Building a plan for managing changes in vietfracht

In other words, Vietfracht expects to become one o f the leading shipping corporations in terms o f high business performance, high quality services, high brand name, and high trust in t

fo r managing changes in Vietfracht

Supervisor: Prof Dr Lars Torsten Erikkson

Locaì Supervisor: Dr Do Tien Long

H anoi, January - 2015

During 24 years working at Vietfracht, with 10 years o f being a member o f the com pany’s directorate, I have always hoped to vvrite a scheme for Vietfracht’s development in the íuture Hortunately, with the knowledge that I learnt from the teachers at MPPM 07 course and especially with the help and encouragement from Prof Dr Lars Torsten Eriksson (Uppsala University, Svveden), Dr Do Tien Long (VNU University o f Economics and Business, Hanoi National University), with the urge o f changing Vietfracht according to the govem m ent’s businesses restructuring policy Today, I have íìnished the

essay “ Building a plan for managing changes in Vietíracht” and I hope it

will be an important document to guide Vietfracht through crisis and continue

to grow in the time vvhen Vietnam is signiĩicantly integrating in the w orld’s economy

Pirstlv, I would love to express my sincere gratitude to Prof Lars Torsten Eriksson and Dr Do Tien Long, who directly guided and helped me to complete this Master Program in Public M anagem ent’s thesis I aỉso vvant to send my thanks to the teachers; VNƯ University o f Economics and

Training and Educatiotr, triends, colleagues who helped me during the time I

studied and completed the thesis

I express heartíelt thanks to Vietfracht’s board o f directors, managers and staffs, the companies, organizations and individuals that assisted me in collecting datas and documents for researching and vvriting the thesis

Finally, I am grateful for my family and iriends’ encouragement and support, vvhich helped me focusing on researching and completing my thesis

Many thanks to you!

Hanoi, November lOth, 2014

VVriter

Ngo Xuan Hong

Title: Building a plan fo r nianaging changes in Vieựracht

Level: Final assignm ent fo r M aster Program in Public Management

A u th ors:NgoXuan Hong

Svvedish supervisor: Prof Dr Lars TorstenErikkson

Local supervisor: Dr Do Tien Long

Date when the thesis is presented: 2014 - December

Aim: The research creates plan for developing Vietỉracht in the future In detail, the research is to analyze the present situation o f Vietfracht, things that Vietíracht expect to change in the future, reasons for the changes, support and protest forces tovvard the changes, the capacity and willingness o f Vietfracht’s leaders in conducting the changes, the mechanisms and measures ưsed to support the changes and the plan that Viettracht need to follow to achieve tuture changes

M eth o d :T h e research uses secondary data from the íìnancial statements, annual m anagem ent reports o f Vietữacht, reports on reviewing the World Economy and V ietnam ese G overnm ent Reports on Vietnam Economy and Society M oreover, the research ưses primary data from interviews o f

V ietfracht’s key em ployees and leaders to clarify the support forces, the protest íorces in the changing process, the capacity and the vvillingness in changing o f V ietfracht’s leaders, and strengths, vveaknesses, opportunities and threats o f the Corporation

The researcher uses: (1) M IO M odel to have a general insight on present situation and analysis o f the future o f Vietíracht; (2) The PEST framework to analyze how political tầctors, economic tầctors, social íầctors and technological tactors are changing and are likely to change in the future then draw out implications for Vietfracht bascd on those analysis; (3) SWOT analysis to analyze strengths, weaknesses, opportunities and threats o f Vietfracht,from that, it can help to choose a suitable strategy for the changes

vvillingness in V ietfracht’s leader change; (5) The Change Kaleidoscope to understand the capacity and vvillingness o f V ietfracht’s leaders in conducting these changes, the m echanism s and m easures that are used to support these changes; (6) The C hange Model including 8 steps o f Kotter (1995) to build the plan for changes o f V ietữacht.

R csu lt & C o n c Iu s io n s:L e a d e rs o f Vietfracht recognize that the company needs to conducts five changes in the future

Firstly, V ietữ ach t maintains and improves business operations o f sea transport sector at present by assigning additiona! tasks to the divisions or departments o f Container agencies in branches and subsidiary companies in

o rd er to tìnd out n e w c u sto m e rs for the co m p an y 's Container tleet

Secondly, the Corporation gradually liquidates and sells existing dry cargo vessels o f the C o rp o ratio n w ith p r io r itiz in g old vessels h av in g p o o r techn ical

condition and vveak capability

Thirdly, it applies m ethods o f loan purchase or hire purchase o f vessels in order to form and d e v e l o p the inland Container transport vessels, and an initial amount o f at least 02 Container ships under 15 years old and 700 TEU size built by Japan or Europe The Corporation sets up the inland Container

sh ip p in g routes w ith w e e k ly sc h ed u les and it m ust associates with Container

Hochiminh City

Fourthly, the Corporation continues to gradually choose human resources with high e x p erien c e for o p eratio n , m a n a g e m e n t, Container ship conduction in order to meet com plex jo b s for sea transport block and focus much on training and retraining for existing em ployees to meet vvork requirements

Lastly, V ietíracht positively uses the modern application o f information tech n o lo g y a n d d e v elo p s Service qu ality m an a g em en t system to enhance the competitive ability in the maritime industry and meet the increasing requirements o f customers

this thesis to:

- Hxtend the scope o f researching with a group o f Vietnam’s shipping companies From that, build a plan o f restructuring the VietnarrTs shipping companies to get over the global economy crisis, especially in this situation vvhen V ietnam ’s economy is still unstable and the com panies's opportunities

to approach the sources are limited

- Research more about the lead er’s role in Vietnam’s shipping com panies’ restructuring process Focus more on analyzing of: (1) orientating the changes

hy building long-term plans and strategies; (2) controlling all effects and manage the risks in the vvhole restructuring process

C on tribu tion o f the thesis: The thesis has some contributions.

