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VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES DO VAN DUNG ENHANCING THE COMPETITIVENESS FOR TRAPHACO JOINT STOCK COMPANY IN THE PROCESS OF INTERNATIONAL ECONOM

VIETNAM ACADEMY OF SOCIAL SCIENCES

GRADUATE ACADEMY OF SOCIAL SCIENCES

DO VAN DUNG

ENHANCING THE COMPETITIVENESS FOR TRAPHACO JOINT STOCK COMPANY IN THE PROCESS OF INTERNATIONAL ECONOMIC INTEGRATION

Major: Business Administration Major code: 9.34.01.01

PHD THESIS SUMMARY BUSINESS ADMINISTRATION

HANOI - 2019

THE RESEARCH IS COMPLETED AT

VIETNAM ACADEMY OF SOCIAL

SCIENCES

Scientific Supervisor 1: Assoc Prof Chu Duc Dung

Educational Institution: Institute of World Economics and Politics

Scientific Supervisor 2: Prof PhD Nguyen Thiet Son

Educational Institution: The Institute of Southeast Asian Studies

Reviewer 1: Assoc Prof Nguyen Xuan Dien

Reviewer 2: Assoc Prof Doan Ke Bon

Reviewer 3: Assoc Prof Nguyen Chien Thang

The PhD Thesis is protected before the Academy-level thesis Dissertation Council meeting at Graduate Academy of Social Sciences – Vietnam Academy of Social Sciences at hour…minute, day…month… 2019

The thesis can be found at:

- National Library of Vietnam

- The Social Science Library

INTRODUCTION

1 The urgency of the topic

In the current context, competitiveness and competitiveness have become an important issue for any business When the economy grows faster, the process of international economic integration is deeper and stronger, requiring indigenous enterprises to participate in competing with international enterprises right on their national territory Enterprises

in the pharmaceutical industry play an important role in the field of care and protection of public health and a major contribution to national economic development However, being an industry with its own characteristics of products, production technology, customer market and state management, so the development of pharmaceutical enterprises is quite sensitive to the reactions of the market The socio-economic development has strongly led to the higher and more diversified demand for pharmaceutical products, and pharmaceutical enterprises have many development opportunities but also many challenges The challenge of pharmaceutical enterprises is the increasing level of competition in the rapidly changing business environment, each business not only competing with domestic businesses or products but also competing with businesses Foreign, imported products Compared to other businesses, the competitive criteria of pharmaceutical companies are getting higher and more diverse In Vietnam, the consumption of pharmaceutical products depends largely on the physical, psychological characteristics of customers and markets, so to dominate the competition, pharmaceutical companies need to be cautious when determine the selection of competitive tools and criteria

Traphaco Joint Stock Company (Traphaco) is one of the few most prestigious pharmaceutical enterprises in Vietnam for many years, according to the evaluation report of Vietnam Assessment Report Joint Stock Company over the years, Traphaco There have been certain great contributions in Vietnam's pharmaceutical industry However, in recent

years, the number of pharmaceutical enterprises has been increasing, including foreign pharmaceutical manufacturers Although it is a large and reputable enterprise in Vietnam, Traphaco itself needs to quickly assess and recognize the competitive and advanced capabilities in the face of increasing competitive pressures from big competitors Its competitiveness to find answers to questions about what to do to survive and develop sustainably in the next phase

In-depth research on improving competitiveness of Traphaco is the basis for the company to continue to find new solutions to improve its competitiveness In addition, this study also helps domestic researchers, experts, leaders, managers to better understand the status of improving competitiveness, about the difficulties that Traphaco and other Other pharmaceutical businesses are facing in current conditions At the same time, suggest and recommend to the State and the pharmaceutical management agency to make appropriate policies and support more for the sustainable development of pharmaceutical enterprises Therefore,

the author chose the topic "Enhancing the competitiveness of Traphaco Joint Stock Company in the process of international economic integration" as his doctoral research topic The research

results will directly help the management and managers of Traphaco understand the situation, have more optimal solutions to improve the competitiveness, further contribute to the development of the Vietnam’s pharmaceutical industry in the period of international economic integration

2 Purpose and mission of research: Focus on clarifying the

status of activities to improve competitiveness of Traphaco Joint Stock Company, find out the causes of the limitations, propose some solutions and recommendations to raise higher competitiveness for Traphaco in the period of international economic integration

