 1.4: The SWOT Matrix 17

Table 2.1: Training majors and programs 29

Table 2.2: Floor area and number of classrooms 32

Table 2.3: Number of equipments and computers 32

Table 2.4: HVU‟s Income Statement in 2008, 2009 33

Table 3.1: Analysis of external factors matrix of HVU (EFE) 45

Table 3.2: Analysis of internal factors matrix of HVU (IFE) 53

Table 3.3: HVU‟s Competitive Profile Matrix 59

Table 3.4: HVU‟s SWOT Matrix 62

Table 4.1: Main strategies 73

LIST OF FIGURES

Figure 1.1: Planning Strategy Process 12

Figure 1.2: Environment analysis model 13

Figure 1.3: Porter‟s 5-forces Model of competition 14

Figure 1.4: Value chain 15

Figure 1.5: Michael Porter‟s 5-generic strategy 17

Figure 1.6: SPACE matrix 18

Figure 2.1: Organization diagram of Hung Vuong HCMC University 25

Figure 2.2: Number and organization structure of HVU 25

Figure 2.3: Number and qualification of managers of HVU 26

Figure 2.4: Number and qualification of lecturers of HVU 26

Figure 2.5: Targets and real number of enrolment over years 28

Figure 2.6: Compare number of graduates with of enrolment over years 28

Figure 3.1: Value chain of HVU 35

Figure 3.2: GDP growth rate of Vietnam over years 37

Figure 3.3: Average income per capital of Vietnam over years 37

Figure 3.4: Targets and number of applications over years 39

Figure 3.5: The HVU‟s 5-force competition 40

Figure 3.6: The level of HVU‟s 5-force competition 45

Figure 3.7: Ratio of student/lecturer and student/full-time lecturer 47

Figure 3.8: Level of tuition rise 48

Figure 3.9: Percentage of drop-out students 49

Figure 3.10: Target and Number of real enrolment of HVU 52

Figure 3.11: Target and Number of real enrolment of VLU 52

Figure 3.12: HVU‟s generic strategy 60

Figure 3.13: HVU‟s SPACE Matrix 65

LIST OF APPENDIXES

Appendix 1: Number and structure of officers, employees and 1a

lecturers of HVU Appendix 2: Targets, number of application and admission 2a Appendix 3: Number of graduates over years 3a Appendix 4: Number of lecturers over years 4a Appendix 5: Number of managers of HVU over years 5a Appendix 6: Number of lecturers of VLU over years 6a Appendix 7: Targets, number of application and admission of VLU 7a

INTRODUCTION

1 Rationale of the study

In 1993, the policy of educational socialization of the Party and Government was released in order to create favorable conditions for domestic education and training to develop, promptly provide highly qualified and skilled human resources for the cause of national industrialization and modernization, by

2010 our country basically becomes an industrial country in the modern direction, at the same time, in order to meet reasonable demands and desires of most of the public for studying, improving qualification, upholding the most valuable tradition of Vietnam – studiousness Responding to such policy, together with other private universities, colleges in Ho Chi Minh City and the whole country, Hung Vuong HCM University was established on the 14th August

of 1995 with the norm of building and developing the “Scientific – Developed –

Ethical” university It can be said that, for over 15 years of construction and

development, by now, in comparison with other private universities and colleges, Hung Vuong University has not developed appropriately with its position for several reasons

In the context of globalization and WTO integration, in the near future, many foreign universities will penetrate the education market of Vietnam, in addition to the competition of many domestic universities and colleges Therefore, leaders of Hung Vuong HCMC University is aware that if there are no changes and development by building a development strategy towards customer demands and supply of high quality training services, it is sure that the university will not attract students So, the university will not be able to self-control its operating expenditure, which leads to bankruptcy risk From above real demand,

we chose the topic: “A Study On Strategic Development of Hung Vuong

University Hochiminh City For Period 2011 – 2020”, in order to suggest some

solutions which can be applied by leaders of the university in the reality

2 Objective of the study

In current social context, in comparison with social demand, Hung Vuong HCMC University has potential and desires to further develop in terms of scale and quality Establishment and strategic management require leaders of the university need to prepare both theoretically and practically in order to promote the university to higher position Basis for strategic planning is to re-evaluate objectively the strengths, weaknesses as well as the capacity to respond to external factors of the university, then to determine goals as well as to choose short-term and long-term strategies