Firstly, by building the plan for management changes, Vietíracht certainly will face the diffĩculties to achieve new successes, become the leading company in maritime and logistics industry in Vietnam, and be able to compete with regional logistics enterprises In other words, the thesis helps managers o f Vietfracht to have a valid reterence instrument for proposing a plan o f management changes in the future

Secondly, there are a few researches o f studying on the Vietnamese maritime industry in general and Vietíracht in particular Thereíore, the thesis contributes to an increase in literature o f evaluating the Vietnamese maritime industry in general and planning management changes o f Vietíracht in particular

Thirdly, the thesis becomes a research and a construct for restructure project

o f the Vietnamese state-owned shipping companies

Fourthly, the thesis contributes to acceleration o f the plan tor restructuring the State Capital Investment Corporation (SCIC)

Lastly, the thesis is an important document to help investors have necessary information to make right investment decisions on Vietíracht

Key w ords: Vietíracht; Changes; Plan; Maritime; Logistics; Future & Leadership

Chapter 4 C o n c lu sio n s 47

4.1 Some reílections on the theory u se d 47

4.2 Retlections on the practical contribution to Vietíracht and other companies 48

4.3 My reílections on lessons leaming in research 50

R eterences 55

Appendix 1 58

Ọuestionnaires used in intervievvs 58

Appendix 2 59

Results o f interviews o f leaders 59

Table 1: Brief results o f business operation o f Vietíracht from 2008 to 2013 3 Table 2: Comparison tbusiness operation results o f Vietfracht with its

competitors in 2 0 1 3 6Table 3: The sea transport fleet o f Vietfracht 15Table 4: PEST analysis o f the extemal business environment o f Vietfracht 28 Table 5: SW OT analysis o f V ie tử a c h t 31

FIGURES

Figure 1: Total revenue, total cost and total proíìt from 2008 to 2013 o f

V ietírach t 4Figure 2: Vietfracht’s market in V ie tn a m 7Pigure 3: The eight contextual features o f Change K aleid o sco p e 41

Chapter 1 Introduction 1.1 An overvie>v o f Vietíracht and its market

According to Vietíracht (2014a), detailed background o f Vietửacht as follows:

Sea transport industry plays a vital role in the socio-economic development o f Vietnam because through large amount o f exports and imports by sea, it contributes to trade promotion for Vietnam Vietíracht was formerly named Vietnam Foreign Trade Transportation Corporation, known as the state- owned company and established in 1963 In October 2006, the Corporation was changed to the joint stock Company, and named Transport and Chartering Corporation (Vietữacht) V ietữacht was offícially listed on the Hanoi Stock Exchange with stock Symbol named VFR in 2006 With over 50 years o f operation and grovvth, Vietíracht has become one o f the leading shipping íìrms in Vietnam The leading position in operating the shipping íìeld, the Corporation has achieved many value avvards from the Government

o f Vietnam such as First Class Labor Medal, Third Class independence Medal, Ọualitìed and Prestigious Enterprise ot' Vietnam, Labour Heroic Unit, The National Golden Cup tor Social Progress and Sustainable Development and The Vietnam Famous Trademark Winner

During the period o f 2005-2015, Vietíracht will enhance its business operations in terms o f diversitìcation o f services, upgrading means o f transportation, strong improvement o f office facilities, infrastructure, and systems o f informatics, strong development o f human resources, and enhancement o f establishment o f joint stock, joint venture and subsidiary

increasing needs o f customers and constantly strengthen its business activities with its partners around the world

Business scopes o f Vietíracht are to transport goods by sea and by land, shipping, logistics and forwarding agents for air, sea and land, direct import

conducts business activities related to chartering and brokerage services,

airline, ship-chandler, entertainment services for passengers, tallying goods, maritime brokerage, warehousing and accommodations for lease, real estate business, leveling ground suríầce o f mineral exploitation and construction, and customs clearance services

The global íìnancial crisis and economic dow ntum from 2009 to the present have been evaluated as the vvorst one since the Great Depression o f the period

o f 1929 - 1933 Maritime industry around the world has suffered serious crisis and many large shipping companies have gone bankrupt or needed to have govem m ent bailout to survive One o f the main reasons is the imbalance o f demand and supply In the global economic crisis, massive development in a sea transportation fleet vvhile there is only a lovv increase in needs o f transportation In Vietnam, sea transportation companies have faced very serious difficulties and many companies out o f them have gone hankrupt Like see transport corporations, sea transport fleet o f Vietfracht has had prolonged difficulties intluencing on lives and works o f its employees and beneíits o f its shareholders and its other stakeholders (Vietíracht, 2013) This becomes a motivation íbr Vietíracht to build the plan íor management changes

in the Corporation in order to improve and enhance its protìtability in the

The Vision o f Vietíracht is to alvvays try to become a leading business company in Vietnam with a variety o f business fields, especially main business activities íbcusing on maritime field In other words, Vietfracht expects to become one o f the leading shipping corporations in terms o f high business performance, high quality services, high brand name, and high trust

in the maritime industry in Vietnam Business objectives o f Vietíracht are to focus on providing high-quality services for customers, create good jobs for citizens where it is operating, create positive working environment for all its

em p lo y ees to enhance physical resources and m ental encouragem ent for its employees, increase its em ployees’ working pertbrmance, provide many beneíìts for its shareholders, protect the environment, enhance the economic and social development in communities vvhere it is operating, comply with all regulations and laws o f Vietnamese government and balance beneíìts o f all its stakeholders Moreover, business principles o f the Corporation are to pay

proíessional business activities according to international laws, enhancement

o f toreign relations and increases in business co-operation with its partners so that these things enhance its business períbrm ance, m aintain and develop its brand name in its industry, ceaselessly increase stock values for its shareholders and benefits for its other stakeholders

In 2013, the Corporation has a very srnall proíit o f business operation vvith VND 220 million and other iníbnnation o f tìnancial results is indicated in table 1

Table 1: Brief results o f business operation of Vietíracht from 2008 to 2013

(VND) 32,755.000,000 16,713,000,000 25,740.000.000 113,950,000,000 2,710,000.000 2 20.000.000

Source: Annual reports o f Vietíracht from 2008 to 2013

According to annual reports o f Vietíracht from 2008 to 2013, although the global economic crisis has occurred since 2008, total revenues o f the company fast increased because the company had many suitable and effective business approaches such as tocusing on effective business operations, and enhancing marketing strategies to enhance customer base Hovvever, its total revenues from 2011 to 2013 strongly reduced because the global economic crisis had high iníluences on Vietnam in general and Vietíracht in particular

From 2008 to 2011, total costs o f the company fast increased but its total cost from 2011 to 2013 strongly reduced thanks to control and management o f business costs Total proĩits o f the company in 2009 reduced in comparison with 2008 but total protìts o f the company started increasing from 2009 to

2011 with high speed Hovvever, from 2011 to 2013, total proíìts started reducing strongly In general, the company had high proíìts from 2008 to

2011 but it had ineffective proíits in 2012 and 2013 The graph 1 indicates the detailed relationship o f total revenues, total costs and total prolìts of Vietíracht In short, the com pany started having ineffective íĩnancial results since 2012 and thus changes become necessary tbr Vietfracht to develop its business growth in the future