3 Object and scope of the study

3.1 Object of research: To enhance the competitiveness of Traphaco Joint Stock Company

3.2 Scope of research: (1) About research time: The dissertation

analyzes the current situation of case study of Traphaco for 5 years from 2014-2018 Proposing solutions and recommendations to further improve the competitiveness of Traphaco's vision to 2030; (2) About the survey subjects: The dissertation solicits opinions of two groups of subjects: Traphaco's employees and managers are the owners of drugstores distributing Traphaco's products in all three regions of North, Central and South

4 Research Methods

Common research methods used include: descriptive statistics; analysis, synthesis, comparison; expert interview; qualitative research and quantitative research

5 New contribution to the science of the thesis

The thesis has systematized the arguments on research issues and given its own views on competitiveness and competitiveness By the method of expert interview, group discussion, the thesis presents its own views on activities to improve the competitiveness of pharmaceutical enterprises and the evaluation criteria Enhancing the competitiveness of pharmaceutical enterprises not only focuses on improving resources: Finance; Management and administration capacity; Quality of personel; Level of machinery and technological equipment; But also improve the research and development capacity; Ability to create relationships and especially enhance corporate culture

The thesis has studied and learned experiences to improve the competitiveness of a number of international pharmaceutical companies and corporations and learned lessons for Traphaco Joint Stock Company and Vietnamese pharmaceutical enterprises

Improving competitiveness is the new research content for Traphaco Joint Stock Company in the context of international economic integration Research results have pointed out some difficulties and limitations on improving competitiveness related to: (i) Financial mobilization capability; (ii) Activities of promoting initiatives and improvements of human resources; (iii) Marketing and communication capacity; (iv) Building relationships with investors; (v) Research and development work

The thesis proposes a number of key solutions to further improve the competitiveness of Traphaco Joint Stock Company, in which, the new solution is suitable to the current practical context that needs to focus on improving Marketing capacity Development of new products; Developing distribution channels; Enhancing communication is the focus of this solution

6 The scientific and practical significance of the thesis

Through analyzing the topic to contribute a part of the theory about capacity building of pharmaceutical enterprises The dissertation analyzes and evaluates the current situation of high-quality research of Traphaco, proposes solutions and recommends to improve the competitive capability for Traphaco in the period of international economic integration

7 Structure of the thesis

In addition to the introduction, conclusion, list of references, appendices, the thesis includes five chapters: Chapter 1: Overview of research projects related to the topic; Chapter 2: Theoretical and practical basis for improving the competitiveness of pharmaceutical enterprises; Chapter 3: Research methods; Chapter 4: Current situation

of improving competitiveness of Traphaco Joint Stock Company; Chapter 5: Solutions to improve competitiveness for Traphaco Joint Stock Company

CHAPTER 1: OVERVIEW OF RESEARCH WORKS RELATED

TO THE TOPIC 1.1 Overview of research situation in the world

1.1.1 Research works on enterprise’s competitiveness

The theme of competitiveness and how to improve the competitiveness of businesses in the period of economic integration is studied by many scientists around the world Especially, the authors are outstanding with studies such as Birger Wernerfelt (1984); Porter (1985); Sriyan De Silva (1998); Kumar Jain, Upinder Dhar (2007); Ramona Todericiu and Alexandra Stanit (2015); Dhirendra Kumar (2016) In general, the authors' studies mainly analyze and evaluate the competitiveness according to different approaches, about businesses in developing countries The common point of the research is that the competitiveness of enterprises is factors related to the internal resources

of the enterprise, the capacity of the leader and the ability of the enterprise to use the input effectively, meet market needs

1.1.2 Overview of research works related to factors affecting the competitiveness of enterprises

In the world, there are many studies on factors affecting the competitive competence of enterprises such as Ambastha and Momaya (2004); Chi Kun, Ho (2005); Thompson, Strickland & Gamble (2007); Sauka (2015),…

