bui tuan tha nh to m ta t lua n a n ta final 0978

For the above reasons and with a wish to contribute to the research on the topic of competitive neutrality in the economy to find out the possibilities of applying in Vietnam, we have de

1 Necessity of the thesis

The number of state-owned enterprises (SOEs), though accounting for only less than 1%1, is the force that holds key economic sectors of the country, responsible for ensuring macro balance of the economy, public benefit, security and defense Currently, the recent trend of globalization leads to a strong penetration of enterprise into every part of the world economy, requiring a level playing field for all economic entities, including SOEs (Capobianco and Christiansen, 2011) It can be observed that competitive neutrality is a new trend in competition planning and development in many countries around the world, especially developing countries (OECD, 2012; Dordi, 2016).

In Vietnam, competitive neutrality also began to be interested in and fully aware of in the national policy system In addition to that building and innovating competition of SOEs is the prerequisite measure to ensure the positive contribution SOEs to overall economic efficiency and national competitiveness In reality, SOEs, though enjoying many incentives, their low operating efficiency leads to the fact the more monopoly they have, the less competitive their capacity is (Henning & Kou, 2018; Gershman, Roud &Thurner, 2018) Further, SOEs – the market – competitiveness is an issue that attracts the attention of most countries, including Vietnam As Vietnam is a developing country transitioning to an economic model that moves according to the objective laws of the market, the research, application and implementation of competitive neutrality in practice require a lot of time and resources.

For the above reasons and with a wish to contribute to the research on the topic of competitive neutrality in the economy to find out the possibilities of applying in Vietnam, we

have decided to choose “Competitive neutrality: Challenges and recommendations for competitive renovation of State-owned enterprises” as the subject of our thesis.

2 Research objectives

2.1 Research objectives

The thesis clarifies the theoretical basis, contributes to adding academic content on competitive neutrality, competitive naturally policy, the role of competitive naturally in competitive activities in the market economy, international integration, the role of of SOEs in the economy as well as the challenges to SOEs under the conditions of applying competitive neutrality The thesis gives recommendations for SOEs, in order to renovate competitive strategies and improve effective competition based on competitive neutrality principles.

2.2 Research missions

- Literature review on competition, competition policy, and competitive neutrality.

1 Vietnam Statistical Yearbook 2018

- Clarifying and analyzing the practice of competitive neutrality in some typical countries.

- Analyzing the practical experiences of some countries around the world about competitive neutrality, the competitive situation of enterprises in the market, especially SOEs and lessons drawn related to Vietnam.

- Studying the current situation of the competitive environment in Vietnam, primary signs of competitive neutrality and the issues posed to the competition of SOEs under the condition that Vietnam is a member of the WTO and participants in many free trade agreements of new generation.

3 Research object and scope

3.1 Research object

The research object focuses on competitive neutrality, competitive neutrality policy and competition of SOEs under the condition of applying competitive neutrality policy.

3.2 Research scope

In terms of content, the thesis focuses on research on competition of SOEs, competitive

neutrality, problems raised in application, as well as the competitive renovation situation of SOEs under the current conditions of applying competitive neutrality policy in Vietnam.

In terms of space, the thesis focuses on researching practical issues of competitive

neutrality of SOEs in Vietnam and abroad when studying the experiences about competitive renovation of SOEs in OECD countries and some other developed countries.

In terms of time, the thesis studies the current state of competitive renovation of SOEs

under the conditions of applying competitive neutrality policy in Vietnam from 2004 since the introduction of the Competition Law until 2035 on the basis of proposing solutions, recommendations for SOEs.

4 Research methodology

In order to realize the thesis, the research method used is based on qualitative research method in combination with qualitative research method The qualitative research method is conducted through case studies and expert interviews The qualitative research method is conducted through questionnaire survey, then regression analysis.

We carry out the research process through 06 steps specifically as follows:

Figure 1: Research process

After collecting data, we proceeded to process and analyze the data, especially for the survey data, after collecting; we synthesized and processed by Excel and SPSS.