Figure 1: Total revenue, total cost and total proíit from 2008 to 2013 o f

Vietĩracht

decrease o f about 92 percent in its proíits compared to 2012 (about VND 2.7 billion) In the Vietnamese maritim e industry, all shipping companies faced signiíìcant difficulties in their business activities related to maritime services because o f bad effects o f the global economic crisis since 2009 Hovvever, in comparison with other shipping companies in Vietnam, business operation results o f Vietfracht in 2013 were in the good level The stock price o f the

maritime industry (see table 2)

Table 2: C om parison ib u sin ess operatỉon results o f Vietíracht with its

com petitors in 2013 Kinancial

Figure 2: Vietfracht’s markct in Vietnam

Source: Vietĩracht (2014b) 1.2 Research purpose and questions

1.2.1 Research purpose

On the basis o f assessing the current situation o f Vieítracht, the researcher can tìnd out the strengths, vveaknesses, opportunities and threats to create a plan for developing Vietírachtin the future The researcher can apply the learnt theories and actual experience to propose the solutions to improve Vietữacht business pertormance in the future

1.2.2 Research questions

The research needs to ansvver tìve research questions as follows:

1 What is the present situation o f Vietfracht?

2 What does Vietíracht expect to change in the future? And why does Vietíracht need to conduct the changes?

3 What are support and protest íòrces in these changes? And vvhat are the capacity and vvillingness o f Vietfracht’s leaders in conducting these changes?

4 What are the mechanisms and measures that are used to support these changes?

5 What pracess or plan does Vietiracht need to follow to achieve íùture changes?

1.3 Research data and methods

The research uses both secondary data and primary data to ansvver research questions Secondary data is the data available tơ the researcher because it has been collected by other researchers for other research aim (Saunders et al., 2009) There are three types o f secondary data consisting o f data collected from multiple sources, documentary data and survey-based secondary data Therefore, through use o f the secondary data, the researcher can gain some advantages such as the researcher saves time and money to collect the secondary data, the researcher does not faces problems relevant to geography and ti me and the researcher can assess the secondary data beíore using it (Srivasta and Rego, 2011) The research uses secondary data from the íĩnancial statements, annual management reports o f Vietửacht, reports on revievving the World Economy and Vietnamese Government Reports on Vietnam Economy and Society The researcher does not face any difficulties related to tlnding the secondary data because it is available to the researcher Moreover, the secondary data is valid and reliable such as the tìnancial statements, and annual management reports o f Vietíracht are audited by extemal auditors and the World Economy and Vietnamese Government Reports on Vietnam Economy and Society are provided by the Vietnamese govemment

Primary data is directly gathered by a researcher through various tool o f collecting data such as questionnaire and intervievvs The researcher collects primary data through interviews because the technique o f collecting data helps the researcher has deep information about study subjects (Biggam, 2008) The researcher conducts intervievvs o f Vietfracht’s key employees and leaders to clariíy the support íorces, the protcst torces in the changing process and the capacity and the vvillingness in changing o f Vietfracht’s leaders In addition, through intervievvs o f Vietfracht’s leaders, the researcher can deeply

Corporation The researcher intervievvs 04 leaders o f VietlVacht inclnding 03 deputy directors, and one chairm an o f board o f directors and 06 employees o f

V ietữ acht w orking at Sea Transport and Logistics block, and Services block According to K um ar (2002), there are sometimes unexpected elements that can intluence on the quality o f iníormation collected in intervievvs For example, am biguity in w ordings o f questions in interviews, the nature o f the interaction betvveen interviewees and interviewer, applied instruments o f recording data, physical setting o f collecting data and the aim o f the interaction betw een interviewer and interviewees can intluence on the quality

o f responses during the interview The primary data is provided by leaders and em ployees o f Vietfracht w ho have great experiences and deep understanding about the current business situation o f Vietíracht In during the interviews, the researcher uses note-taking approach to record information or primary data provided from interviewees and interviews the leaders and

em ployees o f the com pany in comíortable physical setting so that the intervievvees feel com tbrtable in expressing the iníòrmation from thcir real thoughts The aim o f the thesis is build a plan for development o f the Vietíracht in the ÍTiture Thereíore, leaders and employees express their real ideas about the current situation o f V ietữacht and then all their ideas become valid and reliability to use in the thesis Aíter collecting primary data, the researcher analyses the data objectively to achieve valid research íìndings However, intervievvs o f 04 leaders o f Vietfracht and its 06 employees cannot cover all opinions o f all leaders and employees o f the company

C hapter 2 Analysis o f present situation and expected íuture changes o f Vietírachtby

using M IO Model

The MIO Model is widely used for the management to have a general insight

on present situation and analysis o f the future o f their company The model is developed by Hriksson and H auer (2004) to find three interdependent issues including extemal elements (market), the positioning o f products or services (ỉnteraction) and internal element (organization)

2.1 A description o f the present situation

2.1.1 The present market

According to Vietíracht (2013), the w o rld ’s economy had a slight recovery in

2013 after the period o f signitìcant econoinic crisis with the 2012 year o f the most signiíìcant difficulty o f economy The global Gross Domestic Product (GDP) in 2013 raised about 2.4% and the increase was the first one after many years ceaselessly reduced The slight economy recovery occurred in many areas around the world in 2013 For example, in the United States, its economy had signiíìcantly positive changes in 2013 such as unemployment

profits o f companies in the United States had increases, and real estate market started recovering In Japan, its economic recovery was quite high in 2013, such as export o f the country increased quite highly, proíìts o f companies in the country highly increased, stock prices in the Japanese stock market increased about 50 percent The G D P o f European areas íìrst increased after the decade o f reduction such as the United Kingdom increased 1.9 percent that was the highest rate during the last six years In addition, the economy o f emerging countries in Asia had slight economic recovery in 2013 Hovvever, the level o f the global economic recovery is not still considered as firm recovery because o f risks and unstable elements Issues that draw much attention o f shipping companies in Vietnam are political conílicts and military

contlicts betvveen China and North Africa, political conflicts in Northeast Asia, and recently serious political crisis in Ukraine.

