Building business strategy in real estate for company 59, the ministry of defense

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --- NGUYỄN VĂN ANH BUILDING BUSINESS STRATEGY IN REAL ESTATE FOR COMPANY 59, THE MINISTRY OF DEFENCE XÂY DỰNG CHIẾN LƯỢC KINH DOANH

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

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NGUYỄN VĂN ANH

BUILDING BUSINESS STRATEGY IN REAL ESTATE FOR COMPANY 59, THE MINISTRY OF DEFENCE

XÂY DỰNG CHIẾN LƯỢC KINH DOANH

BẤT ĐỘNG SẢN CÔNG TY 59, BỘ QUỐC PHÒNG

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2018

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

NGUYỄN VĂN ANH

BUILDING BUSINESS STRATEGY IN REAL ESTATE FOR COMPANY 59, THE MINISTRY OF DEFENCE

XÂY DỰNG CHIẾN LƯỢC KINH DOANH

BẤT ĐỘNG SẢN CÔNG TY 59, BỘ QUỐC PHÒNG

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS TRẦN HUY PHƯƠNG

Hà Nội - 2018

COMMITMENT

The author undertakes that the results of the study in the dissertation are the results of the author's own work primarily obtained during study and research and not yet published in any other research by others

Research results and other people's materials (quotations, tables, formulas, graphs and other materials) used in this dissertation have been approved by the authors and cited in detail

I am fully responsible to the scientific council on thesis defence, Hanoi School of Business and Management and the law for the above commitments

Student

Nguyen Van Anh

ACKNOWLEDGEMENT

During my study and thesis writing process, I received valuable guidance from lecturers at the Hanoi School of Business and Management – Vietnam National University, Hanoi

First of all, I would like to thank the leaders and lecturerer for their hard work I would like to thank for the heartedness of Ph.D Tran Huy Phuong to instruct me in the preparation of graduation thesis

I also sincerely thank the staff of Company 59 to support, provide information and facilitate me for completion of my research

I give my thanks to my wife and two lovely children for their spiritual support motivating me to complete the dissertation at the time of busy and pressure from many factors

With the supports from many sides, I also made great efforts to complete the thesis in the best way but due to certain limitations on knowledge, time and information, the work has certainly existed shortcomings I hope to receive the sympathy, contributions and supports of lecturers and readers to complete the topic

Thanks and best regards

TABLE OF CONTENTS

LIST OF TABLES i

LIST OF FIGURES ii

INTRODUCTION 1

2 Overview of the research status 2

3 Objectives of the research 4

3.1 General objectives 4

3.2 Specific objectives 4

4 Subjects of the research 5

5 Scope of the reseach 5

6 Methods of the research 5

CHAPTER 1: THEORETICAL BASIS OF BUSINESS STRATEGY IN REAL ESTATE 7

1.1 The general theories of business strategy 7

1.1.1 Concept of strategy and business strategy 7

1.1.2 Characteristics of business strategy 8

1.1.3 The role of business strategy 9

1.1.4 The levels of strategy 9

1.2 The process of building business strategy of enterprises 12

1.2.1 Identification of the mission, the current business objectives of the business 13 1.2.2 Assessment on the external environment of the business 15

1.2.3 Analysis on the internal business environment 20

1.2.4 Development of strategic options 23

1.2.5 Analysis and selection of strategy 24

1.2.6 Strategy implementation 25

1.3 The concept of real estate and property characteristics 29

1.3.1 Real estate concept 29

1.3.2 Characteristics of real estate business 30

1.3.3 Impact of real estate business characteristics on building business strategy 30

CHAPTER 2 CURRENT SITUATION OF THE COMPANY'S REAL ESTATE BUSINESS STRATEGY AT COMPANY 59 OF MINISTRY OF DEFENSE 32

2.1 About the Company 59 of Ministry of Defense 32

2.1.1 Introduction of Company 59 of Ministry of Defense 32

2.1.2 Organizational structure of company 59, Ministry of Defense 34

2.1.3 Functions and missions of the Company 59 under Ministry of Defense 35

2.1.4 Objectives and core values of the company 59 under Ministry of Defense36 2.1.5 Business results of the company 59 under Ministry of Defense 36

2,2 Analysis of the external business environment of company 59, Ministry of Defense 37