1.2 Overview of domestic research on competitiveness

1.2.1 Overview of research projects on national competitiveness and business

Competitiveness of the industry is one of the topics analyzed and evaluated by many researchers, in which the outstanding researches of the authors are: Nguyen Dinh Long (1999); Than Danh Phuc (2001); Chu Van Cap (2003); Vu Hung Phuong (2008); Bui Duc Tuan (2010); Tran Thi Anh Thu (2012); Nguyen Hong Chinh (2017) In general, studies on national competitiveness and industry are evaluated by the

authors in different ways and on different areas These studies mainly analyze and summarize the theoretical basis of the competitiveness of the industry and the country, analyze the factors affecting the competitiveness of the industry and country; Assess the current state of competitiveness of one industry and those countries Since then, the research offers solutions to strengthen the overall competitiveness of the industry and the country

1.2.2 Overview of research projects on competitiveness of enterprises

In recent years, there are many research projects at ministerial level, doctoral dissertation, master's dissertation that have studied the topic of competitiveness and competitiveness for businesses The studies mainly analyze the current situation of competitiveness of research subjects, this is an important basis for researchers to propose solutions to improve competitiveness for businesses Typically, the research of the authors such as: Nguyen Vinh Thanh (2005); Vu Trong Lam (2006); Nguyen The Nghia (2007); Pham Van Cong (2009); Pham Thu Huong (2017)

1.2.3 Overview of domestic research projects on competitiveness

of pharmaceutical enterprises

Research on competitiveness in the pharmaceutical industry has been interested by many researchers and economists, especially some remarkable projects such as: Phan Thi Thanh Tam (2012); Ta Thi Thanh Mai (2015); Bui Van Dung (2016) In general, the research on competitiveness of pharmaceutical companies clarifies the theoretical basis of competitiveness, business analysis and the actual competitiveness according to SWOT matrix Thereby, the research proposes solutions to improve competitiveness for pharmaceutical enterprises in particular and Vietnam's pharmaceutical industry in general However, these studies have some limitations such as in-depth analysis of the problem, the analytical data of the studies and solutions

presented in these studies are obsolete in time, due to Therefore, the applicability of the studies has been somewhat limited

1.3 Summary of research results on the competitiveness of published works

On the basis of an overview of domestic and international researches related to the topic of competitiveness, most studies have clarified the theoretical basis of competitiveness, influencing factors to the competitiveness of research subjects Since then, the research proposes solutions to improve the competitiveness of the country, the industry and businesses through the assessment of the situation of competitiveness of the objects

1.4 Research orientation of the topic

The results of analysis of domestic and foreign studies on the topic of competitiveness indicate that the competitiveness of pharmaceutical companies has been analyzed in previous studies, but not yet deep and Analytical data in the period before 2015 Moreover, the research results

of previous works are valuable in a certain period In the current period, there has not been any in-depth analysis of the enhancement of the edge

of Traphaco Joint Stock Company In particular, in the context of international economic integration today, the business environment is constantly changing and changing constantly, requiring timely solutions suitable to the actual conditions to raise High competitiveness of Traphaco in the future Therefore, the author directed his research to study the issue of improving competitiveness for Traphaco Joint Stock Company during the period of international economic integration to solve a part of the gap in previous studies

CHAPTER 2: THEORETICAL AND PRACTICAL BASIS ON ENHANCING COMPETITIVENESS OF PHARMACEUTICAL

ENTERPRISES 2.1 Theoretical basis of competitiveness of pharmaceutical enterprises

2.1.1 Theoretical basis of enterprise competition

2.1.1.1 Competitive concept: is the ability to maintain and improve

the competitive advantage of enterprises in the consumption of products, expanding the distribution network, attracting and effectively using production factors to gain benefits High and sustainable economic benefits

2.1.1.2 Role of competition: Competition between actors plays an

important role in the development of the economy, businesses and

consumers

2.1.2 Theoretical basis of competitiveness

2.1.2.1 Competitive advantage: According to Michael Porter (2009):

"Competitive advantage is what makes a business stand out or different from its competitors."

2.1.2.2 Competitiveness: The ability to effectively exploit, manage

and use the resources of the business to maintain and develop a competitive advantage higher than competitors in satisfying the needs of customers aim to achieve sustainable production and business efficiency under changing business environment

2.1.3 The concept of international economic integration:

According to Do Duc Binh and Nguyen Thuong Lang (2008):

"International economic integration is the cohesion of the economy of each country into regional economic cooperation organizations and global, in which member countries are bound by the general rules of the whole block In general, international economic integration is the process of countries implementing open economic models, voluntarily

liberalizing trade trade, investment and other external economic activities.”

