3.1 Oriented development
Because the supply in recent years has not demand the higher and higher need of housing and urban, HUD orient to become the greatest supply housing and urban in Vietnam in 5 years.
3.2 Objective of HUD
The objective of HUD 1s to achieve the profit which is higher than its industry profit rate, to preserve and develop the State capital invested in HUD.
3.3. Building strategy 3.3.1. EFE Matrix of HUD
According to the analysis of external environment of HUD above, we have EFE matrix as follows:
Ratio Level of
Key external factors (Company’s Mark
importance
reaction level) 1. Demand for high urbanization
0.2 4 0.8
development.
2. Science and technology development 0.08 2.9 0.232
3. State supporting policies and lendin
PP sự 5 0.15 3.8 0.57
capital sources
4. People’s income, high population 0.15 i 0.48
5. Inflation, economic crisis 0.08 3.2 0.256
6. Environment effects 0.01 1.8 0.018
7. Changing legal environment 0.08 3.4 0.272
8. The industry is attractive and has high 0.06 2.6 0.156
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Ratio Level of
Key external factors (Company’s Mark
importance
reaction level)
| profit rate
9, Weak pressures from buyers and sellers 0.01 Dus 0.025 10. Strong pressures from current
0.1 3 0.3
competitors
11. Diversification of market segments 0.08 3.4 0.272
Total 3.381
Table 3.1: External Factors Evaluation Matrix of HUD
With the total mark of 3.381, the Corporation is having rather good reactions to opportunities and challenges from external environment.
3.3.2. IFE Matrix of HUD
The Corporation’s strengths and weaknesses are put into the following matrix of internal factors evaluation.
Ratio Level of
Internal factors (Company’s Mark
importance
reaction level)
]. Plentiful human resources 0.14 3.8 0.532
2, High qualifications of labor forces, good
management quality 0.12 2.3 0.276
3. Close control system, good business
operation and labor circulation 0.08 3.0 0.240
| 4. Good capital sources, good liquidity 0.15 3.5 0.525
5. Good business results, high profits 0.20 3.5 0.700
5. Effectiveness of cash flow and capital 0.12 2.0 0.240
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Ratio Level of
Internal factors (Company’s Mark
importance
reaction level) usage
6. Good facilities 0.05 2.8 0.140
7. Modern machinery, advanced
construction technologies 0.14 2.1 0.294
i Total 2.947
Table 3.2: Internal Factors Evaluation Matrix of HUD
With the total mark of 2.947, the Corporation has much strength in the respect of internal factors though there are still weaknesses.
3.3.3. IE Matrix of HUD
From the two tables above, we have the I.E Matrix as follows:
The mark of IFE
Strong Medium Weak
3.0-4.0 1.0 - 2.9 1.0-1.9
High 3.0 - 4.0 The mark of
EFE Medium
2.0 - 2.9 Low 1.0-1.9
Figure 3.3: IE Matrix of HUD
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The matrix of internal and external factors shows that appropriate strategy for HUD is focus growth.
3.3.4. SWOT matrix of HUD
From the aforesaid analysis, we have the following SWOT matrix:
STRENGTHS (S)
1. Having known by the trade mark in current market in the recent years.
2. Plentiful human resources, suitable organization structure.
3. Powerful financial sources, which meeting
WEAKNESSES (W) 1. Workers not yet have high skills; management staff has not yet reached desired qualifications.
2. There are still problems in the usage and transfer of labor forces.
3. Not much investment in
SWOT MATRIX State requirements for big | advanced machinery and
projects. technology
4. Ability to mobilize 4. Analysis, plans to
capital for large effectively use capital is not implementation projects. | high
5. Relations with
government agencies and partners very well.
6. Have products with high quality
OPPORTUNITIES (QO) SO STRATEGIES WO STRATEGIES
1. Housing and urban S2, S4, S5, S6 + O1, O3, | WI,W2,W3 + OI,O4,O6:
development is a burning issue
and a spearhead industry. O4: Creating luxury urban
centers, building resorts at Improve the organization and training of human
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2. Stable economy and
politics, developing science and technology.
3. There are many State preferential policies for the industry.
4. Great demand of the people, the society together with the increasing income of the population and the social development in the open -door and integration course
5. Pressures from customers, suppliers, subsitutional
products, potential competitors are not high.
6. New technologies for design, construction, project management.
famous landscape, hotels... =>
Differentiation Strategy S1, S2, S4, S5 + O1, 02, O3, OS, O6 :
Expanding investment and implementation of
projects in other areas, neighboring provinces
=> Market Development Strategy
resources => Enhance
competitiveness Strategy
THREATS (T)
1. Pressures from current competitors are high.
2. Possibility to lag behind in attracting human resources of good quality due to a great number of competitors.
3. Inflation and global ST STRATEGIES S1, S5, S6 + TI, T3, T4, TS:
Established division specializing in the
management of real estate
=> Vertical integration
Strategy. WT STRATEGIES
W1, W3, W4 + T1, T2, T3, T4:
Joint venture with foreign partners to implement the project
=> Joint venture Strategy
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economic crisis in 2009 affect
costs. S1, S2, S6 + T1, T2, T3,
4. Integration process T4, TS:
leads to international Introduction of new competitor from big products, meet more
corporations. needs of customers
5. Policies, legal => Diversification of documentations do not business Strategy
synchronize.