So, objective of the study is to analyze and evaluate comprehensively the real situation of Hung Vuong HCMC University in order to find strengths as well

as weaknesses, opportunities as well as threats of the university On that basis,

we will establish Hung Vuong HCMC University development strategy from

2011 to 2020

3 Method of the study

 Descriptive and analytical statistic method: collect and evaluate internal and external information of the university in connection with operations

of the university

 Forecast method: based on the past data, forecast the future demand

 Specialist method: interview leaders

4 Scope of the study

Scope of this study is to examine the real situation of operations of Hung Vuong HCMC University since 1995 and establish theoretical basis for business strategy of the university, focusing on analyzing basic factors affecting the establishment of business strategy From that, we establish development strategies and solutions to development strategy implementation of Hung Vuong HCMC from 2011 to 2020

5 Structure of the study

The study consists of 4 chapters, in addition to the introduction, conclusion and recommendation

Chapter 1: Literature review of strategy and strategic development university

Chapter 2: Introduction of HungVuong HCMC University

Chapter 3: Analysis of HungVuong HCMC University‟s activities

Chapter 4: Establishment of HungVuong HCMC University development strategy from 2011 to 2020

6 Scientific and practical significance of the study

 Scientific significance: In the market economy, business strategy is

decisive to the success and failure of an enterprise, business strategy plays an important role for all enterprises, not only a particular one Any enterprise desiring to exist and develop must firstly have a good and effective business strategy

There are many approaches to establish a business strategy for an enterprise Research topic has a scientific significance of generalizing existing theories from different sources to establish a business strategy development procedure for Hung Vuong HCMC University in a basic, easy to understand and use way

 Practical significance: Real situation of Hung Vuong HCMC University

is also general situation of all private universities in Vietnam at present Therefore, this study can also be applied for other private universities having the same features

CHAPTER 1 LITERATURE REVIEW FOR STRATEGY AND

STRATEGIC DEVELOPMENT UNIVERSITY

1.1 Concept and Role of business strategy

1.1.1 Concept of Strategy and Business strategy

According to Harvard business handbook, strategy is a military term originated from Greece and used to refer to the plan of disposing the troops in battle formation and allocating force in order to achieve goals in the war

Nowadays, the term strategy is used in many economic fields and understood as

“means to achieve long-term goals”

Business strategy is associated to economic field and interpreted in various ways Some popular definitions of business strategy are:

- According to Fred R David, strategy is means to achieve long-term

goals

- According to Alfred Chandler, strategy is to determine basic and

long-term goals and set up a process of action and distribution of necessary resources

to implement such goals

- According to Michael E.Porter, strategy is the creation valuable and

unique position, including different activities, the choice, the exchange in competition, the creation of appropriateness in all activities of the company

So, business strategy is a combination of goals and policies as well as major plans to achieve such goals It clearly shows what business activities the company has been implementing or what business field the company will be focus on

In general, definitions of business strategy, despite of basis differences, include following contents:

 Set up short-term and long-term goals of the organization;

 Propose and select solutions to achieve such goals;

 Develop and allocate resources to implement the goals

1.1.2 Role of Business Strategy

Nowadays, enterprises in particular and organizations in general pay special attention to developing strategy Strategy plays key role in directing and developing development plan of an organization Main effects of the strategy in

an organization are recognized as follows:

- Help enterprises to find clearly their purposes and directions It forces managers to review and determine which direction to follow and when to reach to certain position

- Force managers to analyze and anticipate conditions in near future as well

as for future environment

- Enterprises shall attach set up decisions to business environment conditions

- Help managers to use existing resources of enterprises effectively and allocate them reasonably

- Help managers to combine functions in organizations in the best way on the basis of achieving general goals of organizations

“Without a strategy, an organization is like a ship without a rudder, going around in circles It’s like a tramp; it has no place to go.” - Joel Ross and Michael Kami [10, pp 34]

1.2 Strategic planning process

Strategic planning process includes following stages:

- Strategic model study and choice;

