Building strategies for development of vietnam national hospital of pediatrics during 2010– 2020

CONTENT PARTCHAPTER 1: BASIC THEORIES ON BUILDING BUSINESS STRATEGIES IN THE ENTERPRISE 13 1.3.1- Classification of business strategies according to their levels 141.3.2- Classification

THESIS MBABuilding strategies for development of Vietnam National Hospital of

CONTENT PART

CHAPTER 1: BASIC THEORIES ON BUILDING BUSINESS STRATEGIES IN THE

ENTERPRISE

13

1.3.1- Classification of business strategies according to their levels 141.3.2- Classification of business strategies according to their contents 15

2.4- Building and selecting strategies 24

CHAPTER 2: BUILDING STRATEGIES FOR DEVELOPMENT OF VIETNAM

NATIONAL HOSPITAL OF PEDIATRICS DURING 2010 - 2020

27

1.4.1- Results of specialized activities 30

2.1.2.2- Summing opportunities and challenges for the environment sector 43

2.2.6.2- Regime for employees 50

1.4.6- Reputation 65

1.4.9- Accomplishing the information system to instruct the strategy

implementation

66

3 Drawbacks in process in research and research orientation in the

LIST OF TABLES, DIAGRAMS

2.2 Results of medical examination and treatment during the past 6 years 302.3 Results of revenue and expenditure through a number of years 34

2.5 Comparison in competitive capacity and market share on the site in 2008 45

2.1 Organizational structure of Vietnam National Hospital of Pediatrics 29

1 Necessity of the research subject

Under the background of current fierce market, any enterprise wishing to exist anddevelop must find its own appropriate direction, and build developing strategies whichcomply with external environmental conditions and the enterprise’s internal factors, inwhich business strategy is a component and one of the most important bases to buildthe enterprise strategies

Founded in 1969, after 40 years of building and growing, Vietnam National Hospital ofPediatrics have developed continuously, becoming the leading Hospital specializing inPediatrics in Vietnam which provides medical examination and treatment for millions

of patients throughout the country

However, Vietnam is a young population country having over 86 million people, 16million of which are children with age under 161 The demands for examination andtreatment of people, in general, and small children, in particular, are very high,especially when the current environmental and climatic conditions changecomplicatedly and many new diseases have appeared, threatening the health and life ofsmall children

Our country has only 30 hospitals specializing in Pediatrics and Obstetrics 2, in whichthere is only 01 national hospital; the remaining ones are provincial and city hospitals,leading to regular patient overload at other hospitals, especially in summer and winter

In parallel with the country’s open and developing economy, apart from demands forhigh quality health care of Vietnamese people have increased more and more Thetendency to have demands for medical examination and treatment of diseases at joint-venture hospitals and in neighboring countries such as Singapore, Thailand, China,Korea and even the US has increased

1 Sources reported the General Statistics Office 2009

2 Home electronic information Ministry of Health

To meet demands for examination and treatment of diseases of the people at maximum;

to exist, develop and compete with other hospitals, besides investing in upgradinginfrastructures, applying modern scientific and technological advances in diagnosis,treatment, etc, building strategies for long-term business development is of great

importance That is the reason why our group chooses the research subject “Building strategies for development of Vietnam National Hospital of Pediatrics during 2010– 2020”.

4.1- Method of data collection: Uses both primary and secondary data such as:

- Collection of primary data via such sources as press, television, Internet, thehospital’s internal documents, reports of health sector and specialized magazines

- Collection of secondary data: through working meetings with leaders, cadres andemployees currently working at the hospital; interviews with experts in health sector

4.2- Method of comparison and synthesis:

Comparing an indicator with the basis (original indicator) for data of business results,market parameters, mean indicators and other comparable indicators Conditions for

comparison are that data must be appropriate in terms of space, time, economiccontents, measuring units, calculating methods, business scales and conditions.