5 Research questions

The research questions include:

- What are the theoretical foundations for competition, competitive neutrality and competition of SOEs under the conditions of applying competitive neutrality policy? What is the nature of competitive neutrality? Why should competitive neutrality be applied, and when

it is applied, how it will affect the competition of SOEs?

- What are the challenges posed to SOEs when implementing their competitive strategy

in the market under the conditions of applying competitive neutrality? Specifically, the current situation of competition and challenges to SOEs in Vietnam under the conditions of applying competitive neutrality?

- What solutions can be implemented to renovate SOEs’ competition under the conditions of applying competitive neutrality in Vietnam?

6 Thesis contributions

Through the research results, the thesis has made some new academic and practical

contributions Firstly, the thesis clarifies the main theoretical issues about competition and competitive neutrality Secondly, it systematizes and classifies the contents related to the

renovation of competition of SOEs under the conditions of applying competitive neutrality.

Thirdly, it summarizes many practical lessons on the experience of SOEs in the world under the conditions of applying competitive neutrality Fourthly, it focuses on analyzing and

assessing the current situation of renovation of competition of SOEs in Vietnam, from which

to review the achievements as well as shortcomings Fifthly, it proposes 05 sets of solutions

to enable SOEs successfully implement the competitive renovation process.

7 Thesis structure

Apart from the Introduction and Consolation, the thesis is structured into the following chapters:

- Chapter 1: Literature review

- Chapter 2: Theoretical issues about competition, competitive neutrality and competition of SOEs under the conditions of applying competitive neutrality policy

- Chapter 3: The current situation of competitive renovation of SOEs under the conditions of applying competitive neutrality in Vietnam

- Chapter 4: Perspectives, directions and recommendations for competitive renovation

of SOEs under the conditions of applying competitive neutrality in Vietnam.

CHAPTER 1: LITERATURE REVIEW OF RESEARCHES RELATED TO

THE THESIS SUBJECT 1.1 Literature review of international researches

The thesis ascertains the research situation abroad according to four groups of contents With the first content, regarding SOEs, there have been many works to clarify the concept and function of this type in the economy, such as those of the OECD (2015); Putnins (2014) About the second content, concerning studies on concepts, principles, and practices to promulgate and implement policies to the principles of competitive neutrality in the member countries At the same time, it should be mentioned here that studies by Capobianco (2011), Fox and Healey (2013) on the role and influence of antitrust law, the premise for the application of anti-competition measures in countries, including anti-competitive practices at the state and local levels.

Regarding the application of competitive neutrality and challenges posed to SOEs, Stefano (2018) analyzes that whether competitive neutrality principles of SOEs can be applied by international arbitration courts in dispute settlement between investors or not Zwalf (2017) clarifies how to apply competitive neutrality policy in the guidelines on public- private partnership (PPP) in eight G20 economics Rennie and Lindsay (2011) give a comprehensive overview of the framework of competitive neutrality of the Commonwealth

of Australia as well as individual countries.

With the last key content on competitive renovation of SOEs, recent studies, such as study by Bortolotti et al (2018), investigates the impact of state ownership on enterprise renovation, which is measured by the quantity, quality and value of patents Belloc (2014) focuses on operating performance, more specifically, technological renovation activities of SOEs in manufacturing industries, where there is a relatively intense competition between SOEs and private companies.

1.2 Literature review of researches in/about Vietnam

In Vietnam, the number of researches on competitive neutrality is still very limited, mainly centered around competition, competitiveness, competition-related issues and SOE restructuring Currently, there are not many significant research works dedicated to competitive neutrality However, there are a few researches that at some level and in certain aspects are on or related to competitive neutrality, such as OECD Assessment of Competition Law and Policy: Vietnam (2018), “Status and solutions to promote restructuring, renovation and improvement of SOE operating performance” by Dang Quyet Tien (2018), etc.

The most typical is the research works by Tang Van Nghia et al going deeply into the issue of competitive neutrality and competitive neutrality implementation in Vietnam.

