2.1. Analysis of macro-environment 2.1.1 Economic environment
Before 2009, Vietnam’s economic growth rate was always in excess of 7% per annum. However, since 2009 Vietnamese economy has faced big challenges due to the global financial crisis. High inflation rate, price increase and irregular price fluctuation of steel, petrol, cement, fertilizer, input material, etc. has caused many difficulties for the economy. Besides, Government’s monetary tightening policy has restricted the credit reserve for economic development and created difficulties for total banking system in liquidity. capital mobilization and credit investment.
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Competitiveness of the economy. many sectors and products is low although Vietnam has joined the WTO.
The economy is still based on traditional divisional structure. The shift in divisional, regional and product structure is inappropriate and does not fully exploit the strength of each locality and region in the country.
Being one of the leading corporations in the field of highway and bridge construction, Thang Long Construction Corporation is directly under the control of national economic environment on operation and development orientation.
2.1.2. Technological environment
There is a technology gap between Vietnam and the world. Being aware of its technological under-development and risk of competition in the future, the civil engineering is currently replacing backward technology with modern technology.
However, it also causes disadvantages to the companies which have not fully recovered capital from the use of the old technology and now have to invest in the new technology for competition (they not only mobilize financial resources for new technology investment but also seek jobs for asset depreciation, etc.).
2.1.3. Social-cultural environment:
The Corporation mainly focuses on domestic market and some parts of Indochina market (Laos, Cambodia, etc.)
- After global integration, Vietnam is increasingly developing. The growing dernand for travel of people leads to the need of constructing big and modern traffic works, which facilitates the development of Thang Long Construction Corporation.
2.1.4. Legal-political environment
The change in legal system, regulations and law on adjusting business operation of the Corporation can significantly affect business result of the Corporation and shareholders.
Vietnam is a developing country and in progress towards completion of the legal sysitem. Therefore, law documents are still insufficient. overlapped and unclear. As a resiult, provisions of the laws have high ability to be changed.
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For civil engineering, the Government approved the legislation on this field to contribute to accelerating the development of the industry (concretized by Decrees,
Circulars, etc.).
However, our legal system still has some certain drawbacks. Moreover, law enforcement is ineffective, a healthy environment for construction development has not been created and some quality managers of some construction works were in league together to reduce the quality of the construction works and the prestige of the industry.
2.2. Analysis of industry environment
Based on the expected data and calculation on total demand for construction of traffic works from 2010 to 2015, the following table is drawn up:
Table 2.2 Estimating total demand for construction of traffic work up to 2017 Unit: Billion Vietnam Dong
Year
2013 2014 2015 2016
Indicators =
Total demand 108,000 | 129,600 162,000 | 207,000 279,000 Total demand having
ability to pay 108,000 | 129,600 162,000 | 207,000 279,000 Market share having
ability to be dominated
by TLG 7.00% 7.90% 8.70% 10.20% 11.50%
(Absolute value) 7,560 10,238 14,094 21,114 32,085
(Source: Department of Planning — Ministry of Transport)
However, besides achieved advantages, the civil engineering still faced some difficulties in 2010:
+ Investment capital was not adequately provided for the civil engineering.
Especially since the end of 2009, the Government has carried out the policy of
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macroeconomics adjustment and public investment reduction, which made many projects in portfolio stop the construction.
*/ the development of urban infrastructure was inappropriate and asynchronous, and the manpower did not timely meet the requirement of the development. As a result, a large number of projects were completed behind schedule.
+/ Population allocation was unreasonable.
+/ Labor accidents still happened, which affected the prestige of the industry (Can lho Bridge, Sai Gon- Trung Luong Highway Construction Project, etc.).
2.2.1. Analysis of competitors.
Despite a large number of construction enterprises on the market, State owned enterprises such as Civil Engineering Construction Corporations (Cienco 1, Cienco4, Cienco 5, Cienco 6, Cienco 8, Vinawaco) still account for large proportion of market share because they have operated in this sector for ages and received preference from the Government.
- However, plenty of enterprises have paid attention to infrastructure engineering field in recent years. Thus, the intense competition between many companies on construction market is taking place.
- The current competitors of Thang Long Construction Corporation are classified into three main types as follows:
- Construction Corporations under Ministries - Foreign enterprises
- Hidden competitors
* Construction Corporations under Ministries:
The Corporation’s competitive advantage is considerable but not the biggest in comparison with other enterprises. Hence, the Corporation is facing challenges in gaining competitive advantage on the construction market. Due to scope of this thesis, we would like to suggest some corporations under Ministry of Transport.
- Civil Engineering Construction Corporation No.1 referred to as Cienco | - Civil Engineering Construction Corporation No.4 referred to as Cienco 4
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- Civil Engineering Construction Corporation No.5 referred to as Cienco 5 - Civil Engineering Construction Corporation No.6 referred to as Cienco 6 - Civil Engineering Construction Corporation No.8 referred to as Cienco 8s
Such above are the corporations which have operated effectively in transport engineering construction for years. These corporations have constructed many different projects such as airport, dockyard, bridge, highway, etc., in which there are many foreign joint venture projects, international bidding projects with large scale and high quality.
* Financial status of the Corporations:
Table 2.3 Financial statement of the Corporations in 2011
Unit: dong
[ có. : Debt to Self-
Accounts . Owner’s . l
No. Name avable Capital equit equity | financing
eves ae ew ratio ratio
8300 | 7789 | 2464 5 5