4.3- Method of statistics using tables and diagrams:

The statistics used to find the common trends or characteristics of analysed factors

5 Structure of the subject

The subject is presented in 3 chapters:

+ Chapter 1: Basic theories on building business strategies in the enterprise

+ Chapter 2: Builing strategies for development of Vietnam National Hospital ofPediatrics during 2010 – 2020

+ Chapter 3: Strategic solutions and recomendations

CHAPTER 1: BASIC THEORIES ON BUILDING BUSINESS STRATEGIES IN THE ENTERPRISE

1 Basic issues on strategy

1.1- A number of concepts on strategy

The term “Strategy” was first and popularly used in military field; according to

American Encyclopedia, “Strategy is a science and art of military management applied

to planning and implementation on the whole scope to gain the final victory”, Today,

the term “Strategy” is popularly applied in business filed Our group would like toquote definitions of some authors:

- “Strategy is the pattern of objectives, purposes and plans for achieving those goals”3

(Andrew)

- “Strategy is the determination of the basic long term goals and objectives, and the adoption of courses of action and the allocation of resources necessary for carrying out goals"4

(Johnson and Scholes)

- “Strategy is the pattern or plan that integrates an organization’s major goals, policies and action sequences into a cohesive whole"6

(Quinn)

- “Strategy is a harmonious combination of activities and allocation of resources to achieve goals of an organization Strategy of an organization is endeavors to make full

3 Kenneth L.Andrew (1965)

4 Chandler, A (1962), Strategy and Structure Cambrire, Massacchsettes MIT Press.

5 Johnson, G, Scholes, K (1999), Exploring Corporate Strategy, 5th Ed Prentice Hall Europe

6 Quinn, J., B (1980)

use of the organization’s capacity and resources to deliver the most appropriate responses to opportunities and challenges of the external environment”7

(Bateman and Zeithaml)Despite of differences, all of the concepts mentioned above refer to the generality ofpredetermined goals, policies and action plans of an organization

1.2- Characteristics of a strategy

We can realize that there has not been unification among viewpoints on strategy.However, at any angle, in any period, a strategy still has the most commoncharacteristics are:

- Business strategies clearly identify basic objectives and business orientations of theenterprise in each period

- Orienting nature of strategies guarantee that the enterprise can develop continuouslyand steadily in a changing business environment

- Business strategies guarantee maximum mobilization of capital in combination withoptimum exploitation and use of the enterprise’s resources at present and in the future,bringing into play advantages and grasping opportunities to gain competitive edges

- Business strategies of the enterprise are reflected during a continuous process

- Business strategies always tend to attack and gain advantages in the business world

- Business strategies are usually built in a long period (3 years, 5 years, 10 years)

1.3- Types of business strategies

1.3.1- Classification of business strategies according to their levels

Each enterprise has 3 levels of strategies, including company-level strategies; businessstrategies and functional strategies

- Company-level strategies (or general strategies): these are the strategies built for thewhole company in all of the fields involving its participation These strategies aim toshow the destination the company wishes to reach

7 Bateman và Zeithaml,( 1990)

- Business strategies (fields): are built for a specialized business line

- Functional strategies: these are strategies of each specific function in the companysuch as finance, marketing, human resources, etc; functional strategies can be regarded

as supporting strategies to successfully carry out business strategies and company-levelstrategies

1.3.2- Classification of business strategies according to their contents:

Based on contents of strategies, French managers assume that business strategiesinclude the following types: Commercial strategies; Technological and technicalstrategies, Financial strategies, Human strategies

1.3.3- Classification of business strategies their processes

Business strategies consist of:

- Orienting strategies: deal with major orientations on the enterprise’s goals, directionsand measures to achieve those goals They are built based on the results of analyzingenvironments and the internal enterprise Orienting strategies provide the strategicplans for the enterprise

- Action strategies: are action projects of the enterprise in specific situation andanticipations for adjusting strategies Action strategies can be selected from strategies builtwhile building, orienting strategies and can be selected from strategies emerging duringimplementation of orienting strategies

1.4- Roles of business strategies

- Business strategies help the enterprise clearly identify its purposes and directions,serving as the basis and guideline for all business and production activities of theenterprise

- Business strategies helps the enterprise catch and make full use of businessopportunities, at the same time take active measures to overcome risks and threats inthe competitive market

- Strategies contribute to enhancing effectiveness of resource usage, reinforcing theenterprise’s competitive position, and ensuring its sustainable development.

