building business strategy of transport engineering and development investment joint stock company no 208 the period 2012 2017

Analyzing, impact assessment of the factors that influence from the external environment as well as internal factors of the TEDICO 208 which proposes to develop solutions to improve comp

CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM

Độc lập - Tự do - Hạnh phúc

ROR OR RR RK

XAC NHAN SU DUNG THONG TIN CONG TY TEDICO 208

Kính gửi Chương trình Đào tạo Thạc sĩ Quản trị Kinh doanh quốc tế

(GaMBA) liên kết giữa Trung tâm Công nghệ Đào tạo và Hệ

thống Việc làm (ETC) - Đại học Quốc gia Hà Nội và Đại học

Griggs — Đại học Andrews (Hoa Kỳ)

Công ty Cổ phần Đầu tr Phát triển và Xây dựng Giao thông 208

(TEDICO 208) trực thuộc Tổng Công ty Xây dựng công trình Giao thông 4

(CIENCO 4), xác nhận các ông/bà có tên sau:

1 Trinh Thi Ngoc Bau

Dang Xuan Dat

Công ty TEDICO 208 đồng ý để các ông/bà có tên nêu trên sử dụng

thông tin, số liệu của Công ty trong nội dung đề tài tốt nghiệp và chỉ được phép

sử dụng những thông tin này cho mục đích nghiên cứu, học tập

CONTENT

LIST OF SYMBOL AND ABBREVIATIOONG scsssssccssosssssscssescsssssssccssessseseceseses 4 INTRODUCTION tmmiiccminmnmnincmionimnnmiianiaciietinanimatiiéie 5

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Page 3 of 70

LIST OF SYMBOL AND ABBREVIATIONS

TEDICO 208: Transport Engineering and Development Investmetn Joint Stock

Company No 208

INTRODUCTION

Le Background, the need and meating of topics

Currently the economy with the trend of globalization and integration, the vast

majority of businesses around the world are considered the business strategy as the first task Large business owner’s use to 40% of the time to study business strategy Developing business strategies demand the continuing innovation of enterprises

Vietnam now also participate in and integrate deeply with the world economy, in 2009

Vietnam joined the World Trade Organization - WTO Vietnamese businesses will

access tO, Open up opportunities and new challenges The element of luck in the business will decrease; businesses want to survive, grow and to be profitable on average

to innovate constantly for constantly changing society, technical progress continuously, and people constantly change in business In this context, a fixed business career for a

long time is not possible Technical progress and improved living standards is to promote the formation of many new services Many people who worked in state, now separated and become the independent business competitors of the old business In that situation, if the business is stagnant, will be eliminated Therefore, enterprises must constantly innovate, they must have a strategy Whether the innovation is in the field of business or technology, services, processing production, production management,

marketing they all need to have a strategy, based on the direction of strategy

Since establishment, association, merger of enterprises need with the strategic direction of the business As the owner, manager, operator businesses, we have to decide the future of the business, not to lose business position in the market or the market to fall into the hands of competitors Therefore the research, business strategy

for the company is extremely important, it is a key determinant of the success or failure

and survival of the business

Be Study objectives

Using the knowledge in MBA program, our group explores and analyzes the shortcomings in TEDICO 208 and building business strategy for the company in the

Page 5 of 70

next period (2012-2017) Thereby, enhancing the practical knowledge of the group

members on strategic management in the current environment

Analyzing, impact assessment of the factors that influence from the external environment as well as internal factors of the TEDICO 208 which proposes to develop

solutions to improve competitive position and promote business performance for the

company in the period 2012-2017

Comparison analysis method, synthesis, analysis of data from financial statements

comparable from year to year, aggregating to comment

SWOT analysis matrix method: a technique to analyze and process the results of environmental studies, helping enterprises to build business strategies scientifically,

practical and effective

Statistical methods: statistical charts, to draw conclusions from trends to evaluate

the performance of the company and the industry

Consists of five parts:

- Introduction

- Chapter 1: General theoretical basis of business strategy

- Chapter 2: Situational business analysis

- Chapter 3: Strategic Plan and implement solutions

- Conclusion

CHAPTER I: GENERAL THEORETICAL BASIS OF

BUSINESS STRATEGY

Administrators have to access many different ways for understanding the business

strategy, as some of the following concepts

- Strategy is the determination of the basic long-term objectives of the business,

choose the way or course of action and the allocation of resources necessary to implement those objectives (Alfred Chandler)