2.2.1 Macro-environmental analysis 37

2.2.2 Micro-environment analysis (sectoral environment) 47

2.2.3 Identification of opportunities - challenges 55

2.3 Analysis of internal environment of company 59, Ministry of Defense 56

2.3.1 Human resources of company 59 56

2.3.2 Physical resources 59

2.3.3 Other intangible resources 62

2.3.4 Determining of strengths and weaknesses 64

CHAPTER 3 BUILDING BUSINESS STRATEGY IN REAL ESTATE FOR COMPANY 59, THE MINISTRY OF DEFENSE AT THE STAGE OF 2018-2022

AND RECOMMENDATIONS 65

3.1 Defining of the mission, goals, vision of the business 65

3.2 Development of strategic options 65

3.3 Analysis and selection of strategic options 67

3.4 Recommendations of implementation of the strategy 71

3.4.1 Marketing mix solution 72

3.4.2 Human resource solutions 74

3.4.3 Solutions on raw materials 75

3.4.4 Financial solution 75

3.5 Some recommendations to the management level 76

CONCLUSION 78

REFERENCES 79

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LIST OF TABLES

Table 1.1 SWOT matrix - Strengths - Weaknesses - Opportunities - Risks 24

Table 1.2 Quantitative Strategic Planning Matrix - QSPM 25

Table 1.3 Matrix of Strategic Business Review 28

Table 2.1 Major business lines of the company 59 32

Table 2.2 List of typical works have been implemented 34

Table 2.3 List of capacity of technical workers 35

Table 2.4 Summary of financial data 36

Table 2.6 Comparison table between units 53

Table 2.7 Comparision of revenue between company 59 and CC1 54

Table 2.8 Opportunities and challenges 55

Table 2.9 Statistics of the land fund allocated for management use 60

Table 2.10 Strengths and weaknesses 64

Table 3.1 SWOT matrix proposed business strategy for Company 59 65

Table 3.2 Matrix quantitative strategic planning 68

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LIST OF FIGURES

Figure 1.1 The process of building business strategy of enterprises 13

Figure 1.2 Model of external environment analysis (business environment) 15

Figure 1.3 PESTEL model of macro environment analysis 16

Figure 1.4 Model 5 Competitive Force M Porter 18

Figure: 1.5 Business Strategy Evaluation Matrix 27

Figure 2.1 Organization chart 59 34

Figure 2.2 Vietnam's GDP over the years 37

Figure 2.3 Total state budget revenue 2017 38

Figure 2.4 Total budget of 2017 38

Figure 2.5 CPI Index 2017 39

Figure 2.6 Speed of urbanization in Vietnam 41

Figure 2.7 Real estate market in Vietnam 2016 41

Figure 2.8 Survey the sales team through survey questionnaire form 1 57

Figure 2.9 Survey the sales team through survey questionnaire form 2 57

Figure 2.10 Survey qualifaction of management and leadership through survey questionnaire form 1 58

Figure 2.11 Survey of technological capacity in group 1 59

With the potential economy, there has already been many real estate investment projects in Vietnam The types of investment are very diverse such as high-end apartment buildings, office buildings for rent, shopping centers, etc., creating a tremendous impetus for social and economic development and changing the face of urban in Vietnam

However, real estate has been a very specific business area that requires special conditions such as strong financial resources, ability to raise capital, good relationships with specialized regulatory authorities, orientation as well as long-term vision of business leaders In addition, the real estate business is cyclical, thus the risk is very large so in the recent years, a series of businesses operating in this field went bankrupt owing to bank debt, lack of capital, no output and others

Company 59 of the Ministry of Defense is a state-owned enterprise under the Ministry of General Staff has many years of implementation and trading real estate projects Like other real estate businesses, the company is facing many challenges that affect the company's business The real estate sector is the spearhead and dominates almost all activities of other fields such as construction consultancy, construction and installation and others Therefore, the difficulty of this scetor shall pull a series of other business areas of the affected company The management of

research topic: “Building business strategy in real estate for Company 59, the

Ministry of Defense” is very necessary for the development of the company

2 Overview of the research status

Real estate business has only grown since the early 1990s, but the business is now an important economic sector in the country Because real estate business is directly related to a tremendous amount of assets in terms of scale, nature and value

of the aspects of the national economy Real estate shares account for about 40% of the country's wealth, while real estate-related activities account for 30% of total economic activity In developed countries, the amount of money that a bank lends through mortgages through real estate accounts for over 80% of the total loan portfolio Therefore, real estate investment and development plays an important role

in transforming assets into abundant financial sources for socio-economic development, especially development investment the infrastructure of the economy Due to the above reasons, many researches related to this field have been published Below, I would like to mention some case studies:

 Competitive environment of real estate sector - strategy of Binh Chanh Construction Investment Shareholding (BCCI) for the period of 2010 - 2015; Author’s group of the University of Economics Ho Chi Minh City (2010)

In this study, the authors focus on the real estate market in Vietnam when Vietnam becomes an official member of the World Trade Organization The real estate market gradually followed the trajectory, the real estate market of Vietnam from the non-ranked transparency index has risen in the top of the transparent market Commitment to WTO accession has helped real estate developers such as Savills, Collier, CBRE and others develop In addition, the author analyzes

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competency and, more importantly, analyzes the SWOT matrices of Binh Chanh Construction Investment Shareholding to point out strengths, weaknesses, risks and external challenge This will help the company to discover and gain a competitive edge in the real estate market However, the authors have not evaluated the construction of real estate business strategies in the company so the solutions that the authors have not put into practice the situation of the company

 Preparation of a real estate investment strategy at Vinapol Joint Stock Company; Cao Xuan Cuong (2010)