- Business strategies create established base for putting forward policies and decisions

on business and production in accordance with market changes

1.5- Process of strategy planning

Diagram 1.1- Process of strategy planning

2 Contents of strategy building process

Although there are various viewpoints and approaches on formation of strategies, but in short,strategies are usually built according to the following steps:

Diagram 1.2: Process of business strategy formation

14

Formation (to decide what to do)

Implementation (to achieve results)

Types of objectives and policies defining the company and its lines of business.

Enterprise’s structure and relationships:

Division of labor, coordination between sections and information systems

Process of organization and actionMeasuring standards and methods, system of motive forcesControl systemSelection and promotion

Company’s highest ranking leader

The enterprise’s strategic functions, duties and objectives (1)

Internal enterprise

analysis (S, W) (3)

Analysis of business environments (O.T) (2)

Selecting strategies (4)

Company-level strategies (5) Strategies of business establishments and functional

divisions

Implementing strategies (6)

Checking and evaluating implementation results (7)

Feedback

2.1- Determining the organization’s missions and goals

2.1.1- Determining the organization’s missions

In general, the establishment of a mission statement is a continuous process with sixbasic steps:

Step 1: Forming initial ideas on business missions.

Step 2: Investigating external environments and recognize internal conditions

Step 3: Re-determining ideas on business missions

Step 4: Rebuilding the company's mission statement

Step 5: Organizing the implementation of the company’s mission statement

Step 6: Reviewing and adjusting the mission statement

During building of the mission statement, it is necessary to consider expectations ofowners and leaders as well as the company’s external and internal factors

2.1.2- Determining strategic goals

Goals specify orientations to pursue, having influences on the enterprise’s types ofactions

Goals also have a central role, being the results of comparison For each enterprise,goals can be of long-term, medium-term or short-term types Economists assume that

an enterprise fixes its goals in the following 8 main fields: Market position; Innovation;Productivity; Financial resources and logistics; Profits; Cadres’ development andperformance; Workers’ attitudes and performance; Responsibilities to the society If 1

of the 8 fields mentioned above is lacked, there will appear serious consequences forthe whole enterprise In order for the fixing of short-term goals not to harm long-termgoals, there must be a balance between these goals

2.2- Analyzing the enterprise’s external business environments

2.2.1- Impacts of external environments on business strategies

External environments are factors which can cause influences on fulfilling theenterprise’s expected goals Analyzing external environments includes analysis ofmacro environment and sector (micro) environment Analysis of these factors helps theenterprise determine its position and environmental characteristics, the age in which itexists, identify influences of external environments on the enterprise and its goals, thusmaking decisions on strategic planning

2.2.1.1- Macro environment:

Macro environment consists of various factors which have indrect influences on theenterprise’s activities through its impacts on factors belonging to sector environments,five of which are evalulated by managers to be factors having the most drastic impactsincluding economic factors, institutional factors, legal factors, social factors, naturalfactors and technological factors

2.2.1.2- Sector environment:

Is the environment closely related to the enterprise’s activities; factors of operationenvironment will determine investment environment, competitive intensity and profitrate within the sector

Diagram 1.3 : Model of five competitive pressures according to M Porter8

- Potential competitors: are enterprises which are currently not participating incompetition in the sector, but are likely to penetrate into the sector The appearance ofthese competitors will increase competitive intensity, and reduce profit rate in thesector The ability to penetrate of these potential competitors depends on barriers forpenetrating into the sector; if barriers to entry are great, the ability to penetrate willreduce and vice versa According to Joe Bain9, There are three main barriers to entry:customer loyalty to the company’s products, absolute advantage of cost and economies

of scale If an enterprise has strategies to raise barriers to entry, it will restrict the risksdue to penetration of potential competitors