Specifically, “Competitive Neutrality: Challenges on the Application for Vietnam” by Tang Van Nghia and Bui Tuan Thanh (2017); “Competitive Neutrality: Challenges on the Application for Vietnam” by Tang Van Nghia (2016).

1.3 Research gaps

On the basis of the literature review above, we have found that:

Firstly, there are currently quite a lot of foreign documents researching on SOE topics

as well as the issue of competitive neutrality in these enterprises, but most of them are conducted in developed countries such as the United States, Australia, G20 countries, where the competitive neutrality policy has been applied quite successfully, creating a level playground between SOEs and private companies.

Secondly, international organizations such as OECD and UNCTAD also have

numerous reports on the topic of competitive neutrality, both in developed and developing countries, including Vietnam These reports, however, are mostly documents, legal regulations, general frameworks and recommendations serving as guidelines so that countries

at similar level can apply flexibly in their countries, without really focusing on researching the role and the impact of competitive neutrality on SOEs.

Thirdly, there are not yet many studies focusing on in-depth analyses of competitive

neutrality in an adequate manner, but only on a small scale, such as within a certain economic sector, or the content of competitive neutrality in agreements, such as CPTPP, FTA…), or in some developed countries.

Fourthly, scholars have recently focused on SOEs’ competitive renovation, but the

number of studies is still quite modest.

Fifthly, for domestic studies, we found that the number of studies of the issue of

competitive neutrality is not great, not intensive The focus of most the documents is on SOE issues such as characteristics, role, operation performance, governance/administration…

In a general way, it can be seen that the studies on competitive neutrality is still limited

in both quantity and depth There are many contents, on both theoretical and practical bases that need to be addressed, requiring further research on this issue, particularly at SOEs, in the

multi-sector economic environment Being aware of the important role of competitive neutrality in general and competitive neutrality in SOEs in particular, as well as the role played by competitive neutrality in sustainable economic development and a healthy competitive environment for all enterprises, our research orientation approaches are from SOEs in such key areas of society as public services, telecommunications, healthcare…

1.4 Approaches of this thesis

This thesis focuses and analyzes the competition of SOEs that need to be renovated under the conditions of applying competitive neutrality policy in Vietnam in recent years To conduct this research orientation, first and foremost, the thesis classifies the theoretical issues

of competition, competitive neutrality and competition of SOEs under the conditions of applying competitive neutrality policy For competition, the thesis only refers to a number of theories related to competition of enterprises, including theoretical views on industrial organization, theoretical view on strategic management, theoretical view on resources, and theoretical view on competition according to Marketing approach.

In this study, we approach the main aspects of competitive neutrality under the basic principles of OECD (2012) The focus of our research is on the competition of SOEs under the conditions of applying competitive neutrality policy There are eight in-depth contents, including (i) Research and selection of target markets, (ii) Price strategy, (iii) Price strategy, (iv) Accompanied service strategy, (v) Channel strategy, (vi) Trade promotion strategy, (vii) Communication strategy, and (viii) A number of complementary issues.

Further, this study also aims to study international experiences in competitive renovation of SOEs under the conditions of applying competitive neutrality policy of a number of countries such as China, Malaysia and Australia, from which to draw some lessons

of experience for Vietnamese SOEs in competitive renovation when applying competitive neutrality policy.

Based on the literature review, we identify the issues posed to SOEs when applying competitive neutrality policy and studying some typical areas related to the competitive renovation of Vietnamese SOEs, from which to propose a number of solutions and recommendations to renovate competition of Vietnamese SOEs in time to come.

CHAPTER 2: THEORETICAL ISSUES ABOUT COMPETITION,

COMPETITIVE NEUTRALITY AND COMPETITION OF SOES UNDER THE CONDITIONS OF APPLYING COMPETITIVE NEUTRALITY POLICY 2.1 Overview of competition and competitive renovation

2.1.1 Overview of competition

2.1.1.1 Concept of competition

From the point of view of Ely (1901); Melnyk and Yaskal (2013); Tang Van Nghia (2013) …, we study competition under the business perspective to get advantage for us by gaining customer acceptance when accessing the supply or distribution of products, services

of ours.