- Strategic Management can be defined as an art and science to set, implement and

evaluate decisions related functionality allows an organization to achieve the objectives (According to Fred R David)

- A long-term strategy, direction and management to ensure the completion of

long-term objectives, the main purpose of the company (according to Rudolf Grunig

and Richard Kuhn)

Shortly, the business strategy is understood in a general way: A complex operation

in order to mobilize all the resources an organization / individual may have in order to achieve a certain purpose

1.2.1 Company Strategy

Company wants to grow and develop; they need to have their own development

strategy, even if it's not formal, structured and irregular, is called company strategy Administrators based on the characteristics of the company and the business that build their own advantages Developing strategies based on internal analysis, identifying strengths and weaknesses in order to identify and define the goals,

objectives, identify the business which the company pursued, thereby creating the basic

policies and plans for achieving the goals of the company

The almost company strategies are built on the basis of promoting their competitive advantages

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1.2.2 Business-Unit strategy (SBU)

Business strategy is formulated, implemented and evaluated with the assumption that competition by exploiting their core competencies in specific product or market for

the company's business activities

Strategy is oriented to develop each sector or category of products contributes to the company strategy

1.2.3 Functional level strategy

Functional level strategy consists of parts which are marketing, human resources, research and development, etc These parts have a strategy to support the implementation of business-level strategy and strategic level company

Strategy often performs valuable functions in each stage of the process of implementing business-level strategy and corporate level strategy

1.3 Procession of building business strategies

1.3.1 The external environment analysis

The external environment is a system of complex factors, there are many opportunities and risks affecting the operation of the business in different levels

The external environment analyses identify the opportunities enabling environment that may be beneficial for the company, and to avoid environmental threats to the company

External environment including: general environment and industry environment

1.3.2 General Environment (PEST)

P olitical Factors

đ Factors

S ociocultural Factors

nological Factors

Page 8 of 70

PEST model focusing on the elements of the external environment impacting on the business The factors are:

Political environment, including the point system, the government's policy line, the

current legal system, diplomatic and political situation in the country, on the region and the world Political environment, law influence on the formation, operation and

development of the company For the industry and the companies have to depend on contracts or subsidies government The political forecasts can be the most important

part of the examination of external factors Changing the law such as: patents, antitrust,

can Cause great impact on the company When trading on an administrative unit, the company will be required to comply with the institutional elements of the law in that area

+ The stabilization: We will consider the stability of the factors of political conflict, foreign legal institutions

+ Tax Policy: Tax Policy for export, import, sales tax, income tax will affect the revenue and profits of the company

+ Relevant laws: the Law on Investment, business law, labor law, antitrust law,

meet production the company's production So economic factors have a direct impact

on business strategy, particularly important are the following factors:

- Economic growth

- Interest

- The exchange rate

- The rate of inflation

Economic environment has a direct impact with the potential to attract different strategies

Usually the business will be based on economic factors to the decision to invest in

sectors and regions

+ The state of the economy: Any economy has cycles, given at each stage of the economic cycle, businesses will have their own appropriate decisions

development strategy of the government, the preferential policies for the industry: Tax

breaks, subsidies

+ Future economic prospects: growth rate, the increase in GDP, the ratio of GDP

per capital

The socio-cultural environment including standards and values that are accepted and respected by a society or a culture

The socio-cultural changes have a significant impact on almost all products and services, and consumer markets Shortly, the business is affected by the socio-cultural factors Therefore, enterprises need to study and learn about each feature this culture to

go into business to suit the needs of each region or area

environment, because this environment there are always changes, major technical improvements and inventions profound impact on products, services, schools, suppliers, competitive position, of the enterprise Technical progress can create new

markets for existing products and services obsolete, can create new competitive

advantage as new technology can make short production time more, change the value

to meet the wishes of the management of the customer Therefore, the technology environment may be the most important part of the control of external factors in strategic management activities