8 M.E Porter, Competitive Strategy(New Yok: Free, Press, 1980)

9 J.E Barriers to New Competition (Combridge, Mass: Harvard University Press, 1956) For a review of the modern literature on barriers to entry, see R,J Gilbert, “Mobility barriers and value on Incumbency” in R Schmalensee and R.D Willig, Handbook of Industrial Organization, (Amsterdam,, Holland 1989),I.

Risks from potential competitors

Negotiating

capacity of

suppliers

Threat of substitutes

Negotiating capacity of buyers

Competition between competitors within the sector

- Current competitors:

Competitors are regular pressure and directly threaten enterprises When thecompetition of enterprises existing in the sector rises, there will be more threats to theearning capacity, existence and development of the enterprise because this competitioncauses the enterprise ton raise investment cost in order to differentiate its products,services to access to market or reduce cost price

2.2.1.3- Number and capacity of enterprises within the sector:

Number and capacity of enterprises within the sector determine competitive nature andintensity within the sector In a sector with high number of enterprises and equalcapacity, competition tends to happen violently and lean more to price war In casethere are few dominant enterprises, these enterprises usually unite with one another tocontrol the market and the less dominant companies often have to comply with therules of the game set by leading enterprises

Market demands: demands for the enterprise’s products and services have greatimpacts on competitive intensity When demands for product tend to increase,enterprises will find it easier to protect or expand their market share, competitivenesswill be less fierce; however, when demands tend to decrease, enterprises wishing toprotect their market share and expand the market will indispensably have to take part in

a fierce war with other enterprises

The higher this cost is, the more difficult enterprises will find it to get out of the sector;therefore, enterprises will have to be determined to fight for existence That makescompetitive intensity increases more and more, especially in mature or decliningperiods On the contrary, if exit barriers are low, competitive intensity within the sectorwill tend to decrease

Besides the factors mentioned above, competitive intensity also depends on otherfactors such as differentiation of products and services among enterprises within thesector, the sector’s growth rate, bet on the sector, fixed cost, etc

2.2.2- Evaluating environmental impacts

To evaluate environmental impacts, people usually use the method of quantifyingimpacts of environmental factors on the enterprise’s activities; then, those factors will

be synthesized This process is performed through five steps:

Step 1: Making a list of factors which have decisive roles to the enterprise’s success

Step 2: Determining each factor’s importance to the sector

Step 3: Determining significance of each factor in relation to the ability to respond of

the enterprise’s current strategies or importance to the enterprise

Step 4: Calculating points of each factor.

Step 5: Totalling points.

After totalling points, we will realize environmental impacts on the enterprise,determine opportunities and challeges the enterprise has to overcome This is the basis

to build business strategies in order to ensure strategies’ compliance to environmentsand movements

2.3- Analyzing the internal enterprise (analyzing internal environment)

The enterprise's ability is a basic factor determining what the enterprise can do,whether its strategies can be successfully implemented To ensure feasibility ofstrategies, when building strategies, we have to evaluate real situation, determinestrengths and weaknesses, thereby define the enterprise’s differentiating ability orcompetitive advantages Internal analysis is porformed in the following aspects:

2.3.1- Analyzing the organization’s value chain

Table 1.1 The organization’s value chain10

10 http://vi.wikipedia.org/wiki/Chu%E1%BB%97i_gi%C3%A1_tr%E1%BB%8B

activities

Marketingand sale Production

After-saleservices

Value chain is a combination of the enterprise’s activities in order to increase values.The organization’s value chain is made up of two types of activities: main activitiesand supporting activities

Main activities are activities closely related to the enterprise’s products and services.