Figure 1.1: Strategic Formulation Process

Source: Adapted from Fred R David, Strategic Management: Concepts and Cases

(Pearson Education International, Twelfth Edition) 37

1.2.1 Determination of vision, mission and goals of the industry, enterprise

“A business is not defined by its name, statutes, or articles of incorporation It is defined by the business mission Only a clear definition of the mission and purpose of the organization makes possible clear and realistic business objectives” - Peter Ducker [10, pp 80]

Goal is a concept used to refer to specific business outcome which an enterprise wishes to achieve

Short-term goal means specific and detailed outcomes in 1 year They are separate outcomes arising in the next decision cycle of an enterprise

Medium-term goal: means results to be achieved in 3 years

Long-term goal means goals showing desirable outcomes for a period of

at least 1 year Long-term goal is normally set up for following issues: Profitability, productivity, competitive position, personnel development, personnel relation, technical direction, social responsibility

1.2.2 Environmental analysis

Environment of an organization includes factors, forces, institutions, etc inside and outside the organization, affecting operations and operational outcomes of the organization

Developing a Mission,

a Vision, Goals

Choosing a particular strategy

Determining Internal Factors

Identifying

External Factors

Solutions to Strategic Implementation

Environment of an organization includes internal and external environment

Figure 1.2: Environment analysis model

Source: Adapted from Fred R David, Strategic Management: Concepts and Cases

(Pearson Education International, Twelfth Edition) 104, 106, 136

1.2.2.1 The external environment analysis

External environment of an organization is determined by 5 main factors: (1) economic factor, (2) cultural – social – natural – environmental factor, (3) political – legal – policy factor, (4) technical and technological factor and (5) competitor factor External factors are divided into two levels:

- Macro environment includes factors from macro management level affecting all business industries but not necessarily in a certain way Analysis of macro environment helps an enterprise realize what it is facing

- Micro environment (or specific environment) is determined for some particular industries; all enterprises of the industry are affected by micro environment of such industry

Micro environment includes all factors in the industry and external factors for the enterprises, deciding the quality and level of competition in such trading and manufacturing industry

“The opportunities and threats existing in any situation always exceed the recourses needed to exploit the opportunities or avoid the threats Thus, strategy

must allocate superior resources against a decisive opportunity.” - William Cohen [10, pp 102]

With the 5-forces model of competition of Michael Porter, external environment of an enterprise shall be analyzed in terms of such factors as Customer, Supplier, Current Competitor, Potential Competitor, Substitute product

Figure 1.3: Porter’s Five-Forces Model of Competition

Source: Fred R David, Strategic Management: Concepts and Cases

(Pearson Education International, Twelfth Edition) 118

Based on above analysis, we make the matrix of external factor evaluation (EFE) in order to determine the capacity to respond to environment of the enterprise

Table 1.1: External Factor Evaluation (EFE)

Key factors Weight Rating Weighted

Source: Fred R David, Strategic Management: Concepts and Cases (Pearson Education

International, Twelfth Edition) 126

1.2.2.2 Value chain analysis

The value chain is a systematic approach to examining the development

of competitive advantage It was created by Michael E Porter in his book, Competitive Advantage (1985) The chain consists of a series of activities that create and build value They culminate in the total value delivered by an organization The 'margin' depicted in the diagram is the same as added value The organization is split into 'primary activities' and 'support activities.'

Figure 1.4: Value chain

Source: Michael E Porter, Competitive Advantage, New York, Free Press, 1985

1.2.2.3 The internal environment analysis

Analysis of internal environment is to analyze all factors and internal system of an enterprise in order to determine strengths and weaknesses of an organization, on that basis propose measures to limit weaknesses and uphold strengths to achieve maximum advantage Main internal factors include such functional fields as: human resources, research and development, production, accounting and finance, marketing and general organization order and discipline

Based on above analysis, we make an internal factor evaluation matrix

Table 1.2: Internal Factor Evaluation (IFE)

Key factors Weight Rating Weighted

Source: Fred R David, Strategic Management: Concepts and Cases (Pearson Education