1.3.3 Environment Sector

Environment sector is directly related to the business activity by sector, each

sector, from which the operation and competitiveness of enterprises have happened

here

Michael E.Porter (born 1947) is a professor at Harvard University, the United

States, he gave 5 competitive forces model (1985) to help administrators analyze the micro-environment strategy, the opportunities and threats from the environment

Applying the 5 competitive forces model of Michael E Porter (1985) to analyze

the business environment of the enterprises

A variety of direct factors affect a company and the competitive actions and

competitive responses of the company, such as:

- The threat from the new company

- The power of suppliers

- The power of buyers

- The threat from substitutes

- The intensity of competition in the industry

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5 competitive forces model of Michael E Porter

- Competitors: In any business activities also need to understand "Know people who know me, hundred battles hundred win" Businesses need to identify who are your competitors, the product / service they are Since then businesses need to analyze their competitors

Business enterprises in the industry will directly compete with each other to create back pressure on the industry to create a competitive strength In the a sector following factors will increase competitive pressure on rivals

+ Bad sectors: demand, growth, number of competitors

+ The structure of the industry: industry concentration or dispersion

- The distribution sector is a lot of businesses compete with each other, but no business can afford dominated the remaining businesses

- Sector focus: only one or a few companies hold a dominant role (competitive

control-can be considered authoritative

Competitor analysis is the process of evaluating the weaknesses and strengths of current and potential competitors To configure the competitors, needing to gather all

sources of information analysis on competitors such as the number, capacity, their

orientation on business From here to help businesses make the offensive and defensive strategy, through which they can identify opportunities and challenge

- The potential opponent: According to M-Porter, potential competitors are not

currently present in businesses but they can affect the industry in the future Potential competitors are more or less, the strong or weak industry will depend on the

attractiveness of the industry factors, barriers to entry

+ Attractiveness of the sector: This factor is expressed through indicators such as rates of return, the number of customers, the number of firms in the industry + Barriers to entry: are the factors that make the industry entered a more difficult and costly

1 Technical

2 Capital

3 Commercial factors: distribution system, brand, customer system

4 Specific resources: Raw material input (controlled), Degree,

patents, human resources, the protection of the government

- Customers: Customers is a competitive pressure that can directly affect the entire

production and business activities of the enterprise sector Customers often pressure on prices, quality products and services for businesses through the purchase decision The

purpose of the business to customers is how to get the trust of customers, so that the

enterprise needs to satisfy the demands and meet the tastes of customers The trust of

our customers is the most valuable asset for businesses

Customers will increase power up if:

+ The number of buying people is small and they are large customers

+ Client consumes most of the products of an industry

+ Customers holding large proportion of the annual revenue of the seller

+ Cost of switching to other products is low

+ Customers have the ability to penetrate back to the branches of the seller

+ Customers have all information

- Supplier: Suppliers hold importance because they can directly go into the enterprise At the same time, the number of suppliers to influence the competitive

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pressure, their negotiating power for industry, business If only a few large-scale suppliers will create competitive pressure on the market, affecting the entire production and business activities of enterprises Enterprises need to capture the information of suppliers, because the information is always a factor to promote the development of trade, information providers have a major influence on the selection of suppliers for

businesses

Power of suppliers can be represented by the price increase or decrease the quality

of products and services provided Dominant supplier to have the following conditions: the number of suppliers in the number of people buy more than one industry, product, goods or service provider is found essential

- The substitutes: Alternative products and services can satisfy the needs of equivalent products and services in the industry Replacement product industries more

competitive threats from larger, limit the ability to achieve high rates and this also affects profitability

Substitutes have increased the threat when:

+ Buyer does not pay the high cost of switching products

+ The price of alternative products below

+ Quality and effectiveness of the product is better than alternative products currently

These products can not be alternative products that would be less affected by this

threat

The strength of the five competitive forces can change over time as industry conditions change Businesses need to identify opportunities and challenges due to the

change of force to bring, to build business strategies accordingly

1.3.4 The internal environment analysis

All businesses have their strengths and weaknesses in the areas of business The internal environment analysis is the basis to help businesses that realize to help

managers make business strategy to take advantage of the strengths and find ways to

overcome the weaknesses of internal business career

Strategic management requires a coordinated process, an effective collaboration between departments and business functions such as: human resources, finance, marketing, operations management, information systems