The global economic crisis and the vveaknesses o f support policy o f the Vietnamese govem m ent has made inílation rate highly increase, and has signitìcantly affected stability o f macroeconomics Moreover, they have made the Vietnamese economic slowly increase and have caused many difficulties for business activities and Vietnamese people’s life The global maritime market in 2012 was to íầce difficulties and the maritime industry had the highest crisis in the year ỉn 2013, the global maritime industry faced difficult situation o f reducing maritime demands o f customers The Baltic Dry Index (BDI) was about 800 points in the íirst three quarters o f the 2013 year in comparison with 647 points o f the year 2012 In the íburth quarter o f the 2013 year, the BDI started slightly increasing However, the slight increase o f the BDI was not stable and only íbcused on segmentation o f large vessels like Capsize and Panamax in 2013 Moreover, the maritime markets for the smaller size like vessels o f Vietíracht had very lo\v recovery and the maritime

prices were high and maritime costs increased The difficult situation caused many difficulties for maritime companies around the world including Vietnam In Asia, one the largest íleets o f Japan - Nippon Yusen Kabushiki Kaisha (NYK) in the fírst three quarter o f the 2013 year had losses o f 2.5 billion Yen in terms o f Container transports Other brand names such as Yang Minh, and Evergreen in Taivvan faced many diffículties in business activities and had high losses One o f the largest brand names in the maritime industry

o f South Korea - Hanjin faced many signiíìcant difficulties such as losses o f

u s s 391 million in the first three quarters o f the 2013 year and currently paying very high interest rates for borrowing previous bank loans in order to invest in too m any vessels that had conducted in the previous period o f economic crisis In China, in 2013, two o f the largest brand names in the

maritime indưstry including cosco and China Shipping íầced many similar difficulties and the C hinese governm ent required the two fleets to restructure

V IT R A N C H A R T had losses o f V ND 224 billion, VINASHIP had losses o f VND 108 billion and D ong Do Com pany was delisted in thc Vietnamese Stock Exchange because its consecutive losses in three years with an amount

o f lo s s m o n ey h ig h er than share Capital (Vietíracht, 2013)

Vietnam vvith the developing econom y faces many tlerce competitions in the globalization era and the country has limited human resources to conduct developm ent o f social security and national deíence security Hovvever, the Vietnamese governm ent has had timely decisions o f adịusting objectives and tasks that tocus m uch attention to reduction o f inílation rate, stability o f macroeconomics The adjustm ent o f the Vietnamese govem m ent has helped the V ietnam ese econom y recover Some economic targets o f the year 2013 included the G D P increased 5.42 percent, an increase 5.25 percent in com parison with the last year, the Consumer Price Index (CPI) was 6.04 percent (the lovvest level in the last ten years), total export and import

the last five years), the íòreign exchange rate vvas quite stable (domestic currency only reduced 1 percent in comparison with the last year), the foreign currency reserves increased, interest rates reduced in the year vvith 7-8 percent

in com parison vvith 14% in the last year, the Vietnamese stock index grevv about 20.62 percent (the most highest stock grovvth in Southeast Asia and the real estate market started recovering (Vietfracht, 2013)

Although Vietnam had the economic growth in 2013, the quality o f economic growth o f the country is evaluated as the unstable one, and the competition capability o f the econom y is low because Vietnam is facing many disadvantages such as over-expenditure o f national budget, high public debts,

very slovv economic restructuring process Moreover, Vietnam faces many difficuỉties in terms o f restructuring business activities o f the corporations, state-owned companies, building useful business environmenl for companies

in Vietnam As a result, there vvere 61.000 companies that were dissolved or stopped their business activities temporarily in 2013 and the result was the same figure in 2012 In short, the Vietnamese macroeconomics had a slight recovery and tầced many significant diííìculties in 2013 (Vietfracht, 2013)

V ietnam ’s fleets in its maritime industry have small scale In other vvorlds, the country’s sea port netvvork is small scale with inefficient distribution Most o f big ports are located at far rivers like Saigon port and Haiphong port with restricted depth at the entrance while some ports o f the country are located in big cities This causes difficulties to transíer cargos from one port to other port Moreover, Vietnam lags badly behind other countries in Asian area because o f its high operation cost and its average operation períòrmance in the region Moreover, maritime supporting services such as maritime transport agents, ship line agents, ship maintenance and repair at port, etc are developing Hovvever, V ietnam ’s the development o f supporling services in maritime transport is weak in comparison vvith other countries in the Asian are because its weak proíessional and managerial ability o f shipping companies in Vietnam, especially low quality o f maritime supporting services and untầir competition between the shipping companies From now to 2020, the country íocuses on investment for its fleet, cargo distribution centers and logistic Service centers with total investment costs o f 270-290 trillion Vietnam has less crew members and its crew members who are well trained in the basic theory but they have the restricted practical experience Theretbre, the country does not meet needs for quality and quality, especially in crew members who have the ability to work on overseas vessels In order to overcome the lack o f human resources in the maritime industry, Vietnam has

an orientation o f developing human resources from now to 2020 The country

vvill train about new 24,000 crevv members and officers and retrain to increase skill level o f 15,000 existing crew members and officers Moreover, the country enhances to train human resources in shipbuilding, logistics and marine seaport exploitation aspects (ASEM Connect Vietnam, 2014).

The year 2013 vvas the golden jubilee o f the corporation’s íbundation Although the global economy has a slight recovery, the year 2013 was still a diỉììcult business year o f all shipping companies In 2013, most shipping corporations in Vietnam suffered signiíìcant losses but Vietfracht’s business results are proíìtable Although the corporation’s business proíits were very small in 2013, this proved a success in its business activities and expressed increasing efforts o f its leaders and its human resources In the quite difficult context o f buying and selling seagoing vessel in Vietnam, the corporate sold a sea going vessel - Vietíracht 02 and contributed to reduction o f losses o f the íleet Moreover, in order to reduce diffĩculties o f cash flows and financial costs, the Corporation had success negotiations with banks in Vietnam to have extension o f paying bank loans and reduce interest rate o f the bank loans (Vietíracht, 2013)

2.1.2 The main market activities

Services o f Viettracht include shipping o f goods hy sea, chartering ships, ship

chartering brokerage-related services, ships for rent, shipping agency, logistics and forwarding agents for air, sea and land, services o f warehouses

transport o f goods by land, consolidation o f goods; intemational express Service (including heavy cargo and goods, technical and scientific material, commercial documents, Products, sample o f goods, commodity), booking agent for domestic and intemational airlines, ship-chandler, entertainment Service for passengers and seam en, pick-up, im m igration and change o f seaman Service, íorvvarding Service o f ship’s spare parts, tallying o f goods, maritime brokerage, real estate business, offìce for lease, shoveling, carrying,

leveling ground suríầce for mineral exploitation and construction, temporary import for re-export; triangle trading, forwarding Service o f export and import

In terms o f sea transport, Vietíracht sea transport lleet consisted o f 04 vessels including Vietíracht 01, VF Glory, Thang Long and Blue Lotus and they are presented in table 3 Vietíracht manages and operates 04 fleets vvith the high capability and it is going to invest in its fleet to ensure that it can provide its customers with the best services and improve the business períbrmance (Vietíracht, 2013)