Table 3.4: SWOT Matrix of HUD 3.4. Strategies for HUD
Through analysis and combining elements of the SWOT matrix, there are strategies for HUD to 2015 as bellow:
3.4.1. Differentiation strategy
Taking the strength of plentiful human resources, suitable organization structure, high quality and burning in housing and urban industry, HUD can diffrerenlize product by creating luxury urban centres, buiding resorts at famous landscapes, hotels...
3.4.2. Market development strategy
HUD has created its own trademark in the housing and real estate business industry while the market is still potential and a spearhead industry. With powerful financial sources which can meet the State requirements for big projects so there are opportunities to approach great land sources, capital sources with preferential interests. HUD has a plentiful labor force which is ready to serve and meet the requirements for many projects
with the high demand of the people and the society.
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3.4.3. Enhance competitiveness strategy
Housing and urban development is developing with greater and greater demand but workers are not yet skillful enough. Science and technology is developing but the Corporation not yet invests a lot in advanced machinery and technologies to meet the environmental requirements in construction. The capacility of analysis, making plans to effectively use capital is not high. In oder to limit these weaknesses and take advantage of opportunities, it takes a lot of time.
3.4.4. Vertical integration Strategy
An important activity in the vertical integration strategy is to strengthen the existing products, improve the management process to strengthen the financial investment, human resources, to achieve robust stability of the activities of the core of the company.
3.4.5. Diversifying business Strategy
Implement this strategy by diversifying the products of their property, HUD will offer a variety of real estate products to further meet the needs of customers.
Clearly define each group of customers to make products fit, improved from the quality improvements in each product to meet the diversified demands of customers.
Implementing the investment finance for the sector, products and services related to real estate: offices for rent, luxury apartments for rent, and lease the conference.
3.4.6. Joint venture Strategy
Joint ventures with foreign partners and to make some real estate projects. Corporating to well-known real estate firms, HUD can learn experience of project management, technology and strong financial resources of these groups.
3.5. Selecting Strategy for HUD
Based on the criteria by Board of Directors has determined, based parameters evaluated elements inside, outside, model SWOT Matrix, the authors have table as follows:
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Factors Rate Differencelize Market Enhance Vertical Diversify Joint
products developme | competitiven | integration business venture
Strategy nt Strategy | ess Strategy Strategy Strategy Strategy
Gain 0.2 | 4 0.8 5s [I1 |4 [08 |3 | 06 | 5 [1 |4 108 Risk 03 | 3 0.9 4 |12| 3 | 09 | 4 | 12 | 2 |15| 2 | 06
| Expense 02 | 3 0.6 4 |08 | 4 | 08 |3 | 06 |2 | I1 |5 [1
“Appropriate | 0.2 | 4 0.8 3 |06| 3 | 06 | 4 | 08 | 3 | 1 | 2 104
| Timebound | 01 | 4 0.4 5 105} 3 | 03 | 5 | 05 | 4 |05| 5 | 05 5 Total marks 1 18 | 3.5 | 21 | 41] 17 | 3.4 | 19 | 3.7 | 16] 5 | 18 | 3.3
Scale: 0.1 Weakest; 2.3 = Average, 4 = Good; 5 = Very good Table 3.5. Scoring criteria of Strategy
Table grading factors with reference to the consultants with HUD strategy planning, Group has been the choice for business strategy for HUD is market development.
3.6. Strategic solutions:
To develop with the current opportunities and threats, the Corporation needs to use strengths to take advantage of the opportunities.
3.6.1. Human resources solutions
- To provide training courses to improve workers’ skills and qualifications.
- To provide refreshment courses on management quality and operation improvement.
- To build up the Corporation a learning organization with an open working atmosphere to create a good working environment to attract and maintain talented staff.
- To enhance capacities of staff, from management level to workers so that they can directly deal with all stages of investment projects, from investment preparation, investment implementation and project completion according to the State laws and regulations.
3.6.2. Financial solutions
- To focus on capital sources, efficiency of capital sources spending.
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- To make plans for expenditures, capital arrangements and effective circulation of cash for each project.
- To strictly manage over input costs, corporate management costs in order to push up turnover for more profits.
3.6.3. Marketing solutions:
- Marketing activities should always be a step forwards. The acknowledgement and making use of this concept is of extreme importance, especially for big investments activities such as the building up of new urban areas, or those with long-time investment, complicated products and difficulties to avoid and overcome errors.
- To ensure sufficient conditions and sources for marketing management at all levels in the professional and modern manner.
- To regularly evaluate the efficiency of marketing management in order to find out strengths to develop and weaknesses to overcome.