HR activities play a very important role in the process of implementation of the

strategy, influence the success or failure of the business Managers are increasingly

aware of the impact of human resources for strategic management activities effectively Function of human activity: human or human resource management, inciude: management salaries, bonuses, benefits, recruitment, training and _ re-training, arranging, laying off workers, developing professional and human studies, policies and regulations on labor discipline, strike, strike,

1.3.4.2 Finance

The business strategy want to achieve effective, businesses need to identify

strengths, weaknesses in the financial sector Solvency, the balance of debt, working capital, profits, use of capital, cash flow of the business have a great influence on the planning and implementation strategies Financial factors function include: investment

decisions, financial decisions and dividend decisions

market and market positioning The marketing administrator will determine the specific

tasks of this function; the job should be done in each period

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organizing, promoting and control are based on good planning

- Organization: the goal is to achieve the cooperative efforts by identifying the relationship between the tasks and powers Administrative functions of the organization including:

+ Change the tasks set out the work that needs done

+ Combining the formation of departments

+ Empowerment

- Promote: the process of their influence others to achieve individual goals The staff and administrators do not be motivated to perform the strategy was launched Promoting function including: leadership, group dynamics, communication and organizational change

- Control: operational management, control functions including all work to ensure that

activities take place in fact consistent with the plan offered Control consists of four basic stages:

+ Establish performance standards

+ Assessing the achievements of organizations and individuals

+ Comparison of actual results with the individuals specified performance

The purpose of the information system improves the activities in a company by

improving the quality of management decisions

1.4 Tools for strategic planning and selection

1.4.1 Tools for strategic planning

14.1.1 Competitive Profile Matrix (CPM)

Competitive profile matrix (CPM) identifies the main competitors of a company and its particular strengths and weaknesses related to the strategic position of a

company Weight and total scores in both a CPM and EFE have the same meaning However, the critical success factors in a CPM include both internal and external problems, so the ratings refer to strengths and weaknesses, 4 = major strength, 3 =

minor strength, 2 small = weak, and | = serious weaknesses The critical success

factors in a CPM are not grouped into opportunities and threats when they are in an EFE In a CPM, ranked and weight total score tor the rival company can be compared

to the sample companies Comparative analysis provides important strategic internal commiunication

1.4.1.2 Matrix evaluation of internal factors (IFE)

Matrix evaluation of internal factors (IFE) is a tool to examine the response

capabilities and is used to summarize and assess the strengths and weaknesses of the business unit functions [FE matrix developed in five steps

- Step 1: List of 10 to 20 elements inside, including the strengths and weaknesses that affect the business objectives set

- Step 2: Classification of importance from 0.0 (not important) to 1.0 (most important) to each factor Depend on the degree of importance of these factors affect the success of your business Total of all this critical level of 1.0

- Step 3: Determine the weights for each element according to claims | to 4,

where: 4 is very strong points, 3 points is pretty strong, 2 points is pretty weak, | is the

- President of the matrix is lower than 2.5 shows that the company internal weak

- President of the matrix is higher than 2.5 showed strong internal company

1.4.1.3 Evaluate the matrix external Factors (EFE)

Evaluate the matrix external Factors allows aggregate, summarize, and evaluate the

Page 17 of 70

opportunities and difficulties mainly from outside can affect the production and

business of the enterprise Development EFE consists of five steps:

- Step 1: Make a list of 10 to 20 elements including the opportunities and

difficulties affecting the success of the business and the business of the enterprise

- Step 2: Classification of importance from 0.0 (not important) to 1.0 (very important) for each element Respective importance of factors depending on the degree

of impact on the success of the company's business Total classification level assigned

to the factors must equai 1.0

- Step 3: Determine the weight from | to 4 for each factor, the weight of each factor depends on the response of each business for each element, of which 4 is a good response, 3 a reaction on average, 2 is the average response and reaction | is less

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

element

- Step 5: Add the total number of elements to determine the score of the matrix Total number of independent matrix elements in the matrix, the highest total score

is 4.0 and the lowest was 1.0 The average total number of critical points is 2.5

With a total score of 4.0, enterprises are responding very well to the opportunities and difficulties