In the implementation of the research, the author has achieved the following objectives: systematizing the theoretical basis of real estate investment strategy and assessing the current ability of the business, explore the investment opportunities on real estate market and conduct analysis of the opportunities for challenge Based on the theory of the author applied the strategy of real estate investment of Vinapol Joint Stock Company in the next 10 years The author then proposed to develop solutions to effectively implement the established strategies In addition to the above mentioned objectives, the research still has limitations, including the author has not conducted external matrix analysis and internal matrix analysis, so the opportunities and challenges as well as strengths and weaknesses that the author analyzes in the SWOT matrix is sketchy and undetailed

 Real estate business in Vietnam, current situation and solutions; Nguyen

Manh Hung (2013)

In his study, the author mentions the following main contents such as general information on real estate and real estate business, rules of real estate market, relationship of real estate business with real estate other business, experience in real estate business in a number of countries in the world from which to draw lessons for Vietnam At the end of the study, the author proposed solutions to promote real estate business However, due to the author's research on the macro level, the author has not built a real estate business development strategy based on the strengths, weaknesses, opportunities and challenges of each application The author of this book is just learning about the experience of countries in the world to apply and business strategy in Vietnam

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 Establishment of a strategy for the development of the Company 59 of Ministry of Defense by 2015; Ngo Vinh Tu (2007), master thesis,

University of Economics Ho Chi Minh City

In this essay, the author has codified the rationale for business strategy in general and has come up with strategies:

• Strategy to maintain and increase market share

• Marketing strategy

• Strategy for enhancement of competitiveness

• Strategy for development of new product

In this study, the author focuses on developing a joint development strategy for the Company 59 of Ministry of Defense, not to delve into the real estate business strategy In addition, the 2007 context when research is outdated and needs more adjustment to suit the current context

Accordingly, after studying the previous works, the author will synthesize the success of the works that continue to study the “gaps” to complete the subject in his research

3 Objectives of the research

(2) Analyze internal and external factors affecting the real estate business of the Company 59 of Ministry of Defense

(3) Make proposal of strategy for real estate business development at Company 59 of Ministry of Defense and propose several conditions to implement the strategy

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4 Subjects of the research

Business strategy in real estate for Company 59, the Ministry of Defense

5 Scope of the reseach

For space: The study was conducted at the Company of Ministry of Defense For time: Data was collected over the last five years (2014, 2015, 2016, 2017); The given strategy is valid until 2022

Focus on real estate business strategy Real estate business activities are understood to include the activities of buying and selling land and assets on land, investment activities for lease, basic construction activities

6 Methods of the research

Use the case study method at the Company 59 of Ministry of Defense; thesis mostly uses qualitative methods In addition, use the method of comparison and synthesis

Data collected includes:

 Secondary data collection: collect from books, newspapers, magazines, statistical reports of the industry Books on strategic management This is the basis for the author to build the theoretical framework in Chapter 1 Data from the company, from departments and reports on the performance of the Company 59 under Ministry of Defense and others

 Primary data collection: The author combines a variety of methods including in-depth interviews with experts and sociological survey methods

In-depth interview methodology: Expert method is used to interview experienced professionals in the field of real estate and management of Company

59 - Ministry of Defense The purpose of the expert interview is to get expert opinion on the real estate business environment today: the internal environment, the external environment, the competition and others In addition, the interview with the management of Company 59 - Ministry of Defense to see the real status of the whole picture of the company's activities in the field of real estate In addition, specialists in strategic management are instructors, strategic consultants and others

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Sociological survey method (questionnaire) with experts and board of company, customers The number of votes is 100, the number of votes is 87 votes Questionnaires were divided into 2 groups:

 Group 1: Company leaders and experts: 33 questionaire forms

 Group 2: Corporate customers: 54 questionaire forms

7 Thesis structure

The thesis is structured into three chapters, namely:

INTRODUCTION

Chapter 1: Theoretical basis of Business Strategy in Real estate

Chapter 2: Current Situation of the Company's Real Estate Business Strategy at Company 59 of Ministry of Defense

Chapter 3: Building Business Strategy in Real estate for Company 59 of the Ministry of Defense at the stage of 2018-2022 and recommendations

CONCLUSION

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CHAPTER 1 THEORETICAL BASIS OF BUSINESS STRATEGY IN REAL ESTATE

1.1 The general theories of business strategy

1.1.1 Concept of strategy and business strategy

The term of strategy is derived from ancient military art Borrowing from military terms, the term “strategy” has been used quite commonly in the economic life of the macro as nation, government and others as well as micro as economic organizations Actually there are many different views on strategy Depending on the purpose of research and in different periods of economic development, economists have different views on strategies However, in terms of business research, most economists agree on the concept of strategy with business strategy

With a traditional approach, as illustrated by Alfred Chandler (1962): “The strategy

involves setting the basic long-term goals of the business and applying a series of actions as well as the division Necessary resources are needed to achieve these goals” Under this approach, the strategy is defined as a system of long-term goals,

key policies and measures on business production, finance and human factor-based solutions to help businesses grow Take a new step on the substance However, along with the development process, today's strategic concept has also changed