Table 3: The sea transport fleet o f Vietíracht

Tonnage(DWT)

Vessels type

Year/Place o f being built

Source: Vietíracht (2013)

As shipping agency, Vietfracht is General Agent for many conventional Container lines around the vvorld vvith various types o f vessels including dry carriers, reefers, bulkers, tankers, passenger ships, Ro-Ro vessels, and crude oil carriers Moreover, the Corporation provides agency services for vessels that call at all ports in Vietnam and its range o f services covers all aspects including inward and outvvard clearance, stevedoring, crewing, and cargo handling (Vietíracht, 2014c)

In terms o f charting and ship-broking services, two services are traditional Business o f the Corporation With many years o f experience and strong relationship with charterers and ship-owners, Vietíracht is successíully fixed suitable ships for many shipments in Vietnam Customers can contact the Corporation for any import or export cargo because it has extended its services

to link its customers and suppliers Corning into transactions in some shipments such as salt, coal, tapioca chip, silica sand, fertilizer, coal, grain, sugar, rice, anthracite, and ore cargo (Vietíracht, 2014 d ).

With respect to forwarding and logistics services, Vietfracht’s employees with experience and knovvledge alvvays understand how to satisíy requirements o f customers and protect their own beneíìts With its overseas representatives and agencies always take good care o f customers’ interests and cooperate with the Corporation for sm ooth m ovem ent o f cargo to all destinations Vietíracht assists its customers in four fíelds including airữeight and sea íreight forwarding services, multi-modal transportation, consolidation and distribution services, and customs clearance, documentation and insurance (Viettracht, 2014e)

In terms o f trucking and vvarehousing services, Vietfracht provides modern vvarehouses and management system in different locations in Vietnam such as Danang City, Binhduong province, Haiphong City, Hochiminh City, etc Moreover, it trucks provide timely services with safety o f goods and it supports to stuff cargo into containers at vvarehouses o f customers The professional services satisfy its customers due to careful and timely services and suitable prices (Vietíracht, 20140

Places or locations o f Vietíracht are in 8 key provinces and cities in Vietnam

that Vietíracht has a strong presence including Hanoi City (its headquarters), Hochiminh City, Vungtau City, Quangninh province, Haiphong City, Danang City, Ọuangngai province and Ọuynhon City Vietfracht’s key customers are

in the 08 markets With its locations in big cities, Vietíracht can meet most demands o f customers around Vietnam In addition to the 8 key markets, it starts enter new markets such as Hungyen province, and Dongnai province (Vietíracht, 2013)

Prices o f Vietfracht are reasonable and this helps it create and maintain

competitive advantages in the ĩiercely competitive maritime industry in

Vietnam Hovvever, in the very difficult economy situation, most shipping companies around Vietnam have reduced íreight rates to attract customers and maintain their business operation Like the shipping companies, Vietíracht also reduce Service prices to survive in the severe com petitive industry In sea transport o f Vietíracht, the 4 fleets o f the Corporation provided strongly decreasing prices o f renting its vesseỉs in 2013 such as the Thang Long íleet reduced 45.5 percent, and the Blue Lotus reduced 32.4 percent compared to

2012 Therefore, difficult markets are main reasons for reducing prices, revenues and business períormance o f the 4 fleets o f Vietữacht Moreover, Service prices related to renting offices also strongly reduced because o f custom ers’ demands for renting offices in 2013 (Vietfracht, 2013)

Prom otion or m ark etin g activities o f Vietửacht do still not achieve

efficiency in fmding out nevv customers and introducing services o f the

C orporation to customers Most m arketing activities o f the Corporation only use traditional marketing methods such as advertising in the press and seminars o f introducing services (Vietfracht, 2013) Therefore, new marketing methods such as social media (Pacebook, and YouTube, etc), vvebsites, and other Online marketing methods can be a new marketing orientation for the

C orporation in the future to attract n e w c u sto m e rs

2.1.3 The present organization

Present objectives o f the Corporation is to conduct restructuring o f the tleet

that Vietíracht is providing, maximize reduction o f business costs, keep the

c o rp o ra tio rfs Capital whole, restructure business activities according to the priority plan o f developing hum an resource and in ữ astru ctu re for Service tìeld related to Logistics, maintain security o f employment for its employees and benefits for its shareholders The Corporation is divided into 3 blocks that 2 blocks are responsible for direct business related to Sea Transport and Logistics block, and Management and Services block There apẹ 4 divtstoos

1 Đ Ạ I H Ọ C Q U Ộ C G IA H A NỘT ĨRUNG t â m t h ô n g T Ị N Ĩ H Ư ^

that are responsible for directly managing and operating the sea transport fleet for business Firstly, Sea Transportation Department is responsible for operating business Secondly, Ship Management Department is responsible

Department is responsible for crevv business Lastly, Safety Management Board is responsible for safety management business under the ISM Code Moreover, in Vietíracht branches and subsidiary companies, there are also departments or divisions for chartering, and marine brokerage supporting the company fleet by seeking cargos and conducting the shipping agent tasks for the fleet when arriving Vietnam ports (Vietữacht, 2013)

According to leaders o f Vietfracht, Vietfracht has lots o f capability and competences to create competitive advantages to maintain and develop its growth o f business operation in the severely difficult economic period Vietíracht is a Corporation with long history o f business in the Vietnamese maritime industry and thus its brand name is íầmous in both domestic and intemational market in marine and logistics tìelds When customers in Vietnam have demands o f shipping goods, they often choose shipping

through provide quick and exact shipping services and other services, tbcusing on providing services that meet all demands o f customers, pay much attention to customer values, and handling custom ers’ problems related to

netvvork o f activities including branches, subsidiary companies, and joint venture companies with its partners around Vietnam and has provided a variety o f services reiated to shipping and logistics Moreover, the Corporation has invested in m odern transportation facilities and has built a netvvork o f Container warehouses in some key ports o f Vietnam Vietíracht has had strong cooperative relationships with many international and domestic shipping

lines, tbrvvarders and other partners due to its famous brand name, respect o f domestic and international trade requirements, and balance o f benefits betvveen the Corporation and its partners In other words, the Corporation always respects rights and beneĩits o f its partners to build a strong and long- term relationship vvith its partners Vietửacht has long-term tradition related

to building strong solidarity in all its employees and spirit o f overcoming diffìcult situation to help achieve the highest success o f business operation in the currently difficult economic situation Moreover, the company owns qualiíied employees including talented leaders and managers, officers with high knovvledge and skills, and excellent crew All its employees have had large dedication to current success o f the Corporation In additional to sea

tra n sp o rt business, other business services o f Vietíracht such as Container vvarehousing, freight forwarding, marine services, etc remain protìtable and has the significant grovvth The services contribute to proíits o f the Corporation in the very difficult period o f the sea transport business