2.1.1.2 Types of competition

There are three types of competition, especially as follows: (i) Perfect Competition, (ii) Monopoly, and (iii) Imperfect Competition.

2.1.1.3 The role of competition in economic development

Competition plays six important roles in the market economy Firstly, competition is the driving force for socioeconomic development Secondly, competition encourages the

application of new science and techniques, technology improvement for effective business.

Thirdly, competition meets the needs of consumers Fourthly, competition ensures the most effective use of economic resources Fifthly, competition plays a role in regulating supply and demand relations Sixthly, competition plays a role in stimulating human creativity and

renovation.

2.1.2 Theoretical views related to enterprise competitive renovation

2.1.2.1 Industrial organization framework

Competition perspective according to the theory of Industrial Organization was developed in the late 19th century and early 20th century Theoretical view of industrial organization is generally expressed through the relationship of Structure of Industry, Conduct/Strategy of the enterprise and Performance of the industry Theoretical view of organizational economics focuses on analyzing and comparing enterprises with competitors, along with aspects of their competition (Porter, 1985) According to the theory of industrial organization, performance or development and renovation of competition mainly depend on the industrial structure in which enterprises are operating Therefore, depending on the situation of the industrial structure, enterprises will have appropriate strategic planning to achieve the highest performance in building, developing and renovating their competition.

2.1.2.2 Strategic management framework

Theoretical view of strategic management has been studied and developed by many scholars such as Porter (1980), Hofer and Schendel (1978), Rumelt (1974) According to these authors, different types of strategies allow enterprises to choose the right general appropriate strategy to deploy in a business environment to achieve certain competitive goals Theoretical view of strategic management consists of a system of diverse governance perspectives and practices enabling enterprises to build, develop and renovate competition against the constantly changing background of the world economy According to the theory

of strategic management, enterprises need to implement competitive change, renovation to refine their position in the market as well as respond to changes in the business environment.

2.1.2.3 Resource theory

- Resource-Based View (RBV): According to RBV, the performance of building, developing and innovating competition of enterprises needs to come from internal resources This theory focuses on the relationship between internal resources and at the same time refers

to the ability to link internal capacities of the enterprise with factors of the external environment in corporate competition.

- Theory of knowledge: According to Knowledge-based view (KBV), knowledge is the most important resource in building, developing and innovating competition of enterprises.

- Core competency theory: According to Prahalad & Hamel (1990), core competency is

at the heart of business strategy, ability to build, develop, renovate competition, and create profit of the enterprise.

- Dynamic capacities theory: That dynamic capabilities-based view emerged has overcome the shortcomings of ignoring the market dynamic process of the classic economic model According to Leonard-Barton (1992), dynamic capacities reflect the capacities to build, develop and renovate competition under a new and more creative form in historical conditions and current market position.

2.1.2.4 Competitive marketing approach

According to theoretical view of competitive marketing approach, enterprises need to rely on the market, must understand customers and well satisfy customer needs; that is the decisive factor to create success in building, developing and renovating competition Under this perspective, building, developing and renovating competition mean winning, retaining and attracting customers To compete effectively, the enterprise must consider the systems and the competition, including its own characteristics as a business.

2.2 Overview of competitive neutrality and SOEs

2.2.1 Overview of competitive neutrality

2.2.1.1 The emergence of competitive neutrality

Until now, the scientific idea of competitive neutrality has undergone a process of remarkable development in research and legal practices in many countries Modernizing, harmonizing national economic policies and competition policies cannot go without theoretical points of competitive neutrality at the present time.

2.2.1.2 Concept of competitive neutrality

In this thesis, competitive neutrality implies legal regulations on environmental reform

in which SOEs and the private sector participate and aims to promote effective competition among economic sectors by minimizing the competitive advantages that SOEs can enjoy over private enterprises.