They include purchasing activities, input factor management activities, marketingactivities for services and subsequent customer care actitvities

Supporting activities help main activities to be carried out more successfully and

effectively Activities we are referring to are human resource management,technological development and purchasing activities

2.3.2- Analyzing financial codition

One important and indispensable part is result of business activities through theenterprise’s financial indicators Via calculation data about the analyzed financialindicators, we will have a clear insight into financial ability, planning and management.Besides the factors mentioned above, internal analysis include such issues assustainable values, internal control as well as control of risk factors in investmentanalyzed and evaluated depending on level of activities

Upon completion of internal analysis, we have to make a summary table of the enterprise’sstrengths and weaknesses This is the final work and also the result of internal analysis stage

The summary table of strengths and weaknesses is made based on principles of thesummary table of opportunities and challenges in environment analysis part.

Upon combining the two summary tables mentioned above - opportunities andchallenges; strengths, weaknesses - we get the result for analysis and synthesis ofstrengths and weaknesses, opportunities and challenges (SWOT matrix) This is thefinal expected result of environment and internal analysis, at the same time, is thepremise for the enterprise’s strategic planning

Table 1.2: The enterprise’s SWOT matrix analysis table11

Based on SWOT matrix, the enterprise will find strategies to bring into play strengths,overcome weaknesses, make full use of opportunities and avoid challenges set by theenvironments

2.4- Building and selecting strategies

Strategy is a system of major policies and measures in order to deploy and coordinateaction plans, helping the organization fulfill its goals most effectively Company-levelstrategies are strategies covering the whole activities of the company, aiming tocompete most effectively, dominate the market, and ensure sustainable development

2.4.1- Concentrated growth strategy:

In pursuing this strategy, the enterprise’s strategies focus on improving products ormarkets without changing other factors The enterprise will try to exploit everyopportunity gained for the current products and services or operating markets

Table 1.3: Table of changes in concentrated growth strategy12

11 http://www.sciencedirect.com/science

12 http://epress.anu.edu.au/anzsog/centrelink/mobile_devices/ch03.html

combination

Products, services Markets Sector Sector’s level TechnologyCurrently or newly

implemented

Current or

The concentrated growth strategy allows the enterprise to focus all of its efforts on theoperating fields of strengths, exploit outstanding strengths to develop business.However, the concentrated growth strategy omits the opportunity to expand marketswithout using up the enterprise’s remarkable performances, catching developmentopportunities of other sectors

2.4.2- Integrated growth strategy:

Enterprises, in pursuing this strategy, will find measures to undertake the input factorproduction or product consumption stages Implementing the integrated growthstrategy, enterprises can make forward or backward integration, total integration,internal or external integration

Table 1.4: Table of changes in integrated growth strategy

Integrated growth strategy help the company save cost and reduce costs of markets,better control quality, make full use of business opportunities and become more active

in planning business and production projects This strategy can be applied to capableenterprises catching opportunities which are suitable for their long-term goals

2.4.3- Diversification-based growth strategy:

An enterprise pursuing diversification-based growth strategy will implement measures

to develop its new products, services and dominate new markets in order to improve

the operation effectiveness Diversification strategies make full use of the surplusfinancial resources, create new competitive advantages, and restrict risks, etc.However, diversification strategies also require the enterprise to improve itsmanagement capability, carefully consider benefits and costs for development in thisdirection.

