Chapter 2: ACTUAL SITUATION ANALYSIS OF DA NHIM – HAM
2.3 Internal enviroment analysis of DHD
2.3.5 Determine strengths and weaks of the company
With above internal enviroment analysis, determine strengths and weaks of the company
Strengths
With two power generation blocks are Da Nhim - Song Pha and Ham Thuan - Da Mi separated on location, so they can share the risks of weather if any unsual weather change localy. Especially, the statistics showed that power output of Da Nhim- Song Pha is stable and tends to higher designed capacity from 10-20% per year.
Contract with Electricity of Vietnam to sell electricity directly so they ensure output stably, create good conditions for companies to focused on manufacturing, exploiting the hydropower resources logically and effectively, then proceed to open wide geographical area and scope of activities.
As a hydroelectric power plants, the input costs and repair, maintenance equipment system, works costs much more lower than thermal power.
After many working years, the staff in the company has accrued a lot of experience in the management and operation, repair, maintenance, construction supervision, installation of equipment systems and works in power plant, professional
qualifications and working capabilities are improved, meet the requirements of production and business in the new situation.
Management model to be held towards the initiative and flexibility in activities, promoting the capacity of people. Benefits of workers are associated with production and business results, profits and dividends. Thus, saving cost consciousness, striving to increase labor productivity is promoted.
The consultant contract for supervision, training, installation has been done in the past, have enhanced the company reputation and demonstrated the ability of the company in this field.
Strong financial status, can use a big capital for reinvestment.
Young leadership, dare to think and dare to do, high responsibility spirit Weaknesses
Production of the company depends entirely on nature, in recent years the weather usually change accidently, it causes the unstable output .
The reservoirs are regulated by National Electricity Dispatching Centre to benefit for all sector, the company do not active regulation to be more optimal for the company.
Because of changing operation mechanism so the new managers also lack knowledge and management skills as requirement by the company.
Personnel/employees have long time working in the state office but do not dynamic, conservative, stagnation, complacency. Level of employees are not uniform, have experience, but lack of professionals.
The service sector is company's new products so the qualification, professional ability are not high, the ability to work in team are not high. Company is not much interested to marketing, customer management and PR in this area.
Risks of fluctuations exchange rate were very big because company have the long- term loans in the JPY. This risk is not considered in the cost price. Currently in Vietnam, we have no derivatives to prevent this risk.
Requirements to ensure profits and dividends to shareholders is also a pressure for the company because the company has big chartered capital (4,000 billion dong).
Equipment systems in the company are diversified with range of products, including old generation and new generation, which concerntrated notice governor, position controler, DCS control system, new generation digital controller, so it is not easy to catch the using techniques, requiring an annual fee to invest more to training, studying, control the techniques. On the other hand, some type of equipment and materials must be imported so it dependent on the suppliers in prices and deliver time, thus affecting to the repair time and cost price.
Expansion of business requires strengthening human accordently. But the company located in remote areas far from cities so attracting, fostering and retaining talent were very difficult. Current human resources of company is not enough to develop objectives strongly to expand business
Table 2.8 Summary the SWOT matrix and competitive strategies O- Opportunitites
1. Demand on electricity is increasing quickly
2. Opportunity to mobilize capital on the stock market.
3. The providing services market for power plants is large, with high potential 4. Policies to encourage clean energy investments 5. Expanding business to resort service
T- Threats
1. The abnormal weather.
2. Difficult to attract talent 3. More and more participant in power plants structuring.
4. Difficulties to involved in
competitive electric
generation market.
5. The plants provide similar services.
6. Bauxite project
implementation affects water quality.
S- Strengths
1. Two clusters of plants may support production each other
2. Market is stable
3. Low repair, maintenance costs
4. Experienced staff
5. Flexible, efficient management model
6. Company has reputation,
SO combination:
S2, S6 + O1, O2 +O4
=> strategy to expand
production scale,
investment in new power sources, clean energy
ST combination S4, S5, S6 + T3, T5
=> strategy to provide
services for small
hydroelectric power plants in the region.
strong financial status 7. Board of Directors is
young, capable and
experienced in
management W- Weakness
1. Production depends on natural
2. Managers lack
management knowledge, not professional
3. Staff are not qualified, not yet professional,
organizational, low
teamwork skill
4. Exchange rate risks affect the financial situation of the company.
5. Machinery diverse in range of products, not yet manage the technologies of equipment
WO combination W1, W4 + O2, O3, O5
=> strategy to diversify products, multi-sector investment to share the risks.
WT combination
W2, W3, W5 + T2, T3, T5
=> strategy to restructuring organization structure,
training and building
capacity for staff to create a competitive advantage to competitors