International, Twelfth Edition) 168

1.2.2.4 Competitive profile matrix (CPM)

Competitive profile matrix (CPM) identifies a firm‟s major competitors and its particular strength and weaknesses in relations to a sample firm‟s strategic position The weight and total weighted scores in both a CPM and an EFE matrix have the same meaning However, critical success factors in the CPM include both external and internal issues; therefore, the rating refers to the strength and weaknesses There are some important differences between EFE and CPM First

of all, the critical success factors in CPM are broader, they do not include specific and factual data, and they even may focus internal issues The critical success factors in CPM are not grouped into opportunities and threats as they are

Rating Score Rating Score Rating Score

The same EFE matrix

The same EFE matrix

Source: Fred R David, Strategic Management: Concepts and Cases (Pearson Education

International, Twelfth Edition) 127

1.2.3 Strategy Analysis and Choice

Strategy is defined as the match an organization make between its internal sources and skills and the opportunities and threats created by its external factors The matching stage of the strategy-formulation framework consists of 5 techniques that can be used at any sequence: the SWOT matrix, the SPACE matrix, the BCG matrix, the IE matrix and the Grand Strategy matrix

1.2.3.1 Locate strategies by Michael Porter’s 5 generic strategies

Michael Porter‟s 5 generic strategies allow organizations to gain competitive advantages based three different bases: cost leadership, differentiation and focus

Figure 1.5 : Michael Porter’s 5 generic strategies

Source: Adapted from Michael E.Porter, Competitive strategy: Techniques analyzing Industries and Competitors (New York: Free Press, 1980: 35-40)

Type 1: Cost Leadership – Low Cost Type 2: Cost Leadership – Best value Type 3: Differentiation

Type 4: Focus – Low Cost Type 5: Focus – Best value

1.2.3.2 Strategies in action by SWOT Matrix

Strengths-Weaknesses Opportunities-Threats Matrix is an important matching tool that helps the managers develop 4 types of strategies: strength-opportunities (SO) strategies, weakness-opportunities (WO) strategies, strength-

Table 1.4: SWOT Matrix

Key Internal Factor

Key External Factor

International, Twelfth Edition) 225

1.2.3.2 Determine strategy by SPACE Matrix

The Strategic Position and Action Evaluation matrix (SPACE matrix) represents 2 internal dimensions (financial strength and competitive advantages) and 2 external dimensions (environmental stability and industry strength) These

4 factors are the most important determinants of an organizational overall strategic position

Figure 1.6: SPACE Matrix

Source: H Rowe, R.WMason and K.Dickel, Strategic Management and Business Policy:

A Methodological Approach (Reading, Massachusetts: Addison – Wesley Publishing Co Inc,

FS

ES

IS

1 2 3 4 -4 -3 -2 -1

FS: Financial Strengths

ES: Enviroment Stability

CA: Competitive Advantage

IS: Industry Strengh

1.2.4 Strategy Implementation

Based on goals of the enterprise, internal and external situation of the enterprise, develop business strategy Business strategy includes following basis contents:

- Identify and choose opportunity to help the enterprise to achieve its business goal

- Choose target market of the enterprise, which helps the enterprise take best advantage of opportunity

- Choose type of services and products supplied for the target market

- Develop marketing strategy for the chosen market and strategy

1.2.5 Solutions to business strategy implementation

They are solutions in terms of human resources, financial sources, business management organization, production management, etc in order to implement set up business strategies In other words, it is the arrangement and allocation of resources of the enterprise to successfully implement chosen business strategies, for example:

- Suitable arrangement of enterprise organization structure

- Allocation of financial sources

- Establishment of a scientific and effective management model

1.3 Concept and features of private university

According to Regulation on private university issued by Prime Minister under Decision No 86/2000/QĐ-TTg dated18/7/2000, private university is defined as

“Higher education agency established by social organizations, social – vocational

organizations, economic organizations (hereafter referred to as organizations)

According to this Regulation, private university has following main features:

- Have the same legal position as public universities in national education

system; (according to Article 2)

- Subject to public administration in education of Ministry of Education and Training; subject to administration management in territory of Provincial People’s Committee, Cities directly under the Central Government (hereafter referred to as Provincial People’s Committee) where the university is located;

(according to Article 4)