2.4.4- Reduction strategy:

This strategy is very necessary when the enterprise restructure to serve the new period.The strategy is implemented when business lines pursued by the enterprise do notremain promising for long-term development, the economy is not stable or moreopportunities that are valuable appear Reduction strategy aims at reduce costs, andrecover investment capital

2.4.5- Mixed strategy:

An enterprise, in the same period, can apply various strategies The enterprise canpromote development in this field while making reduction in another line of business.Those activities all aim to successfully implement the general goals of the enterpriseduring implementation of strategies

The selection of which strategy among the strategies mentioned above depends on theenterprise' ability of and related environmental conditions From result of SWOTanalysis will choose the most appropriate business strategies

2.5- Building level strategies

2.5.1- Business strategies

For enterprises with single-sectoral business lines, level strategies coincide with theenterprise's strategies However, for multi-sectoral enterprises, in each business lineswith its involvement, the enterprise has to build a unique business strategy Due tovaried features and environmental conditions of each sector is different, developmentstrategies for each sector cannot be the same

2.5.2- International business strategies

Talking about international business strategies, we usually refer to the two mattersincluding strategies of penetration into and expansion to foreign markets and strategies

of competition The matter of competition in international markets also has the samefeatures as that of competition in domestic markets; however, the competitive extentand nature of international business strategies are much more competitive than those ofdomestic markets

CHAPTER 2: BUILDING STRATEGIES FOR DEVELOPMENT OF VIETNAM NATIONAL HOSPITAL OF PEDIATRICS DURING 2010 - 2020

1 Overview of Vietnam National Hospital of Pediatrics

1.1- Forming and developing process 13

Vietnam National Hospital of Pediatrics was founded in 1969 with the initial name ofthe Hospital for Protection of Children’s Health; in June 2003, was officially namedVietnam National Hospital of Pediatrics

Vietnam National Hospital of Pediatrics is assigned by Ministry of Health as theleading unit of the nationwide pediatric system The hospital is a medical center andthe highest pediatric treatment level throughout the country At present, the hospitalhas had 1,220 cadres and employees; the total number of sick-beds is 850

Information about the unit:

Name of unit: VIETNAM NATIONAL HOSPITAL OF PEDIATRICS

+ International trade name: VIETNAM NATIONAL HOSPITAL OF PEDIATRICS+ Abbreviated name: NHP

+ Head office: No 18/879, La Thanh Street, Dong Da District, Hanoi

13 www.benhviennhitu.org.vn

1.2.2- Scientific research: The hospital is the leading Pediatric scientific research

center of the whole country A lot of State-level, Ministry-level and grassroots levelresearch subjects have been conducted annually

1.2.3- Training: The hospital has coordinated with Pediatric Department of Hanoi

Medical University in training Pediatric students, level I, level II specialists, PediatricM.As and Doctors Annually, the hospital coordinates with international pediatriccenters to organize from 20 to 25 training classes on updating Pediatric knowledge forPediatric doctors and nurses throughout the country, train, transfer technology fordoctors of many countries in the region such as Laos, Thailand, Malaysia, Philippineand in the world like France, USA, Italia

1.2.4- Speciality guidance: As a leading Pediatric organization, the hospital has

focused on guiding the sector in the direction of carrying out primary health care andimproving quality of diagnosis and treatment In recent years, the hospital hasconcentrated on guiding to improve the quality of emergency system and strive toreduce newborn mortality rate to the lowest level

1.2.5- Education health activities: Education on nursing children, consultancy on

juvenile health, disease prevention have been conducted by the hospital in manyforms: organization of workshops, conversations, presentation about special subjects

on the communication media (radio stations, television), etc

1.2.6- International cooperation

At present, the hospital has cooperated with hospitals and organizations of variouscountries such as JICA (Japan), Melbourne Royal Children Hospital, FriendshipOrganization ICPH (Sweden), American Veteran Association, REI Association(USA), Project Vietnam (based in the US), Dartmouth University (USA), SamsungMedical Center (Keorea), Bambino Gesú Hospital (Italia),…

1.3- Organizational structure and leading machinery

1.3.1-Organizational structure

Current number of cadres and employees: 1,220

Number of functional rooms: 09

Number of specialities: 33(23 Clinical spealities; 10Para-clinical specialities)

Diagram 2.1- Organizational structure of Vietnam National Hospital of Pediatrics14