Although Vietlracht has lots o f capability and competences, it also has many internal dravvbacks Pirstly, although Vietfracht is a ịoint stock company, the State holds the dominant shares that make up 51 percent o f share Capital The remaining 49 percent o f share Capital are owned by tbreign and domestic shareholders including 19 institutional shareholders and 970 individual shareholders Moreover, because perennial operation during the period o f receiving the subsidy írom the govemment, the Corporation’ structure has been unsuitable, mechanism o f operation and mechanism o f finance have been inflexible In other words, the vvhole apparatus o f govemance is not

possesses excellent employees meeting the jo b requirement, an amount o f labor íbrces with high knovvledge and skills are not numerous and their capability are uneven and limited in some aspects Moreover, vvorking spirits

o f employees in some places are not really dynamic and enthusiastic and the

employees are afraid to ehange their ways that tliey are using to complete their vvorks In other words, the unenthusiastic employees prefer familiar ways to conduct their works to change the vvays to achieve vvorking

some key ports o f Vietnam, material íầcilities serving logistics services in Hanoi City, Hochiminh City and Danang City are not sufficient and this continue to limit the ability to compete in logistics field o f the Corporation Lastly, the corporations’ traditional business is sea tleet operation and the business operation is the backbone o f the Corporation but it still not strong and efficient enough Moreover, the in the business aspect, the Corporation only tbcuses on bulk cargos and the focus is not linked to other business segments

o f the Corporation Moreover, the Corporation cannot reduce its business risks and business bankruptcy when only íocusing on the sea Heet operation because the sea transport business face many large difficulties like the currcnt period, this reduces proíìts o f the whole business operation o f Viettracht (Vietửacht, 2013)

2.1.4 Summary o f the present situation

Although the global economy has a slight recovery, the year 2013 was still a ditTicult business year o f all shipping companies because most shipping corporations in Vietnam suffered significant losses With diíTiculties in the global maritime markets in general, and business environment in the Vietnamese maritime industry in particular, Vietfracht’s business operations faced many significant difficulties in 2013 Moreover, íìnancial wealth o f the

C orporation has been significant reduced because o f the global economic crisis since 2009 These disadvantages have caused more and more challenges for business operations in the current pcriod and in the tuture period

it did not have losses in íìnancial results and achieved a very small profit in its

business operations in 2013 due to focus much on m aintaining its strengths and ensuring the ability to pay its debts Although its proíìts o f business operation were very small in 2013, the proíìt proved increasing eỉTorts o f its leaders and its human resources to overcome common diíTiculties in the Vietnamese maritime industry The small success is advancing impetus o f the

2.2 Expected íuture sector changes

2.2.1 Market changes

In 2014, the situation o f maritime industry still íầces difficulties because o f negative effects o f the global economic crisis Moreover, the govemment will

2344/ỌD-TTg dated 02nd December, 2013 and this is a very high effect on business activities o f Vietíracht in the future (Vietíracht, 2013)

According to leaders o f Vietíracht, Vietnam has become one o f official members o f the World Trade Organization (WTO), Trans-Paciíĩc Partnership (TPP) and the country has removed trade barriers to vvelcome foreign investors These policies o f the country will attract the big FDI intlows With the big FDI intlows and the international labor distribution, the demands for

world and the existing customers have become loyal to Vietfracht Moreover, the existing custom ers w ant to cooperate with the Corporation to expand their business markets in Vietnam There are big chances for Vietíracht to continue

to maintain a good relationship vvith existing customers and can eam additional beneíìts when cooperating with the customers Moreover, the Corporation builds a strong relationship with existing customers that is considered as the way to draw attention o f new customers because the existing customers can good word-of-mouth about the Corporation The Vietnamese govem m ent and the Ministry o f Transport have decided to

suspend licenses for íbreign flag Container vessels shipping on dom estic routes The policy aims to promote the development o f the Vietnamese

C ontainer shipping fleet and proactively meet d em an d s for Container transportations on domestic routes

Although Vietíracht has some positive market changes in the future, according to leaders o f Vietữacht, the business operation in the future period must face many difficulties Firstly, the global economic crisis is recovering slovvly and its effects on the Vietnamese economy are heavy This has caused heavy losses for shipping corporations in Vietnam in general and Vietíracht in particular Vietfracht has to face many heavy difficulties to survive in the íierce industry in Vietnam Secondly, the worldwide marine industry continues to fall into the imbalance situation o f demand and supply The global economic crisis contributed to a signiíicant imbalance between demand and supply in the worldwide shipping industry In other vvords, there are massive developments in a sea transportation fleet vvhile there is only a low increase in needs o f transportations This make shipping companies around the vvorld in general and in Vietnam in particular bear a highly current cost o f interest rates for borrowing previous bank loans in order to investment in the sea shipping fleet that had conducted in the previous period oí' economic crisis Moreover, the imbalance between supply and demand leads to the consequences such as shipping companies around the world including Vietnam reduce íreight rates and the íierce competition in the global maritime industry is ever-increasing For example, in 2010, the average íreight rate a

Hovvever, the freight rate was ưs$ 2,000 in 2011, a decrease o f more than 50 percent Thirdly, there are great competition in the field o f maritime transport and logistics in Vietnam In Vietnam, therc are hundreds o f shipping companies including state-owned companies, private companies (ịoint stock companies and limited liability companies) and íòreign invested companies

All shipping companies in Vietnam provide maritime transport services and maritime supporting services and the shipping companies create a tìercely competitive environment with various shipping services In the future, Vietnamese shipping companies in Vietnam including Vietữacht wi 11 face tlerce coinpetitions in the maritime industry because Vietnam has opened its maritime markets and removed most trade barriers to welcome íbreign shipping companies to establish in the country after jointing the WTO For example, in Haiphong City, Vietnam, there are more and more shipping cornpanies that provide logistics services such as Vicoship has its warehouses with 8 hectares and Yusen Logistics has its warehouses with 10 hectares and Tan Cang Maritime Company starts establishing its vvarehouses in the City Fourthly, m an y tra d itio n al institutional customers o f the Corporation w e n t

bankrupt or stopped their operations because the customers suffered heavy losses in the global economic crisis Moreover, some institutional customers changed from appointing Vietfracht as general agency into setting up joint- venture companies with Vietữacht Some joint-venture partners became 100