- Self-control and self-responsible for the master plan, development plan of the university, organizing training, scientific and technological activities, finance,

international relation, organization and civil (according to Article 7)

- Charter capital is determined including charter in cash (Vietnam dong or free convertible foreign currency), gold or assets and no less than 15 billion

VND (according to Article 11)

1.4 Legal issues in connection with higher education

- Regulation on private university stipulating feature, form, organization structure, establishment conditions, operation mechanism of the private university;

- A set of 10 standards, 53 criteria for quality assessment stipulating standards for staff, material facilities, learners, from that recognize the university to meet national standards of not, at what level;

- Hung Vuong HCMC University regulation stipulating organization structure, management, operation, individual responsibility of HVU

1.5 Role of competitive strategy for university

Pursuant Regulation on private universities, private universities can

“self-control and take responsibility for the master plan, development plan of the university, organizing training, scientific and technological activities, finance, international relation, organization and personnel.” Therefore, strategic role and

strategic management in general is very importance, since it:

- Help the university to find its direction in the future to review and decide which direction and when to achieve a certain goal

- Help the university to see opportunity and threat in its operation at present and in the future, to analyze, evaluate and anticipate environmental conditions in the future, to take advantage of opportunities, to reduce threats and to overcome the competition to achieve success

- Strategic management process helps the university make suitable decision

to cope with each environment, to improve operational efficiency and to develop the university

CONCLUSION OF CHAPTER 1

Strategic role and strategic management in general are very important, developing strategy also takes time and effort; however, the university shall be compensated with more interests It is also mistaken to develop strategy hastenly, rigidly with turnover targets to be achieved

For education sector, strategy and strategic management help schools, especially universities and colleges to optimally meet demands of human resources for the society, to improve level, training capacity in the most difficult conditions as well as to guarantee the living standard of officers, lecturers and employees

In short-term, a good strategy shall help university and college do well

in training human resources for the society in order to best implement the goals

in education and training sector in the most difficult conditions in terms of funds

as well as help university to feel secure in self-controlling, making decision and taking responsibility in this transitional period

CHAPTER 2 INTRODUCTION TO OPERATION OF HUNG VUONG

HOCHIMINH CITY UNIVERSITY 2.1 Overview of Hung Vuong HCMC University

Traditional date: 9th March (Lunar)

Sector: Education and Training

Training levels: University – College – Professional School

Personnel: 150 officers - employees (excluding part-time lecturers) Number of students: 10,081

Head office: 342bis Nguyen Trong Tuyen, Ward 2, Tan Binh District,

HoChiMinh City Website: www.hungvuong.edu.vn

2.1.1 History and Development of Hung Vuong HCMC University

Implementing the policy of education socialization, diversification of training forms of the Party and Government under the Resolution of the 7th Party Central Committee on 14/01/1993, some intellectuals led by the late Profession, Medical master Ngo Gia Hy established a private university in Ho Chi Minh City On the 24th of May 1993, Prime Minister Vo Van Kiet signed the Decision

No 240/TTg promulgating regulations on private university However, through review, survey, social opinion investigation, it is found that opening “private” universities in our country is still new, so on 02/01/1994 Ministry of Education and Training promulgated the temporary Regulation No 196/TCCB on private university signed by Minister of Education and Training Professor Tran Hong Quan Due to such adjustment, some intellectuals proposed to establish Hung Vuong private university and Ministry of Education and Training made decision

on approval No 2395/QD-TCCB dated 03/11/1993

University name: HUNG VUONG HO CHI MINH CITY UNIVERSITY

Date of establishment: 14th August 1995

In the early days since its establishment, the university was named Hung Vuong private university Under the Decision No 122/2006/QD – TTg of Prime Minister permitting some universities to convert to private universities, including Hung Vuong private university Since 12/6/2008 the university was renamed Hung Vuong University (abbreviated as HVU)

2.1.2 Product features

Products of HVU are determined to provide training services, including:

- Training bachelors, engineers at university level with the training period of 4 years, regular training, vocational training, connection training programs;

- Training bachelors, engineers at university level of the second major with the training period of 2.5 years for the second training program;

- Training college bachelors with the training period of 3 years for regular training, connection training programs;