2.2.1.3 The role of competitive neutrality

The role of competitive neutrality is shown in the following aspects: Firstly, ensuring fairness and equality of the competitive environment Secondly, improving the efficiency of resource allocation Thirdly, increasing the harmony in the business environment Fourthly, competitive neutrality not only plays an important role for enterprises but also brings benefits

to consumers Fifthly, contributing to perfecting competition policy Sixthly, contributing to domestic economic development Seventhly, increasing the competitiveness of enterprises.

2.2.1.4 Key aspects of competitive neutrality

OECD (2012) expressly states that the challenges are also principles in applying

competitive neutrality, specifically: Firstly, Streamlining the operational form of government business Secondly, Identifying the costs of any given function Thirdly, achieving certain Commercial rate of return Fourthly, Accounting for public service obligations Fifthly, Tax

Neutrality Sixthly, Regulatory Neutrality Seventhly, Outright subsidies and Debt neutrality.

Eighthly, Public Procurement.

2.2.2 Overview of SOE competition in a competitive neutrality environment

2.2.2.1 Concept of SOEs

In this thesis, we approach SOEs as enterprises where the State holds 100% of the charter capital or shares, the equity capital is dominant and the State controls to a certain extent the decision-making process of the enterprise.

2.2.2.2 Characteristics of SOEs under the perspective of competitive advantage

SOEs, under the perspective of competitive advantage, are basically characterized by being equipped with and holding important resources of the State; being entitled to use land, natural resources, even in many areas, being identified as monopoly; to profit maximization

in many cases, they are not necessarily be required to perform…

2.2.2.3 Factors influencing the competition of SOEs

The group of external environment factors includes: economic environment; legal and political environment; and industrial environment The group of internal environment factors includes: financial capacity of the enterprise, science and technology level; and human resources.

2.2.3 Impact of applying competitive neutrality policy on competition of SOEs

The application of competitive neutrality policy has a fundamental and important impact on the competition of SOEs, thereby creating challenges for SOEs in the context of competitive innovation Specifically, the application of competitive neutrality policy affects the competitiveness of SOEs In addition, it also affects the production and business activities

of SOEs It is noteworthy that the application of competitive neutrality affects the management apparatus of SOEs, thereby impacting on the competition of these enterprises.

At the same time, competitive neutrality policy has an impact on senior human

resources/leadership of SOEs Further, applying competitive neutrality policy also affects the quality of human resources at SOEs (Tang Van Nghia, 2017).

2.3 Specific competitive activities of SOEs under the conditions of applying competitive neutrality policy

Activities of implementing competitive strategy that SOEs need to renovate include:

2.3.1 Researching and choosing target markets

- Market research: The market renovation research process consists of 3 steps: (i) renovating information collection, (ii) processing information, and (iii) making the right, appropriate strategic decisions, policies and plans.

- Market targeting: Market targeting involves market segmentation and market targeting.

2.3.2 Product strategy

Product values ​ ​ are expressed in five levels (Kotler and Keller, 2006): (i) core benefit; (ii) basic product; (iii) expected product; (iv) augmented product; and (v) potential product In SOEs’ competitive renovation under the conditions of applying competitive neutrality policy, their product strategy will have to focus on (i) product quality or core benefit, (ii) product design, packaging, (iii) building brands, trademarks, and (iv) researching and developing new products.

2.3.3 Pricing strategy

Under the conditions of applying competitive neutrality policy, SOEs can apply one or

a combination of the following three basic methods: Customer value-based pricing; Competition-based pricing; and Cost-based pricing.

In order to renovate competition in the context of competitive neutrality, SOEs will have to: (i) implement a corrective strategy for the market segmentation through 4 phases, (ii) implementing a discount strategy, (iii) conducting a discount, (iv) conducting penetration pricing, and (v) managing output to predict purchasing behavior by customers and competitors.