- State regulations on housing business should be perfected to create pressures, environment and conditions for marketing management to promote its role in enhancing the competitiveness of the Corporation.
- To carry out market studies in the whole country. To study the population, social issues, geographical characteristics, habits, traditions, economic characteristics and development tendency of each locality.
- To make studies and analysis of approved planning to find investment opportunities for housing and urban development; To exploit with the most effectiveness areas allocated by studying and designing properly; To take part in the development of housing fund of the City.
- To balance economic, financial, technical and labor capacities in order to define investment projects to be developed in | year, 5 years and 10 years.
- To make short-term and long-term financial and operation plans.
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3.6.4. Investment solutions:
- To collaborate with relevant bodies to solve difficulties, speed up investment preparation, site clearance of feasible projects which already get agreements on location where there is high demand for housing.
- To make investment plan in economic zones, industrial parks in compliance with the common progress of development of these areas in order to meet the demand for housing of workers, laborers in the future when the areas are put into operation.
- To study and propose to State competent authorities policies and mechanisms to push up housing development industry.
- To speed up current projects which are feasible with short payback period. In 2009, the Corporation has studied and invested in 71 projects with the total investment capital of 4,400 billion Vietnamese dongs. Of which, 6 projects are completed in 2009, 15 on-going projects, 8 projects are newly started, 42 projects are under research and investment preparation. The Corporation has put into operation Song Thao Cement Plant with the success of the implementation of the EPC pilot model and the program on domesticization of cement mechanical and machinery manufacture.
+ To develop social housing: this is a new market segment to meet the demand for housing of the majority of population. This field has been receiving a lot of State tax, policy and credit incentives. In November 2009, HUD Corporation held the ground- breaking ceremony of the Welfare Housing Project in Chanh My-Binh Duong Ecological Urban Area, consisting of 7 blocks of 12-storey buildings, 1,507 apartments, 95.000mˆ floor areas. In December 2009, it started the social housing project in Le Thai To — Bac Ninh Province New Urban Area, consisting of: 2 blocks of 6-storey buildings, 220 apartments, 17,00m° floor area. The Corporation is preparing for a social housing project in Thanh Lam-Dai Thinh 2 New Urban Area, housing project in Chi Tien commune, Yen Noi commune - Thanh Ba-Phu Tho District - Hanoi, consisting of 2 blocks of 4-storey buildings, a kindergarten, a cultural house, a medical station, 96 apartments, 5,750m?
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floor area. Besides, the Corporation is studying social housing programs in Thanh Hoa and Da Nang provinces; building houses for students in Phap Van, My Dinh I projects with the Hanoi Department of Construction as the investor. The Corporation also delivers 82,000m* non-refundable areas at Phap Van, My Dinh II, Viet Hung projects to the Hanoi authority for building social housing.
+ To invest in some big projects: These are big projects of high economic efficiency and good trademark for the Corporation. It focuses on the market segment of superior products to improve its capacities. (HUD Tower is a 32-storey office building of Grade A, Anh Duong Project in Da Nang which is a 45-storey apartment building on the beach, CC2 Van Quan building with 36 storeys).
3.6.5. Organization solutions
- To unceasingly perfect the management system, check the functions and duties of each department in order to perfect the organization of an enterprise specializing in housing and urban development.
- To promote business and production activities which support housing business of the Corporation such as: designing, construction, material production, management services ..., especially perfect the model of professional housing and urban services management.
3.7. The road map for implement strategy of HUD
- Firstly, the Corporation’s members must be strong, of which 100% State-owned enterprises must play the decisive role. At the same time, the Corporation concentrates on the following investment directions in the coming period: investment together with sustainable development, attaching special importance to economic effectiveness, preserving and growing capital, and diversified business. To follow these directions, each member company has to make use of its internal forces, mobilize all capital sources, actively apply new construction technologies, invest in modern equipment and machinery, push up decentralization with responsibilities of investment and construction partners, reduce administrative interferences in specific activities./.
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Table 3.6: Roadmap for making and implementing strategy
Items of Targets Time to Requirements | Department in
Work implement charge
1. Human - Workers have Yearly from | - Organizing Human _ resources
resources skillful 2010-2015 | training department and
qualifications courses heads of other
- Excellent - Rewarding departments
management team good samples
- Being an eager- - Organizing
to-learn skill contest
organization - Hiring
counselors, trainers
2. Finance - High profit Yearly from | -|Saving costs | Financial
- Good capital 2010-2015 | - Increasing department and
spending turnover financial board
- Increasing debt take-back 3. - Investing in good | 2010-2011 | - Updating
Investment | projects State
- Making the most information
of State incentive and data on
policies planning, site
clearance.
4. Marketing |- Making the | Yearly from | - Making Marketing and IT Corporation to | 2010-2015 | marketing departments have long and firm strategies and
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position in the plans
market. — Creating - Carrying out
connections marketing
between _ business strategies and
and production plans
activities and the
market.
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