- Vocational training for pupils finishing high schools with the training period

of 2.5 years for regular training program;

- Providing short-term vocational training courses supplementing for those of

at least professional level;

- Providing skill training services such as English, Computing

2.1.3 Functions and duties

2.1.3.1 Functions of HVU

- Training personnel to have good political quality, ethics, knowledge and professional practice skills corresponding to training level, to have health and capacity suitable for working in the society, creating employment for themselves and others, to have capacity of equal cooperation in international relation, to meet demand for national construction and protection

- Carrying out scientific research and technological development, combining training and scientific research and production, scientific services and technology as stipulated by Laws on Science and Technology, Education Law and other regulations of laws

 To officers – lecturers – employees:

- Training experts of high scientific level to meet social demand, at the same time, maintain the humanity of the profession and uphold the quintessence

of Vietnam‟s culture

- Encouraging and creating conditions for members to carry out scientific research and to apply scientific achievements in teaching, studying contents and social reality On this basis, extending domestic as well as international cooperation;

- Implementing policies, regulations for members uncontradict with regulations of the Government; Paying attention to improving professional level as well as material and spiritual life of members

2.1.4 Organization structure of HVU

Figure 2.1 Organization diagram of HVU

Note:

Leadership function line

Coordination function line

Figure 2.2: Number and organization structure of HVU

PARTY

COMMITTEE

BOARD OF MANAGEMENT

- Science and Training Council

- Other member councils

- Assessment – Inspection – Conclusion council

- Politics

- Foreign Language Center

- Resource Training Center

SERVICE DIVISION (Services, student support…)

- Library

- Traditional medical association

- Sai Gon telecommunication technology institute

- Management quality institute

- Student support center

- ISO management board

- Information network management team

1 Managers

Figure 2.3: Number and qualification of

Managers and Lecturers of HVU

Figure 2.4: Number and qualification of Lecturers of HVU

(See Appendix 1, 2)

2.1.5 Salary policy

 For officers, managers

Income = Basic salary + Allowance – Teaching pay (if any)

- Basic salary: is paid according to qualification, senior

- Allowance: includes responsibility coefficient, teaching salary

According to data of Accounting Division in September 2010, average income of Manager is 10 million VND, of Vice Dean is 7.5 million VND, and of senior specialist of at least 5 years is 5.5 million dong

 For lecturers

Teaching salary = Teaching pay + Marking pay

Teaching pay = number of periods * pay rate * crowded class rate Marking pay = number of exams * norm

According to data of Accounting Division in September 2010, average income of Dean is 11.5 million VND, of Vice Dean is 9 million VND, and of lecturer is 6 million VND

In addition, the University also has other expenses:

- Expenses for holidays

- Expenses for founders, officers, lecturers, employees of the university

- Expenses for collaborators

- Expenses for political, union activities

In general, salary as well as income of officers, lecturers, employees of HVU is still low in comparison with average income of the society and not as high as that of other universities, so it is not attractive enough to attract and keep talented people Therefore, officers, lecturers and employees of HVU are lack in comparison with demand

Student scale of the university ranges between 3,000 and 4,000 students in one year College level is also extended from the academic year 1997-1998 For

3 years, 140 college bachelors major in Information Technology and Tourism have been trained At present, college level is being extended and connection to university level will be implemented Second certificate training is also implemented at some Faculties excluded from the assigned enrolment target

In general, enrolment target of the university has gradually increased over

14 years of operation Real enrolment decreased in 1998-1999 and 2004-2005

(see Appendix 3)

Figure 2.5: Target and real number of enrolment over years

In addition, the university should face and find measures to repair some weaknesses including the rate of drop, absence from school of about 40% which affects greatly to the funds of the university Causes of this problem include:

- Students subject to drop out of university as stipulated by Ministry due to poor study results;

- Students dropping out of university halfway;

- Students re-applying into other universities, changing their majors

Figure 2.6: Compare number of graduates with number of enrolment over years

2.2.1.2 Training form, profession and result

Training forms of the university are mainly regular programs At present, Ministry of Education and Training has assigned in-service training target for the university Some majors have short-term training courses upon the social request