14 www.benhviennhitu.org.vn

26

Board of Directors Mass Organization Boards and Councils

Administrative Section Speciality Section Technical Section

Clinical Block Para-clinical Block

Personnel

Department

Neonatology Department

Intensive Care Unit

Hematology Department

Nutrition Regulation Department

General Technical Department General

Emergency Department

Infectious Diseases Department Psychiatry Department

Traditional Medicine Department Rehabilitation Department

Surgical Department

Gastroenterology Department

Hematology Department

Kidney – Urology Department Neurology Department

Respiratory Department

Anesthesia Department

Cardiology Department

Endocrinology Department

Oncology Department

Surgical resuscitation Department

Voluntary Treatment Department

Imaging Diagnostic Department

Blood Transfusion Department

Biochemistry Department

Microbiology Department

Clinical Testing Department

infection Department

Anti-Pharmacy Department

Anatomy Department

Post-operation Testing Department

Material and Equipment Department

1.3.2- The hospital’s leaders: Boards of Leaders’ composition is as follows:

Table 2.1- Composition of the hospital’s Board of Leaders:

birth

Educational background

Children

1.4-State of medical examination and treatment during the past 6 years (from

2004 to 2009)

1.4.1- Results of specialized activities 15 :

Table 2.2- Results of medical examination and treatment during the past 6 years (2004

Diagram 2.2- Number of outpatients

Diagram 2.3- Number of inpatients

Diagram 2.4- Occupational efficiency of sick-beds:

The hospital was the first unit to successfully apply scheme for treatment of diarrhea

by water and electrolyte compensation via drinking in place of injection andtransfusion,

The hospital was also the first unit to apply scheme for treatment of malnutrition bysupplying energy via drinking

Vietnam National Hospital of Pediatrics was the first to organize a Pediatric cardiacintervention unit; was the first hospital to perform endoscopic operations in children

and is currently the center for endoscopic operation of children throughout the countryhaving equal level as with that of many centers in the world The hospital has carriedout over 2,000 safe endoscopic operations for 35 types of diseases, many of which arevery complicated.

Diagram 2.5- Number of operations

The hospital was the first unit to carry out a kidney transplant in children; the hospitalhad the initiative of successfully manufacturing CPAP breath-aid devices to treatchildren with breath failure, especially newborns, with cost price of 1/6 timescompared with imported devices

Vietnam National Hospital of Pediatrics was the first unit to establish a molecularbiology department Presently, the hospital can diagnose many diseases caused byviruses, especially, H5N1 viruses

The new model for managing nurses operating with independence and self-control hasbeen developed Shift handovers of nurses and doctors are separately organized

1.4.2- Financial operation results 16

Vietnam National Hospital of Pediatrics is an enterprise unit with revenue guaranteeingpart of its operating expense; the hospital operates not for maximizing profits; in

16 Annual report of Vietnam National Hospital of Pediatrics

addition to the annual non-business revenue, the hospital is partially granted by theState for operation.

Table 2.3- Results of revenue and expenditure through a number of years:

In 2009, though not less influenced by the financial crisis and global economicrecession but economic growth in 2009 was 5.32% exceeded the target of the plan17;foreign investment in Vietnam is still high; Government has made stronger policy to

17 http://www.kinhtenongthon.com.vn/Story/kinhte-thitruong/2009/12/21514.html

continue to deal with the impact of global recession after the implementation ofeffective the first stimulus package created to stabilize prices and stable domesticeconomic market Party, the government encouraged people to use domestic products

to promote development through the campaign "The Vietnamese should be used products made in Vietnam".