With a modern approach, according to McKinsey (1978): “Strategy is a series of

activities designed to create sustainable competitive advantage”, or Johnson &

Scholes (1999): “Strategy is the direction and the scope of an organization in the

long run to gain competitive advantage for the organization by formatting its resources in a changing environment to meet market demand and meet the expectations of the parties” With the new approach, the strategy is a system of

perspectives, goals and basic objectives and solutions, policies for the best use of resources, the advantages and opportunities of enterprises not only aim to achieve the objectives but also bring favorable conditions such as competitiveness, different positions in order to create competitive advantage and sustainable development for businesses

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Theoretically, most economists in the world have unified business strategies with business development strategies Accordingly, business strategy or development is a part of the overall strategy of the business, including the components of the secondary strategy: marketing strategy, financial strategy, research strategy and development and others Through business strategy will establish the most favorable conditions to create competitive advantage for

businesses So it can be easy to understand, Business strategy is to synthesize

long-term goals, policies and solutions of business production, finance and people to bring the business operations of a business state higher in quality Can understand business strategy is a general program of action that the business outlined to achieve the objectives in a certain period.

1.1.2 Characteristics of business strategy

- Business strategy is the overall strategy of the business that determines the objectives and business direction in a relatively long, five-year or ten-year period and is fully understood in all production activities to create favorable conditions and contribute to creating a competitive advantage, ensuring the sustainable development of enterprises

- A business strategy is an outline of a business's future, including goals that the business must achieve as well as the means needed to accomplish those goals; meanwhile, in reality, the business shall combine strategic and situational objectives, strategy and tactics, short-term and long-term This will ensure the business efficiency and overcome the deviations caused by the strategy

- Any decision that is important in the process of formulating, deciding, implementing, and evaluating, adjusting the strategy must focus on the highest leader of the business This ensures the accuracy of long-term decisions, for confidentiality of information

- Business strategy is always built on the basis of comparative advantages This requires that in the process of developing the strategy, enterprises must properly assess their production and business situation in order to find

1.1.3 The role of business strategy

The formation and implementation of business strategy is extremely important to the existence and development of the business The role of business strategy for enterprises is shown by Ngo Kim Thanh (2011) with four main roles:

- Business strategies help businesses clearly see their goals and direction in the development of their business It shows business executives how to look at and determine where the organization goes and when it will achieve the desired results

- The analysis and planning for business strategy not only helps businesses clearly see their strengths and weaknesses, but also identifies the opportunities and challenges that occur in the present and in the future From there, businesses can take advantage of the opportunities to grasp the opportunities, while preventing and reducing risks for businesses, helping businesses have the competitive strength to win the market

- The business strategy helps administrators use and allocate existing resources in an optimal way as well as effectively coordinate organizational functions to achieve common objectives

- The business strategy creates strong bases to help businesses proactively work out solutions to market fluctuations, as the basis for their R & D activities

1.1.4 The levels of strategy

According to Johnson, Scholes and Whittington (2008), the organization has different levels of strategy It is possible to distinguish at least three levels of strategy as follows:

The highest level is the company level strategy, which relates to the overall scope of an organization and how it creates added value for different parts of the

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organization (business units) This strategy may include issues such as the geographic scope of the business, the diversity of the product or service, and the distribution of resources between the different parts of the organization Company-level strategies may include mergers, acquisitions, and sales of businesses, decisions

to join or withdraw from the market In general, business-level strategies are concerned with the expectations of owners - shareholders and the stock market The form of a company-level strategy is reflected in a clear or implicit statement about the 'mission' that reflects that expectation Understanding the company level strategy is important, as specific, defining the scope of business as the basis for other strategic decisions At the company level there are strategies that include:

Growth strategy:

By pursuing this strategy, businesses are trying to exploit every opportunity they have for existing, currently market-driven products or services, provided by better performing companies what they are doing Growth strategies include:

+ Centralized Growth Strategy: A strategy that seeks to increase market share of existing products or services in existing markets through strong marketing efforts Specifically:

 Market entry strategy: It is a strategy to find ways to grow by penetrating into new markets to sell products and services currently being produced or supplied by enterprises

 Market development strategy: It is a strategy to find ways to grow by penetrating into new markets to consume products and services currently being produced or supplied by enterprises

 Product development strategy: A strategy to find ways to grow through the development of new products and services for consumption in markets where the business is operating

+ Integration Strategy

 Vertical integration: A strategy of self-sufficiency in production and supply of inputs to the production process or the self-consumption of products

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 Horizontal integration: A strategy to find ways to grow through mergers, acquisitions or joint ventures with competitors

+ Growth strategy through diversification

 Diversification: is the diversification into new business that is related to current operations or business activities by analogy of production, marketing, technology and others

 Diversification is to seek the methods to grow by targeting new markets with new products that are technologically unrelated to the products that businesses are producing

Stability strategy

Stability strategy is the strategy of maintaining business scale as well as stability in the strategic period