TARGET

REAL ENROLMENT

ENROLMENT

GRADUTES

Training majors: in the early days since its establishment, there were 04 majors: Business Administration, Applied Mathematics, Information Technology, English; in 1996 more majors were added: Hospital Administration, Tourism, Japanese; in 2003 Post-harvest Technology major was opened At present, the university has 10 faculties namely Politics Department; Information Technology Department; Business Administration with such sub-majors as: foreign trade, marketing, production operation management; Hospital Management; Tourism; Post-harvest Technology; Foreign Language with such sub-majors as: English, French, Chinese, Japanese; in 2007 Finance and Banking Department was established; in 2008 Construction Engineering Technology Department was established; in 2009 Accounting – Auditing Department was established

However, number of training majors is low, training contents and methods are limited, material facilities and equipment for teaching are still poor, there are

no laboratory for students, no sites for practicum, sightseeing meeting training requirements

Table 2.1: Majors and Training levels of HVU

MAJOR Regular

university

Regular college

Vocational Second

certificate

Connec-tion

nal school Business

Source: Statistics of Training Bureau in September 2009

In general, training affairs of the university has good achievements Rate

of students finding jobs after graduation has gradually increased and highly appreciated by users Survey results of employment of graduated students from

2001 to 2004 are as follows:

 54% of students find jobs right after graduation

 96.2% of students find jobs 1 year after graduation

 96.8% of students find jobs by the time of the survey

2.2.2 Scientific research and international cooperation of the university

national level Number of officers, students carrying out scientific researches is limited, quality is not high This operation needs to be promoted in the future

2.2.2.2 International cooperation

HVU is studying to establish cooperative relations with many Canadian universities such as Moncton University, Quebec Montreal University, Sorbonne University, Belgian universities such as Louvain University, Belgium Freedom University, Public Health School of Louvain Medical University By now, the university has signed memorandum only, no specific agreements due to various reasons

International cooperation has a very important meaning in the current trend of globalization, so in the next strategy, the university is required to promote this activity more strongly

2.2.3 Material and technical facilities of the university

By now, operating agencies of the university are all rented, including:

- Agency at 736 Nguyen Trai, district 5;

- Agency at 239 Nguyen Trong Tuyen, Phu Nhuan district;

- Agency at 146 Vo Thi Sau, district 3;

- 342Bis Nguyen Trong Tuyen, Tan Binh district;

- 59 Che Lan Vien, Tan Phu district

Since HVU has not had its own agency so it has not equipped modern technical equipment to serve teaching and studying, scientific research, except computer rooms for Information Technology Department

Ho Chi Minh City People‟s Committee has decided to permit the university to use an area of 25.5 ha in Tan Kien commune, Binh Chanh district to build a new agency This is an important premise for HVU to basically settle its material facilities for HVU development strategy in the future

Table 2.2: Floor area and number of classrooms

No MATERIAL FACILITIES TOTAL AREA (ha) Remarks

28,194ha, of which

26, 205 ha is planned by Ho Chi Minh City People‟s Committee for building a university

in Tan Kien commune, Binh Chinh district; the rest is rented land with the period of use of 6 to 20 years

2 Construction area (24,305m2) Number of

c Classroom for foreign language,

music, arts, sports

f Public work area (canteen,

medical center, offices,

departments)

district for 100 Laos students

Total 159 15,013

Source: Statistics of Equipment Management Bureau in November 2009

Table 2.3: Number of equipments and computers

No COMPUTING CAPACITY Quantity Remarks

1 Total number of computers 581 Of 450 computers used for

training, 62 computers are installed in lecture halls, classrooms (no Internet connection); 388 computers are installed in 9 computer rooms and 131 computers used for management are connected to Internet

3 Number of computers having email

portal according to email address of

the university

131

Source: Statistics of Equipment Management Bureau in November 2009

At present, the university has a basic advantage that it has invited Saigon Invest Group to be the main investor holding more than half of shares to invest in the university with the policy of no self-interest as proposed by founders of the university and it has coordinated with the university to established University Development Investment Joint Stock Company City Committee of the Party Office is doing the procedure of leasing the land at 736 Nguyen Trai for 20 years

to build the head office of the university

2.2.4 Finance

Table 2.4: Income Statement of HVU in 2008, 2009

Net revenue 30,998,183,300 42,480,743,031 11,482,559,731 Gross revenue 12,200,000,840 12,740,502,965 540,502,125