As the annual increase of the average per capita income, the demand for high qualitymedical examination and treatment is growing, which is a great opportunity for themedical sector to promote investment in equipment, and expansion of businessenvironment

- Threats:

In 2009, Vietnam's economy has faced difficulties and challenges due to financialcrisis and recession in the world, to narrow the significant export markets, capitalmarkets, labor markets and impact negative on many sectors of the economy - society

of Vietnam Meanwhile, natural disasters, epidemics occured consecutively, the price

of raw materials rising, has caused a great influence on production and economicdevelopment in the country; economic crisis is still much potential, but inflation hasreduced the level remains high, monetary policy has been tightened, domestic demandremains low… Government had to launch economic stimulus package 2 (after theNational Assembly on October 30, 2009) to promote economy development

For Vietnam National Hospital of Pediatrics: Because the impact of financial crisis andrecession, expense of investment (domestic and foreign) in hospitals decreasedsignificantly, some of projects, among them projects that build high quality a medicalexamination center, investment modern equipment for examination and treatment weredelayed progress against the plan because no capital

2.1.1.2- Political - legal environment

- Advantages:

Vietnam’s political environment is evaluated as the most stable one in the world Thathas been shown for the last several years when Vietnam successfully hosted to hold alot of significant international events, such as ASEM5 summit (2005), APEC summit(November, 2006) and Vietnam officially became impermanent member of UnitedNations Security Council in term of office (2008 – 2009); particular, in 2010, Vietnamwill have the president of ASEAN It is the unique opportunity for Vietnam to declareits stature on the international arena, creating premises to attract foreign direct andindirect investment capital to Vietnam, including investment for upgrading andconstructing the system of modern Pediatric hospitals to serve citizens’ need ofmedical examination and treatment.

Vietnam has been making great efforts in legislation, a lot of new codes have beenpromulgated, and some former ones have been supplemented and amended inconformity with socioeconomic development activities In respect of law concerningchildren, Vietnam has Law on Child Protection and Care and signed the United

Nations Charter of Children’s Rights Protection; “Children under age 6 shall not have

to pay for examination and treatment in public medical foundations” 18 Health

insurance law officially takes effect from January 10, 2009; in 2009, the Law examineand treat medically also discussed, for detailed amendments and supplements to theapplication and issued in 2010 by the National Assembly

Our State’s policy on citizens’ health care specifies: “Health is the precious asset of each person as well as the whole society Protecting, caring and improving citizens’ health is the humane action which directly ensures the human resource for the career

of building and defending the Country, is one of the top priority policies of the Party and State Investing into this aspect is investing into development, which manifests the good nature of our society”19, creating opportunities for medical foundations to investinto equipment, facilities and improve quality and qualification of human resources

18 Article 28, Decree No 36/2005/NĐ-CP, dated March, 17th 2005, Instructing to implement some Articles of

Law on Child care, education and protection.

Preferential policies on taxation for the medical sector such as: exemption from valueadded tax and reduction in enterprise income tax have been yielded benefits to themedical sector

- Threats:

Nowadays, the transition from free regime based on real payment to paying according

to regulations of Medical Insurance has caused many difficulties for Pediatrichospitals Many materials and facilities, medicines, medical tests were not paid byinsurance Overload in public hospitals, especially hospitals of the upper line, is stillserious Due to poor infrastructure, the demands for high quality health care of high-income people are not satisfied, many people have to go abroad for examination andtreatment The new health insurance law have adjusted to the subjects receiveinsurance but also the inadequacies of the grant, on health insurance cards for thepeople moved slowly, therfore the payment of hospital charges more entangledquestions; the drug supply, especially cure for patients with serious diseases hasreduced

2.1.1.3- Technological environment

- Advantages:

During the last years, science and technology have attracted special attention fromcountries all over the world They are one of the keys of success when applied tomanufacturing and supporting services There have been hundred thousands ofinventions researched and successfully applied, of which there have been those inmedical field Vietnam, in this common international context, is able to welcome andgrasp applications of the most advanced science and technology in different fields,especially, in the medical field Thanks to the development of science and technology,medical foundations have a wider range of options in investing and applying newtechniques in diagnosis and treatment, for instance: viscera transplant (liver transplant,

19 Resolution No 46/NQ-TW, dated 23 rd February 2005 of the Ministry of Politics (Course IX) on “Protection,

Care and Improvement of Citizens in the new state”.