 Business field is slowing down or slowing down

 Expenses for market expansion are too high to be effective

 Scale of small business, weak potential

 Enterprises go deep into specialization serving narrow markets

 Encounter unusual fluctuations in the market

Strategy of decline

 Cost-cutting strategy: This is a temporary short-term strategy aimed at reducing ineffective parts or temporary problems related to environmental conditions

 Strategic return on investment: This strategy applies when the enterprise sells or closes one of its businesses to fundamentally change its activities, recover investment capital The resulting return on investment leads to the reallocation of resources to revitalize businesses or create new business opportunities

 Harvest strategy is a strategy that seeks to maximize the flow

of money, without further investment

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 The exit strategy is based on the idea that an enterprise can maximize the return on its business by selling it off before the industry falls into recession

The second is a Strategic Business Unit (SBU) strategy, which deals with the way in which different businesses in the company compete in their markets in their own way Thus, business unit strategy is sometimes referred to as “competitive strategy” A strategic business unit is part of an organization that has a distinct external market for goods or services the other SBU

The third level of strategy is at the operating part of an organization There are functional level strategies that relate to how the components and parts of the organization implement well the company level strategies and the business unit level in terms of resources, process and child people In fact, in most businesses, successful business strategies depend heavily on decisions made, or activities occurring, at the functional unit level

1.2 The process of building business strategy of enterprises

As described in section 1.1.1, business strategy plays a very important role in the existence and sustainable development of all enterprises in the medium and long term Building a business strategy, therefore, is not just a sketch of a business's future image based on the feelings of the business leader but requires a completely rational approach , scientific and technical According to Ngo Kim Thanh, the process of building business strategy of business is divided into 7 steps, this process

is closed and continuous

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Figure 1.1 The process of building business strategy of enterprises

Source: Ngo Kim Thanh (2011); Strategic Management Course - National Economics University

1.2.1 Identification of the mission, the current business objectives of the business

The determining of the mission, the current business objectives of the business is an important step in the process of business strategy development of enterprises The formation of the mission of the enterprise not only ensures the consensus of common goals within the enterprise, but also helps the management have the basis to formulate appropriate goals, mobilize resources of business to achieve that goal At the same time, the mission statement will help managers have

a basis for planning the most appropriate business strategy

According to Philip Kotler (2003): “The mission of a company is its manifesto for society, which proves usefulness and meaning in the existence of the

Identification of missions and objectives

Implementation of strategy Establishment of strategic methods

Review of external environment

Analysis on enterprise

Analysis and selection of strategy

Inspection and evaluation of the

implementation

at the internal factors of the company's products and services and outside the company (customer needs, competitors and others)

If the mission is a corporate statement to society, then in order to pursue its mission, businesses must set business goals to identify the accomplishments that the business needs to achieve in the period Operation is relatively long (over a year) Long-term goals are essential to the success of your business because they represent the results your business must achieve when pursuing its business mission When defining goals, businesses need to answer the question of what is the business of the business? In the goal we have to identify the business area of the business, the type

of product or service that the business wants to provide to the market, identify the basic customer group, market demand The goal must contain the desires of the business to be externalized Establishing business objectives requires the following: specificity, consistency, measureablity, feasibility, challenging, and flexiblity

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1.2.2 Assessment on the external environment of the business

Figure 1.2 Model of external environment analysis (business environment)

Business environment analysis is a process in which analysis and testing of various environmental factors An analysis of the external business environment helps an organization see the significant opportunities and threats an organization faces Managers can then develop strategies to take advantage of opportunities and avoid or reduce the impact of threats posed by the business environment The scope and content of the business environment analysis include: macro-environmental analysis, micro-environment (also called sectoral or operational environment) and internal environment is the enterprise internal environment)

1 Competitors

5 Lenders

7 Commercial associations

Internal environment of business

Structure and competitiveness 4 Suppliers

10 Government

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a Analysis on the macro environment of the business

The macro environment consists of various factors that indirectly affect the

operation of an enterprise through its influence on the factors of the industry In

fact, there are many different models that support macro-economic analysis of the

business, the most widely used of which is the PESTEL model This is an effective

and simple tool used in situational analysis to determine the forces that impact

primarily from external environmental factors (macro environments) that may affect

the organization These forces can create both opportunities and challenges for the

organization The macroeconomic factors that the PESTEL Model mentions

include: Political Factors (P), Economic Factors (E), Social Cultural Elements (S),

Public Factors Technology (T), Elements of Ecology (E), Legal Elements (L)

Figure 1.3 PESTEL model of macro environment analysis

- Economic Factors: In fact, economic environment factors have a great

influence on businesses and are most often unpredictable, among the

macroeconomic factors The movement of economic factors always contains both

opportunities and challenges for businesses Therefore, companies often pay

attention to this economic factor through economic variables such as the growth

Political factors (P)

Economic factors (E)

Sociocultu ral factors (S)

Technol ogical factors (T)

Ecologic

al factors (E)

Law factors (L)

BUSINESS

in the area where the company is operating These include political stability, a system of views, policies, regulations, rules, procedures, business procedures, import/export, taxation, labor, on the environment, on social order and others