With a total score of 2.5, now is the normal response to the opportunities and

difficulties

With a total score of 1.0, enterprises are responding poorly to the opportunities and difficulties

SWOT can look at all the opportunities that businesses can take advantage of and

by understanding the weaknesses and strengths of the business, can manage and

eliminate risks that are not aware So, the SWOT matrix is an important tool

combination helps managers develop four types of strategies:

- Weaknesses

- Opportunities strategy (WO)

- Strengths

- Threat strategy (ST)

- Weakness - Threat strategy (WT)

- Strengths — Opportunity strategy (SO)

To make a SWOT matrix, administrators must go through eight steps:

- Step 1: List the major strengths within the company

- Step 2: List the weaknesses within the company

- Step 3: List the major opportunities outside the company

- Step 4: List the threats outside the company

- Step 5: Combine inner strengths with external opportunities and record the results

of the SO strategy in the appropriate box

- Step 6: Combine the inner weaknesses with external opportunities and record the

results of WO strategies appropriate box

- Step 7: Combined inner strengths with external threats and record the results of the ST strategy in the appropriate box

- Step 8: Combine inner weaknesses with external threats and record the results of the strategy WT appropriate box

1.4.2 Optimal strategy selection tool

QSPM Matrix

We may also use the strategic planning matrix to quantify (QSPM)

QSPM matrix uses the input information from the IFE matrix and EFE matrix and

SWOT matrix QSPM Matrix is developed in six steps:

- Step 1: List the opportunities and threats within and the opportunities and threats

outside the enterprise The information is taken directly from the IFE matrix and EFE

matrix

- Step 2: Classify each critical success factors inside and outside

- Step 3: Determine the strategy can replace that businesses should consider

implementing

- Step 4: Determine the number of attractions of each strategy (AS) Score represents the relative attractiveness of each strategy compared to other strategies

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Only the new strategy in the same group was compared with each other Some

attractions are classified: 1 = unattractive, 2 = somewhat attractive, 3 = quite attractive

and 4 = very attractive If these critical success factors have no influence on the choice

of strategy is not graded attractive strategy in this strategic group

- Step 5: Calculate the total number of points of interest (TAS) Total number of

attractions as a result of the classification score (step 2) with attractions (step 4) in each

row

- Step 6: Calculate the sum of the total number of attractions It is the sum of the total number of attractions column matrix QSPM strategy The higher numbers of attractions indicate more attractive strategies

CHAPTER IT: COMPANY SITUATION ANALYSIS

- Construction of civil and industrial works

- Construction of roads, bridges, culverts, dams, embankments, canals, irrigation

sector, the construction of public lighting, green parks, urban pavements

- Testing of construction materials and quality control traffic works

Page 21 of 70

- Survey and design works to build bridges

- Dredging, leveling

- Manufacturing and trading of building materials Etc

In particular, the key areas is to build transport infrastructure

2.1.3 The process of formation and development

TEDICO 208 today formerly known as the Hanoi highway management with the task of ensuring marine traffic at the gateway to the capital Established on 9-12-1970

On 2-4-1983 renamed central traffic fix factory 208 The main task is the construction

of bridges, maintenance, intermediate bridges overhaul the supply lines are assigned to

the management company

On 10-7-1989 was renamed: Enterprise road management 208

On 25-12-1991 renamed: Division road management 208

On 2-6-1992 renamed: Company overhauled the 208 traffic At this stage the

company has separated the maintenance management into land management zones 234

Companies whose main function is to build bridges

On 8-11-1994 renamed: Company works 208 traffic

On 13-5-1995 Tedico 208 are separated switch the status under the Vietnam Road Administration attached to this central construction company is Cienco 4

On 6-4-2006 after equitization was named: Corporation build traffic Cienco 208

On 17-5-2007 renamed: TRANSPORT ENGINEERING AND DEVELOPMENT INVESTMENT JOINT STOCK COMPANY NO 208 (TEDICO 208)

For more than 40 years of development and growth Over time split, merge, convert and operating model name, TEDICO 208 is company operated as a joint stock

company with a capital of 20 billion VND, in which the State holds 37% With many areas of business license, but the focus is primarily on key transport infrastructure

products Companies participated in the bidding and construction involved several mass works, great value and investors appreciate