Fiíìhly, the corporations’ sea tleet operation is the backbone o f the

business aspect suffered heavy losses in the global economic crisis When Vietfracht only tocuses on sea transport business and then the sea transport tìelds íầce many large difficulties like the current period, this can be easy to bring it to the verge o f bankruptcy Lastly, there are more and more increases

in business operations o f shipping companies around the world including Vietnam because o f increasing oil prices For example, the íìrst eight months

o f the 2011 year had a signiíìcant increase in bunker prices or oil prices from

now tầce severe challenges with the combination o f reducing ữeights rates, increasing voyage-related costs and uncertain markets (AT Keamey, 2012)

2.2.2 New interaction activities

According to leaders o f Vietữacht, Vietíracht will continue to íocus on services include sea transport, shipping agency, chartering and ship-broking, forwarding and logistics, real estate services, trucking and warehousing in the future In terms o f sea transport business operation, the 2014 year and the next years will still be gloomy and thus Vietíracht must face đifficulties in

m an ag em en t and exploitation o f the tleet H ow ever, the Corporation hopes that the gradual recovery o f the BDI will improve its revenues and business períormance o f the fleet The Corporation still continues to consider sea transport as the m ain business Service in the future Hovvever, the Corporation must enhance the capability to manage the íleet and fmd out potential customers to rent ships Moreover, the C o r p o r a t i o n still continues to follow the market o f buying and selling ships and focus much attention to find out opportunities íor selling the ship called VF Glory With respect to shipping agency, forwarding and logistics, chartering and ship-broking, trucking and vvarehousing services, the 2014 year and the next year continue to face difficulties because some customers can continue to reduce demands for the services Thereíore, Vietfracht raises the sense o f initiative in saving operation business costs, enhancing Service quality, en hancing innovative marketing activities with lovver costs, tìnding out new customers Moreover,

material íầcilities in order to serve demands o f customers and enhance business pertbrmance o f the services For the real estate aspect, Vietíracht will continue to manage offíces for rent, find out new customers to rent all its available offices

Vietíracht continue to enhance its strong presence in 08 key provinces and cities in Vietnam including Hanoi City (its headquarters), Hochiminh City, Vungtau City, Quangninh province, Haiphong City, Danang City, Quangngai province and Quynhon City Hovvever, in the íiiture, the Corporation vvill

enhance its business operations in other smallcr cities and provinces such as Hungyen province and Dongnai province such as building the vvarehouse o f ICD in Longbinh, Dongnai province and a new port in Vanphong, Khanhhoa province (Vietíracht, 2013).

According to leaders o f Vietíracht, in terms oí'Service prices, Vietíracht will try to avoid increasing Service prices to com pensate for input costs such as marketing costs, oil costs, and other business operation costs Moreover,

then can lead to strong crisis o f the maritime industry Instead o f reducing

services to satisíy customers This a wise way that not only create a strong relationship with customers to overcome the difficult economic period but also help stabilize prices in the maritime market With only traditional marketing activities, the Corporation is difficult to fínd out new customers

new marketing activities Vietíracht continues to apply its traditional marketing activities in the press and seminars o f introducing shipping services and enhancing custom ers’ awareness about its brand names In addition, new promotion activities o f V ietửacht are to focus on such as advertising in social media like Facebook, and YouTube and advertising in its websites With advertising in social media and vvebsites, Vietíracht can save many costs o f marketing activities compared to traditional marketing activities such as advertising in the press and seminars o f introducing shipping services Moreover, through social media, brand names o f V ietữacht can be known by customers around the vvorld because potential customers can find out comments o f services in social media beíòre they use shipping services o f the

services, this can attract potential customers and then the Corporation enhances customer bases through advertising in social media Moreover, with

social media, the Corporation can direct and two-way communication with customers and then it can deeply understand thoughts o f customers about its services to improve its poor services and maintain its good services In terms o f

detailed infonnation about services, average prices o f each services, and hot line

2.2.3.New organization activities

Vietíracht completes modification and promulgation o f intemal regulations about corporate govemance according the circular No 121/TT-BTC o f the Ministry o f Finance However, issues are continuing to conduct such as an investment prọịect o f building warehouses in Longbinh, Dongnai province, a project o f establishment and exploitation transship areas o f ore in Vanphong, Khanhhoa province The market o f buving and selling seagoing vessels are too gloomy and thus the vessel o f VF Glory o f Vietfracht only has one buyer

in North Korea in spite o f positive advertising strategy Hcnvever, North Korea is placing an embargo and the transaction with the buyer is not períòrmed Moreover, Vietfracht continues to huild entrepôt in Hoacam, Danang City and tocus much on improving warehouses in Donghai, Haiphong City to enhance their capability o f operation (Vietíracht, 2013) Moreover, according to leaders o f Vietíracht, Vietfracht wi 11 restructure the shipping fleet and change the business method o f sea transport from bulk and cargo transport to inland Container transport in order to reduce losses o f sea transport and associate sea transport in the supply chain o f logistics Service o f the Corporation considered as an important part To complete this, Vietfracht must step by step liquidate, sell its present dry cargo vessels with prioritizing

transport vessels, set up the inland C o n t a i n e r shipping routes vvith vveekly schedules, associate with its Container warehouses systcm y in Haiphong City, Danang City, Quynhon City and Hochiminh City, maintain business activities

o f sea transport sector at the present, find out customers for Container fleet,

select em ployees with high experience in managing C ontainer vessels to provide additional supports for sea transport block, focus on training and re- training 1'or existing em ployees to ineet vvork requirements, positively use

system, enhance com petitiveness to meet the increasing requirements o f customers

In financial aspects, V ietữ acht enhances the control o f debts, maximizes in

sa v in g costs o f b u sin ess o p eratio n and m eet requirem ent o f w orking Capital for its units to serve their business operations Moreover, it also continues to seriously follow business operations o f its joint-venture companies to enhance business perform ance o f the companies Before withdrawing Capital o f the governm ent, and Tan C angSaiG on Company, Vietfracht continues to proactively find out new strategic partners in order to receive additional

its cost norm o f operating the íleet such as oil costs and replacement materials and exactly íorecast o f changes in oil prices to have suitable solutions for oil price changes For example, if oil prices increase, Vietfracht should reserve oil (V ietữacht, 2013)