- Cultural and Social Factors: In fact, in the medium and long term, the factors of the cultural and social environment have a direct impact on the consumption trend of the society The cultural and social environment includes elements such as population structure, customs, beliefs, values, attitudes, views on consumption and lifestyle of the people in society work

- Technological factors: In fact, this is a direct, immediate and large impact on the business strategy of many enterprises, especially business enterprises

in high technology fields The introduction of new technologies will increase the superiority of the replacement product, the product is more complete, the product price becomes cheaper and more competitive Therefore, the strategic planning process should take into consideration the rapid changes in the technological environment and invest heavily in research and development to take advantage of the advantages that technology brings for enhancing the competitiveness of enterprises

- Ecological factors or natural environment: one of the important factors in human life, as well as an input source for many industries In fact, the elements in the natural environment are considered less volatile However, negative trends in the natural environment, such as global warming, loss of biodiversity, depletion of renewable resources, increased environmental pollution, post and others has become a challenge threatening the movement of enterprises Therefore,

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in the process of strategic planning, enterprises must properly analyze and evaluate the opportunities and challenges that the natural environment affects the production and business activities of enterprises

b Analysis on the micro environment of the business

The micro-environment or sectoral environment is an environment that is closely linked to the performance of the business, and determines the investment environment, competitive strength, and profitability of the industry According to Michael Porter's (1979) Competitive Force model, the context of a business environment is influenced by forces:

Figure 1.4 Model 5 Competitive Force M Porter

Source: M Porter’s Five Forces (1979) Harvard Business Review

- Competition among competitors in the industry: The first force that

M Porter mentions in the model is the competition among competitors in the industry Competitors are constant pressure and direct threats to the company The increasing competition of existing companies in the industry threatens the company's profitability, survival and development Because of this competition, the company has to increase its investment costs in order to differentiate its product or service from accessing the market or reducing its cost Therefore, the process of

Competition among competitors

in industry

Potential competitors

Negotiating rights of buyers

Negotiating rights

with suppliers

Threats from replaced products and services

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business strategy requires enterprises to not be able to ignore the analysis of competition among competitors in the industry When analyzing competition among competitors in the industry, we need to consider factors such as: Number of competitors in the industry, growth of the industry, diversity of competitors, characteristics of products and services, fixed costs and inventory, barriers to entry and exit from the industry

- Potential competitors: This is the second force mentioned by M Porter Potential competitors are companies that are not currently competing in the industry but are likely to enter the industry The emergence of these competitors will reduce market share, reduce the profitability of existing firms in the industry, and increase competition in the industry However, whether potential competitors enter the industry depends largely on barriers to entry, particularly, economies of scale, product differentiation, capital requirements initial investment, conversion costs, access to distribution channels, government policies Therefore, the business strategy planning process of the business also needs to fully consider the factors of this potential competitors

- Supplier negotiation rights: In practice, suppliers can pressure the company through increased demand or a reduction in the quality of its inputs It directly affects the cost and quality of products and services of the company; Therefore, it will affect the reaction of customers, affecting the market share, revenue and profit of the business Supplier pressures often appear in contexts such

as the market for only one or a few suppliers, no substitutes or no alternative suppliers, purchasing from suppliers is an important input of the business, high supplier conversion costs and others

- Buyer's negotiating rights: Buyers here are understood to be users, intermediaries, and industrial buyers The pressure from buyers comes from their ability to negotiate in two forms: the ability to demand discounts and the ability to demand better quality products and services As the ability of the buyer to negotiate increases, it will force the business to meet their needs, reducing the price

end-of the product or investing more in related costs to improve the quality end-of the

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product As a result, corporate profits decline Pressure from customers often appear

in the scene such as customers buy a large number, the business depends on a few customers, customers have full information about the price, quality of the home and others

- Threats from alternative products and services: Alternative products and services are different service products but meet the same consumer demand The emergence of alternative products and services will create the risk of competition, reduce market share, reduce revenue and profit of the business In addition, changes in consumer trends are also an important factor contributing to the formation of threats from alternative products and services Therefore, in the process of strategic planning, managers also need to look at the risks and challenges

of alternative products and services in a holistic way

1.2.3 Analysis on the internal business environment

Analysis on the internal environment of an enterprise – Analysis and evaluation of the resources: An enterprise's resources include: human resources, material assets, intangible resources (Hamel & Prahalad 2006) This is the decisive factor in the ability of the business, deciding the success of the market; in which the most important resource is human In each period, each resource has its own strengths and weaknesses compared to its competitors in the industry Therefore, managers at all levels, top executives must always have information on the current resources in and the potential for analysis and evaluation to make full use of resources available to create a competitive advantage in the long run

a Human Resources

Human beings are the core element in all kinds of business activities, deciding the success or failure of businesses and organizations in each country In enterprises this factor is extremely important because all decisions related to strategic management are human-made, the ability to compete in the market is strong or weak, the organization is good or not all come from humans Human resources are therefore the first element in the resources that managers of long-term