Especially at highway works Cau Gie - Ninh Binh is a government program designed to add a layer of anti-slip polymer asphalt concrete pavement friction

increases, the Ministry of Transport has directed applied outside Novachip of Cienco

1, Ministry has assigned Cienco 4 which is TEDICO 208 Asphalt manufacturing and construction polymers create rough standard Asto Works by investors, consultants and experts appreciate

Page 23 of 70

2.1.4 Vision

As a developing country, transport infrastructure need to take a step forward

recommendations Resolution No 13-NQ/TW on 16/01/2012 on "Building synchronous infrastructure system in order to make our country basically become modern industrialized country by 2020 " Since then, along with the actual traffic of Vietnam at

present we see the market construction of transport infrastructure is extensive Although this is to implement the Government's Resolution XI, some work was stopped rescheduling the cause difficulties for transport infrastructure construction business But with Resolution 13, along with a social plan the construction of

transportation infrastructure to take advantage of capital and material resources in the

Government's country TEDICO 208 will complete a number of good not to be ready

to adapt and grow

- Perfect sense to model regulations for the operation of the entire company moved from management to enterprise administrators to proactively in all aspects

- Strengthen human solid as well as equipment for the line construction technology

base, foundation, road surface and improve stability line bridge construction technology

- Continue to follow and complete construction technology class create roughness

(anti-slip) for the highway

- Exposure, research, technology investment construction of cement concrete road

surface localization oriented materials, make use of water resources in accordance with

the Government's policy

2.1.5 Mission

Mission of TEDICO 208 is giving better quality to all members of the company, contributed to the community and society by the product quality transport

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infrastructure and design art that requires Make sure that Tedico 208 develops

sustainably

2.2 Apparatus, organizational structure

Organizational structure chart of TRANSPORT ENGINEERING AND DEVELOPMENT INVESTMENT JOINT STOCK COMPANY NO 208

Accouting- Business Technolo LAP Equipment Organization

Finance DEPT DEPT gy DEPT DEPT - Administration

* The Board: include of 5 people

President: Mr Trinh Van Tuan

- Vice-President: Mr Nguyen Manh Hung

- Member: Mr Van Luong, Mr Vu Ngoc Hieu and Mrs Vu Thi Hau

* Supervisory Board: include 3 people

- Chairman: Mr Vu Hoang Long

- Member: Mr Dang Trong Son and Truong Thi Nhung

* The Board of Directors: includes 4 people

- Director: Mr Nguyen Manh Hung is the legal representative and general guidance

- Deputy Director:

+ Mr Le Duc Dat in charge of internal affairs,

$ Mr Van Luong in charge of business, supplies and equipment,

* Departments, the construction team:

- The construction team: No 1, 2, 3, 5, 6, 7, 8, and 9

TEDICO 208 is joint-stock company shareholder is the State, operating under the charter of the Joint Stock Company

Shareholders Meeting is the highest organization of the company At this congress

elected board and supervisory board Board elected president and vice president

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Chairman of the Board of Directors appointed Executive Director, Director of the board of the deputy director and chief accountant to the Board of Directors adopted and

the Chairman of the Board to sign the official appointment Directors appointed the head / the function and the production team captain

Director of the company is active organizations operating business of the Company

and responsibie to the Board and the law

In the construction and installation activities of the contracting company for manufacturing and construction teams work directly through the company's board contracted under contracting regulations and consumption of raw materials of that particular process Production team actively organizing production, depending on the size of the organization under the management and supervision of quality, schedule, safety and labor supplies, corporate finance

For large-scale projects, there may be more teams with construction or production company established direct executive organization progress

2.4 Business situation

¢ Current status of company business

After equitization in 2006, TEDICO 208 put into operation according to the stock model is gradually stabilizing the financial system organizations gradually regain and rebuild the brand in the market to build transportation infrastructure business The Company focuses on key areas as road and bridge construction products, selling

products for road construction

From 2011, due to the operating policies of the Government, a series of works of the bidding company, is in progress stop or to prolong their progress due to lack of funds The affected projects, such as: highway 6 week educational package 12,

National Highway 4 Ha Giang pack 4, National Highway 3 North land package 16,

Hanoi Lao Cai package 7, 8 pack The total value of these projects of TEDICO 208 up

to approximately 35 billion, so a very large impact on the administration of the Company's business and profitable results in 2011 and 2012