In short, the business tleets o f V ietữ acht are now not effective and less related

tbcusing more resources or the fleets has been the burden ot' the vvhole business system o f Viettracht Thereíore, it is the motivation for the whole Corporation to c h an g e the b u sin ess m eth o d o f sea transport fleet in order to improve its business performance, improve vvorking environment and physical lives o f employees, and help its shareholders receive higher dividends and contribute more to the State buđget This change in Vietfracht’s business operation that needs to conduct mainly relates to sea transport block

o f the Corporation However, it is necessary for Vietfracht to cooperate all its remaining business blocks to improve business performance o f the vvhole company

2.2.4 S u m m ary - PEST analysis and SVVOT analysis

❖ PEST analysis

The PEST fram ework is used for managers to analyze how political íầctors, econom ic íầctors, social tầctors and technological íầctors are changing now and how the four íactors are likely to change in the íuture in order to draw out implications for their com pany (Johnson, Scholes and Whittington, 2010) The table 4 sum m arizes the PEST analysis o f extemal business environment

o f V ietíracht and information in the table 4 is provided by reports related to the Vietnam ese maritim e industry and by leaders o f Vietửacht in interview process between the researcher and the leaders

T abỉe 4: PEST analysis o f the external business environment of

V ietíracht Political íactors

planned econom y because the country

has opened the V ietnam ese econom y to

gov em m en t has com m itted to enhance

econom ic liberalization and m odem ize

renovation policy o f the Vietnamese

govem m ent has been more enhanced

since the country join ted in W TO in

2007 This has created good conditions

business in the country

+ Secondly, according to leaders o f

Vietíracht, Vietnam is the country that

has stable political situation and thus

íòreign and domestic shipping com panies

can feel secure about their business

operation’s future in the country

Economic íactors

+ Firstly, Vietnam is one o f the tầstest emerging countries o f Asia vvhich has a sustainable economic grovvth in the last five years However, Vietnam tầces serious challenges such as continuous currency devaluation, persistent trade deficit in the last years, and the highly dependent on FDI for

2012)

+ Secondly, according to leaders

o f Vietfracht, although Vietnam had the economic grovvth in 2013, the quality o f economic growth o f the country is evaluated as the

Vietnam íầces many difficulties in terrns o f restructuring business

state-owned companies, building

+ Thirdly, according to leaders o f

V ietữacht, the V ietnam ese govem m ent

has a strong interterence in running

com panies do not try to develop and

depend only on the support o f the

Vietnam ese g o v em m en t when they face

business ditTiculties such as V IN A SH IN

shipbuilding com pany has been poor

íìnancial status and the com pany must be

restructure all asp ects related to b u sin ess

operations, and m anagem ent issues

+ Lastly, from now to 2020, Vietnam

vvill focus on investment for its fleet,

c arg o distrib u tio n c en ters and logistic

Service centers with total investment

costs o f 270-290 trillion and train about

new 24,000 crew m em bers and officers

and retrain to increase skill level o f

2014)

useíul business environment for

business activities temporarily in

2013 and the result was the same íigure in 2012

+ Lastly, according to leaders o f

economy faces challenges related

to its low flexibility to adapt to market changes and high input costs because o f high level o f import o f materials and equipment

o f building ships Thereíore, with

shipbuilding companies sell ships

to shipping companies with high

co m p an ies enhance freight rates to compensate for their buying costs and can reduce the competitive ability in the Vietnamese maritime industry, especially in the gloomy business period

Social factors

+ Hirstly, V ietn am ’s labor costs rank the

second lowest in Asian íìeld followed by

Cambodia Low labor costs are the

dom inant strength o f Vietnam and this

destinations for global investors (Ecorys

Netherland, 2010)

Technological íacto rs+ Firstly, V ietnam ’s most o f

m aterials and equipm ent related to

because the country has less than

equipment used to build its ships (Ecorys Netherland, 2010)

+ Secondly, according to leaders

dem ographics that support the co u n try ’s

consum ption A bout 70 percent o f the

total population o f the country is below

40 years old that will be a driver oi'

consum er spending in the next few years

(Lucintel, 2012)

industry has labor forces that lack

practical skills and independent thinking

M oreover, leaders o f shipping com panies

lack o f m anagem ent expertise Thereíbre,

the Vietnam needs to strengthen training

program s related to practical issues for

em ployees to enhance practical skills o f

the employees

Development (R&D) in the global maritime industry in general and the Vietnamese maritime industry

in particular always must be

R&D in the maritime industrv is low and thus shipping companies oíten prefer ships designed in íbreign countries

+ Lastly, according to leaders o f Vietfracht, the maritime industry

in Vietnam has fast speed o f

changing demands o f customers This can cause many challenges íor shipbuilding companies and shipping companies in Vietnam

❖ S W O T analysis

The S W O T fram ework is considered as the well-estab!ished analytical method that is used to evaluate an strengths, vveaknesses, opportunities and threats o f a com pany to enhance the strategic decision-making in the future o f the com pany (Trim and Lee, 2008) Vietíracht continues to face diíTiculties o f business in maritime industry and can be suffered business losses in the global economic crisis atìer gloom y maritim e market forecasts in the next few years Vietíracht has to have the suitable change in leadership to cut losses in the business íìeld o f sea transport and improve business pertbrmance o f the whole system The below S W O T analysis is used to analyze strengths, weaknesses, opportunities and threats o f V ietử acht and then the analysis helps choice a suitable strategy for the changes in the future All iníbrmation o f SW OT is provided by leaders o f V ietíracht in the interview process betvveen the researcher and the leaders

Table 5: SW O T analysis o f V ietíracht Strengths

+ Firstly, Vietfracht is a Corporation that

maritime filed and its brand name is

famous in marine and logistics tìelds in

both domestic markets and International

markets

established a wiđe netvvork o f activities

and C ontainer vvarehouses system in

some main ports o f Vietnam Moreover,

Vietíracht has built strong cooperative

relationships lots o f its domestic and

international shipping lines, tbrvvarders

and partners

employees including officers and crew

vvho have high proíessional expertise and

employees are invaluable assets and are

main strengths o f the Corporation because

they are vvilling to contribute their

capability to achieve business objectives

o f the Corporation

+ Lastly, in addition to sea transport

business, Vietíracht expands its business

operations in som e other services such as

VVeaknesses

+ r ir s tl y , Vietfracht is a joint

dominant shares with 51 percent

because o f the perennial business operation related to subsidy, the corporation’s structure has some inadequacies, and mechanism o f action and mechanism o f íìnance are difficult and inílexible

employees who meet the job

Thereíbre, the whole labor forces’ capability o f the Corporation staffs capacity is uneven There are some employees who are limited

in some sides and working spirits

o f some employees in some places

to change in ways that are using to complete their vvorks

+ Lastly, the Corporation has no key and strong products because