Therefore, proper analysis and evaluation of material resources is an important basis to help business executives understand the potential material resources, constraints, and so on for management decisions This is to adapt to the realities such as maximizing the available cash and capital resources, selecting and mobilizing external funds when needed, to increase the size of the material resources, reserve a ratio necessary to ensure the ability to cope (defend or attack) with competitors on the domestic and foreign markets In practice, the manager conducts the analysis of resources through key activities such as:

 First: Classification of existing material resources of the enterprise: cash capital, machinery, equipment, workshops, warehouses, land, supplies

 Second: Define the size, structure, quality and characteristics of each material resource

 Third: Evaluate the ability to meet the actual needs of each resource in the program of action of each department within the enterprise

 Fourth: Assess and identify the strengths and weaknesses of each material resource relative to the major competitors in the industry and the market by geographical area

Depending on the type of resources, this analysis should be conducted periodically or extraordinarily to serve the decision makers' needs For example, marketing executives need to formulate or adjust competitive strategies that must always have a source of information about customers and competitors in the market; financial regulators often need information on the scale of demand for fixed capital,

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working capital in their internal parts and cash or in kind, credit sources, etc., can be mobilized to meet the needs of operational processes, projects, etc.; or, every year, business executives need to evaluate resources to prepare action plans for the coming year, etc

Depending on the available resources, the size and value of these resources varies from time to time Without identifying and properly evaluating intangible resources, business executives lose sight of their available advantages in the production and business process

In order to achieve long-term success in the domestic and foreign markets, business executives need to see the importance of intangible resources in the strategic management process of identifying and properly assessing resources Hospitalization and proper assessment of intangible resources available, knowledge

of intangible resources not available to build and develop them in the future

The analysis of invisible resources proceeds through the following steps: Step 1: Identify and categorize the invisible resources of the business The manager needs to ask questions and make self-answers to identify the business or organization that has intangible resources to evaluate and Compared to competitors

Step 2: Compare and evaluate intangible resources with your competitors After answering the questions, the administrator can list the existing intangible resources in sequence, compare them with the main competitors and assess the strengths and weaknesses of the system level on a composite table Depending on the fact that the analyst will form a rating system from + or-1 to + or -5 to determine

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strengths or weaknesses for each competitor, this order may vary time due to the development or decline of each business

Step 3: Identify intangible resources that need to be built and developed

In fact, an enterprise with this intangible resource may lack other invisible resources or invisible resources but the invisible resources are weaker than competing companies So when analyzing and evaluating intangible resources of an enterprise, managers need to identify relevant issues, identify the causes of these resources and propose measures Construction and development in the future

In a nutshell, the resources of each business are varied Depending on the characteristics, activities, scale, structure and characteristics of these resources in the business varies A comparative analysis and proper assessment of existing and potential resources in each period will help the corporate executives see their progress in the development process At the same time, identify a strong correlation

of resources with competitors to provide a basis for material competitive strategies, decide on opportunities or limit risk in a timely business environment

1.2.4 Development of strategic options

On the basis of defining the mission, objectives of the enterprise, analyzing the internal and external environment of the enterprise, the next step is to present possible strategies for the organization This phase will use the SWOT matrix tool for analysis

A Matrix of Strengths, Weaknesses, Opportunities, and Challenges, also known as SWOT Matrix, provides a tool for analyzing, shaping, selecting and reviewing strategic, Position and strategic orientation of the business In fact, the SWOT Analysis Matrix is a combination of strengths, Weaknesses, Opportunities and Threats to form four types of strategies, namely:

Weaknesses

List the most important weaknesses from the internal corporate environment

Opportunities

List the most important

opportunities from the

environmental summit

outside the enterprise

SO strategy: use internal

strengths to exploit the opportunities of the external environment

WO strategy: take advantage of outside opportunities to improve internal weaknesses

Threates

List the most important

risks from the side-tables

ST strategy: use the strengths of your business to avoid or reduce threats from the outside world

WT strategy: this is a

defensive strategy to reduce internal weaknesses and avoid external threats

Source: Humphrey, Albert (2005)

1.2.5 Analysis and selection of strategy

After the combined phase there will be available feasible strategies This phase uses a single tool, the Quantitative Strategic Planning Matrix (QSPM) The QSPM matrix uses information in the first phase, evaluating objectively the business strategies that can be selected in the second phase to determine which strategy is optimal for the enterprise

This is a powerful quantitative tool that demonstrates the attractiveness of selective strategies and thus provides an objective basis for selecting specific strategies The QSPM matrix uses the information derived from the SWOT matrix, which evaluates objectively the alternative strategies The QSPM matrix development process includes the following steps:

Selected strategies Strategy 1 Strategy 2 Strategy 3

Internal factors

External factors

Total

Source: David, Fred (1986, 2009)

The QSPM matrix development process includes the following steps:

 Determine the Attractiveness Score (AS), which represents the relative attractiveness of the strategy to the other strategies, in each case: scores are rated from 1 to 4, where point 1 Points are not attractive, point 2 means less attractive, point 3 is quite attractive and point 4 is very attractive