* Production and business results

Production and business results of the Company over the three years 2009, 2010,

2011 are shown in the following indicators:

Report 2007 of the World Bank, the annual investment in the infrastructure of the

country accounts for 9-10% of GDP, however, the development of infrastructure does not meet the requirements of economic and social development According to the

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World Bank, Vietnam needs to increase investment in infrastructure to 10-11% of GDP The investment in promoting infrastructure development will be a factor promoting the development of the construction industry, especially in the field of construction of bridges, roads and ports

Table 2.4.1: Vietnam GDP forecast for the construction industry at current

prices (billion VND)

215 018 182.723

152 808

1214273

101 606 T961”

R i i

2006 2007 2008 2000F 2010F 2001F 2012F

Source: General Statistics Office, BMI, BVSC After 20 years of economic reform in Vietnam in the years before 2009 have continuous growth of over 7% But after 2009, Vietnam's economy was facing huge challenges due to the influence of the world financial crisis High inflation, rising

prices and the abnormal fluctuations of petroleum, steel, cement, raw materials,

causing difficulties for the economy Add to that the tight monetary policy of the Government has made funding provided to the economy is limited The entire banking system liquidity problems, raising capital as well as investment credit

While the country has joined the World Trade Organization, but the

competitiveness of the economy, the industry and the product is low

With the investment policy tightening by the Government in 2011, a series of

construction projects, traffic works are stopped or stretch the progress made to

influence business results of construction enterprises transport infrastructure including

TEDICO 208

As a business with the key areas involved in the development of transport infrastructure Economic environment of the country very large images to production and business activities and development of the Company

* The politicai environment law

Vietnam is a developing country, the iegal system is still in the completion stage Therefore the missing legal documents, overlapping and not really clear So the ability

to change the provisions of the law is inevitable happens

For the construction sector, the government has allowed the construction of several draft laws and bylaws in order to contribute to the development of the industry These are the decrees, circulars

The legal system of Vietnam is still some limitations and there are certain loopholes Therefore, inefficient law enforcement often with spleen law should not create a healthy environment for the economic development including the field of transportation infrastructure construction

Summary: The change of the legal system can do to change and adjust business operations of the Company's general and industry in particular, affect the business results and profits of the shareholders

* The socio-cultural environment

Vietnam after growing integration but the country's transportation infrastructure is still weak Transactions between the regions are fast growing Therefore require upgrading and new investment projects Traffic to serve the needs of travel and trade of people and society as a whole is increasing So, here is an opportunity for businesses in

the field of transportation infrastructure construction including TEDICO 208

* Technology Environment

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Current technology of road and bridge construction industry in Vietnam in general end of TEDICO 208 in particular there is a big gap, not to catch up with the advanced technology of the world Therefore, investment in advanced technology, modern

tzchnology gradually replaced the serving business is essential But the financial capacity of the business sector in general is weak, and depreciation related to capital

recovery But in order to increase competitiveness, this 1s a great difficulty for corporate governance in the horizontal transport infrastructure in general

¢ Natural Environment

Environment can affect the formulation, namely: climate change, climate, rainfall,

‘loods, and raw material inputs Has and will always affect the progress and quality

of construction of transport infrastructure Therefore, construction companies need to ensure progress and prestige of the investors and the need to anticipate the risks of the natural environment to the appropriate countermeasures

Due to the production of construction and installation should be conducted outdoor

production is directly influenced by the terrain conditions, geology, meteorology,

tydrology, at the construction site At the same time in the production process, also

(ausing a negative impact on the environment, this will affect the cost of construction end production efficiency, reputation and corporate responsibility society

2.4.2 Micro-environment analysis

Tedico 208 with products and services characterized by building bridges and roads,

should the measurement of total products produced based on the test results of the

project in time made monthly, quarterly, annually Volume calculated for each work

tem is divided into several stages

2.4.2.1 Stress level of internal competition in industry

Featuring the industry is to take the "market" by participating in the bidding rrocess that the investor is represented by the State, or local investment to upgrade,

‘enovate and renew the social work Assembly Therefore, the competitiveness of