2.3.4 Accompanied Service strategy

Under the conditions of applying competitive neutrality policy, SOEs will have to: (i) renovate and develop accompanied services on the basis of supplementing and improving capacities, features or perfecting key products and services; (ii) have a deeper understanding

of customer shopping behaviour; (iii) diversify accompanied services and upgrade existing services to bring better customer experience; and (iv) increase the training of staff, especially frontline staff - who have direct contact with customers, instead of production staff (Frei, 2008).

2.3.5 Channel strategy

According to Wright (1999), there are three approaches to making formal decisions on the goals of the distribution channel, i.e.: mass distribution (or intensive distribution); selective distribution; and exclusive distribution To renovate competition in the context of competitive neutrality, SOEs will be more proactive in product distribution to penetrate deeper into the market, expand market share and improve corporate reputation Fundamentally, in order to compete with private companies, SOEs, when building a distribution system, will have to define 3 geological limits: general limit (defined for the enterprise as a whole), area limit (defined for distribution units), and location limit (defined for points of sale) In terms of distribution form, in the context of competitive neutrality, SOEs will have to constantly renew distribution channels to suit the needs and tastes of customers as well as changes in the market.

2.3.6 Trade promotion strategy

In the context of competitive neutrality, SOEs often consider the two-way trade promotion strategy of "pull" and "push" In the context of competitive neutrality with private firms, according to Kerin et al (2003), in order to build an effective trade promotion strategy, SOEs need to identify the following factors: (i) target audience, (ii) objectives of the trade promotion program, (iii) budget for Marketing, (iv) selection of Marketing form, (v) location and means of running the trade promotion program, (vi) time for running the trade promotion program, (vii) execution of trade promotion program, and (viii) promotion assessment.

2.3.7 Communication strategy

In the context of competitive neutrality, SOEs will have to renovate from thinking to the way of implementing communication strategy Specifically as follows: (i) defining the target public group, (ii) defining the communication goals, (iii) design the communication message, (iv) choosing the media, (v) defining the budget for communication, and (vi) assessing the results of communication activities.

2.3.8 A number of complementary issues

In the context of competitive neutrality, SOEs will have to pay attention to a number of complementary issues to improve their competitiveness in the marketplace, specifically: management and governance capacity; production and operation technology level; human resource management and development; development of core competencies; and building dynamic capacity.

2.3.9 Research model, hypotheses and measurement of variables

2.3.9.1 Research model and hypotheses

Research model is built specifically as in the figure below Proceeding from the research model, 08 research hypotheses are developed.

Figure 6: Theoretical research model

2.3.9.2 Research variables and scales

In this study, there are 08 independent variables that are related to competitive renovation under the conditions of applying competitive neutrality policy, including: (i) Research and selection of target markets; (ii) Pricing strategy; (iii) Product strategy; (iv) Accompanied service strategy; (v) Channel strategy; (vi) Trade promotion strategy; (vii) Communication strategy; and (viii) A number of complementary issues These independent variables are measured by the assessment of Vietnamese SOE managers on the status of factors and their impact on the performance of production and business activities of SOEs according to a 5-point Likert scale.

2.4 International experiences and lessons for Vietnam

2.4.1 International experiences

The thesis studies the experiences of countries with conditions quite similar to Vietnam's economic characteristics and economic development level (such as China, Malaysia); or having been a pioneer in applying completive neutrality and renovation policies of SOEs (such as Australia).

2.4.2 Lessons for Vietnamese SOEs

Some lessons of experience can be drawn are as follows: Firstly, product strategy is a strategy at the heart of the overall competition strategy of SOEs Secondly, under the

conditions of applying competitive neutrality policy, most SOEs have consciously formulated and selected product distribution strategies, diversified distribution channels and established

The production and business performance

of the enterprise

H2 H3 H4 H5 H6 H8

markets(X1)

distribution networks themselves both at home and abroad Thirdly, SOEs of these countries

regularly organize training courses for their officials and employees, enabling them to improve their knowledge and skills to serve their jobs.