 Determine the Total Attractiveness Score (TAS) by row by multiplying the score in column (2) by the number of AS scores

 Calculate the total gravity of each strategy This is the sum of the total points of interest (TAS) in the strategic column of the QSPM matrix The higher the gravity of a strategy, the more likely it is that the strategy is appropriate and desirable

1.2.6 Strategy implementation

This is an important step, turning the strategies on paper into concrete actions Based on the objective, analyze the competitive advantage, identify opportunities, challenges and weaknesses, enterprises will find solutions on human resources, financial resources, business management organization, production management and others to achieve the established business strategies In other words, it is the arrangement and arrangement of the resources of the business to successfully implement the chosen business strategy, such as:

 Mix marketing solutions: product, price, distribution, and promotion mix

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 Human resources solutions

 Solutions on raw materials

 Financial Solutions

1.2.7 Strategic inspection and evaluation

Should the strategy be implemented regularly, should the strategy be implemented as planned? There are many reasons why strategies fail to achieve their goals These are caused by changes in the environment or by the lack of human resources Therefore, it is necessary to adopt feedback systems and measures

to monitor, monitor and evaluate implementation

To answer the question of business strategy of the business still relevant to the business environment? There may also be many different methods One method that can be used is to measure business strategy by matrix According to the matrix evaluation method, first and foremost, questions and answers related to the key elements of the business environment (external environment and internal environment) must be set up and answered The answers to each type of question can be grouped into a comprehensive business strategy review matrix as shown in the table below:

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Figure: 1.5 Business Strategy Evaluation Matrix

Inspection and evaluation of strategy

Inspection of operational plan Adjustment of operational plan

Adjustment of deployment plan Inspect and implement

Continue to deploy in currect direction

Are there any differences to adjust?

Model of assessment and adjustment of business strategy

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Simultaneously respond to the following questionnaires:

Table 1.3 Matrix of Strategic Business Review

Are the objectives of the enterprise implemented?

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1.3 The concept of real estate and property characteristics

1.3.1 Real estate concept

So far most countries in the world have classified properties according to Roman law, ie classifying properties as “real estate” and “estate” So real estate is not only land, wealth in the earth, but also everything created by human labor attached to land such as construction works, trees and others For our country also approached the way to put such a problem, the Civil Code has defined “real estate is non-movable property, including land, housing, construction works attached in combination with land, including assets attached to such dwelling houses or construction works; other assets attached to land and other assets as prescribed by law” (Article 181) Real estate has different characteristics compared to other goods such as fixedness, increasing value, individuality and value depending on the purpose of use and others In particular, fixedness has modification between real estate goods and other goods This feature requires trading and transaction management practices different from other commodity markets With other goods, the seller, the buyer can easily bring the goods to any place but with real estate, the owner of it must move to the property Real estate goods can not be marketed (markets, supermarkets) for display as other goods, which must be introduced through description by model, image or design drawings The fixed property also gives the property the “location” and “localism” very high At the same type of property, but in different locations are different value For the property of the same size Likewise, the same type of real estate but large urban real estate is much more valuable than real estate in small urban areas The fixedness poses the problem of regulating the real estate market differently from other commodity markets, with normal goods being able to adjust supply and demand by moving goods from one place to another But with real estate must adjust the supply - demand through the forecasting and planning in accordance with conditions In addition, real estate has other characteristics, such as individuality and scarcity, especially land, durability, affect each other and so on

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Real estate business strategy is the way and method of competition of real estate business enterprises It specifies the type of real estate product or service that the business undertakes, the size of the business, the resources, the profitability as well as the development prospects of the business It ensures the business plan does not go astray to help businesses have a firm and secure position in the real estate business, actively adapt to the competitive environment

1.3.2 Characteristics of real estate business

 Activities are sectoral and regional All business activities must be related to the location of the property, each location of the different property will bring income to the owner and trader different interests Businesses in different locations and regions are different, and the business model of the place can not be imposed elsewhere The surrounding environment is important for every property value

 Large and long-term capital investment Real estate has long-term use, each real estate will have the physical life and economic life Economic life will end when the market conditions and operating conditions are normal, but the cost of using real estate is equal to the benefits from the property In the field of real estate business requires large capital investment, during the long-term investment Firms with capital advantages are highly competitive

 Sensitive activities, strongly influenced by laws and policies The state manages all real estate from land to buildings and assets on land through laws such as land law, construction law, business law and others

 Multi-sectoral operations and specific business activities One of the characteristics of the real estate market is the imperfect market, incomplete information for market participants and slower supply response Bridge complex, subject to many influences of spiritual factors, habits, habits and others

1.3.3 Impact of real estate business characteristics on building business strategy

The characteristics of the real estate industry mentioned above lead to the development of business strategies, managers need to study the business environment, especially the legal changes, bank interest rates, planning At the same

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time, with the thesis entitled “Building business strategy in real estate for Company

59 of the Ministry of Defense” on the basis of the theories mentioned in 1.1.4 At the level of strategy, business strategy is defined as business unit level strategy