2.2 Theoretical basis for improving the competitiveness of

pharmaceutical enterprises

2.2.1 Viewpoints on improving competitiveness: These are activities

that enhance the efficient use of the enterprise's resources to create outstanding competitive advantages compared to competitors in satisfying the market's needs in order to achieve sustainable production and business efficiency in the context of changing business environment

2.2.2 Activities to improve the competitiveness of pharmaceutical enterprises

To identify activities to improve competitiveness of pharmaceutical companies, the thesis has consulted the research of the authors such as: Momaya studies (2004); Goldsmith and Clutterbuck (1992); Peters and Waterman (2007); Hudson (2001); Quian, Li (2003); Porter (1980); Ho (2005) and research in-depth analysis of the business characteristics

of the pharmaceutical industry in Vietnam in the current context, and a preliminary interview with industry experts in the form of interviewing Appendix 01 Results Refer to previous studies and synthesize expert interview ideas, the thesis has synthesized 8 criteria to evaluate the capacity of the capacity building activities of pharmaceutical companies

as follows:

2.2.2.1 Improve financial capacity

2.2.2.2 Improve management and operating capacity

2.2.2.3 Improve the quality of human resources

2.2.2.4 Improve marketing capacity

2.2.2.5 Improve the level of equipment and technology

2.2.2.6 Improve the ability to create relationships

2.2.2.7 Improve research and development capacity

2.2.2.8 Improve corporate culture

2.3 Factors affecting the competitiveness of pharmaceutical companies

Through discussions and interviews with experts, the thesis synthesizes two main groups of factors affecting the competitiveness of pharmaceutical companies to improve competitiveness:

2.3.1 Factors outside the business

External factors affecting the competitiveness of enterprises are factors that exist objectively and out of control of enterprises, but create opportunities and challenges for businesses, including : Macro environment and micro-environment

- Macro environment: Economic environment; Legal and political environment; Environmental science and technology; Socio-cultural environment; Natural environment

- Micro-environment: Pressure from industry competitors; Pressure from suppliers; Pressure from replacement products; Pressure from customers; Pressure from potential competitors

2.3.2 Factors within the business

Internal factors are internal forces of enterprises, directly impacting

on the ability to improve the competitiveness of organizations including: Organization and management qualifications; Human resources qualification; Financial capacity; Capacity to link and cooperate with other businesses; Level of equipment and technology; Marketing capability

2.4 Experience to improve the competitiveness of some pharmaceutical companies in the world

2.4.1 Experience of GSK Pharmaceutical Group - UK

GlaxoSmithKline (GSK) is one of the pharmaceutical corporations largest globally, based in the United Kingdom The success of GSK in the past few years is due to the business strategy focusing on 3 important priorities including: (1) Developing a diversified global

business; (2) Provide more valuable products, and (3) Streamline the operating system

2.4.2 Experience of Sanofi-Aventis Pharmaceutical Joint Stock Company - France

Sanofi Pharmaceutical Joint Stock Company - Aventis is one of the largest pharmaceutical companies in France Succeeding on the path of building a prestigious brand name and improving the competitiveness of Sanofi-Aventis Pharmaceutical Company is due to the company focuses

on a number of strategies such as: (1) Improve the quality of human resources force through policies for recruiting young talents, special training and career development for employees; (2) Improve marketing capacity by improving the quality of special treatment products, diversifying product categories; (3) Improve research and development capacity and (4) Improve corporate culture

2.4.3 Experience of some Chinese pharmaceutical enterprises

China is the second largest pharmaceutical market in the world, thanks to its large population and high medical needs To promote the pharmaceutical industry to develop strongly in the period of international integration The Chinese government has issued various guidelines, policies and measures to support domestic pharmaceutical enterprises to improve their competitiveness in marketing capabilities and create relationships Some typical pharmaceutical enterprises with strong support from the Chinese Government include: Sinopharm Group, GenScript Biotech Corporate, BeiGene, Jiangsu Hengrui Medicine, Yipinhong pharmaceutical

2.4.4 Lessons to enhance competitiveness for Vietnamese pharmaceutical companies

Firstly, it is necessary to enhance management and administration

capacity, innovate in governance, apply technology to effective operation and management