Source: Accounting Bureau on 31 December 2009

According to above turnover table, it can be seen that turnover in 2009 increased by 37% in comparison with in 2008, equivalent to the target which HVU is permitted to increase in 2009 However, in 2009 profit of HVU decreased to negative figure Reason for this loss is that HVU invested in equipment, purchased management procedure, increased salary in order to improve operational capacity, to prepare for the following years

CONCLUSION OF CHAPTER 2

HVU is a university with its main product is to provide training service

At present, this is a suitable product of high demand In order to improve

competitive capacity, HVU is necessary to establish a development strategy, including short-term and long-term goals

In recent years, demand for higher education of the citizens has increased remarkably, including for localities paid little attention to study before such as Southwestern provinces This is the most advantageous factor for Vietnamese universities in general and HVU in particular

Regarding operation capacity, including staff, program, management mechanism, income policy, etc., HVU is potential and has achieved remarkable success In order to improve competitive capacity, HVU needs to have suitable strategy to improve its operational capacity in order to increase income, to create its position in the society

CHAPTER 3 ANALYSIS OF HUNG VUONG HOCHIMINH CITY

UNIVERSITY’S ACTIVITIES

3.1 Determination of value chain

Figure 3.1: Value Chain of HVU

Source: Michael E Porter, Competitive Advantage, New York, Free Press, 1985

3.2 Analysis of external environment

3.2.1 Analysis of macro environment

3.2.1.1 Political and Legal factors

Constitution of the Government states: “Education is national policy” It

confirms the role of education in general development of the country Clearly aware of the significance of education, the Government continues to implement

improve income

- Excellent lecturers

Outbound Logistics

- introduction to fresh-

graduates

- Support to seek jobs for student

Marketing

- Video clip, exhibition

- Hold event

- Hold contest for students

Services

- Take care of students

- Help students in study and life

- Scholarship

- Recommend part-time work

increasing expenditure for key tasks of the sector such as renovation of program, training of teachers, and improvement of mountainous education ODA projects

in education and training mainly for basic education, education and training sector reached and exceeded basis targets which Education development strategy set up for 2005 Schools in Vietnam have been making effort to meet national standards in terms of infrastructure to guarantee high quality teaching and studying equivalent to other countries in the region However, these preferential policies only focus on public universities, but private universities Besides, approval and issue of targets for each university like present of Ministry of Education and Training causes many obstacles for operation and self-control of universities, hinders universities from improving operational quality It is due to restricted enrolment target which limits income of the university, and affects investment plans of the university

According to General treaty of service trade under WTO, education and training is seen as a form of general service trade Education must operate in 4 forms as stipulated in the General treaty of service trade: inter-border provision, services are provided from this member country to another member country; consumption outside territory; trade presentation, service suppliers of a member country establish forms of presentation like 100% foreign owned company, joint venture company, etc Severe competition between domestic universities and foreign education organizations operating in Vietnam is indispensable This will create conditions for learners to have lots of choices at the same time put universities and education organizations in the position of self-renovation to compete and develop

Along with urgent demands for human resources to serve the development, higher education has never been paid attention like at present According to the master plan of universities of Ministry of Education and Training, each local area will have a university When local universities are established, universities in the city will have difficulty since such universities attract a greater number of students in localities

3.2.1.2 Economical factors

 GDP and average income per capital

GDP of our country has steadily and relatively high growth rate Part of GDP is invested in education Average income per capital has increased over years Increase in average income per capital means capacity of expenditure on education of the citizens is also increased

Figure 3.2: GDP growth rate of Vietnam over years

(Source: World Bank in October, 2009)

 Inflation

Since 2007, inflation has great impact on socio-economic life in our country Inflation cause price of goods serving training such as books, studying tools, tuitions to increase high, which causes difficulty for large number of citizens

Figure 3.3: Average income per capita of Vietnam over years

(Source: World Bank in October, 2009)

Economic development is partly resulted from investment in education Vice versa, education should also be mobilized and renovated to meet the