VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS CHU LE TRUNG BUILDING STRATEGY FOR PETROVIETNAM UNIVERSITY IN STAGE 2011 – 2015 Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisor: Dr Do Xuan Truong Hanoi – 2011 TABLE OF CONTENT ACKNOWLEDGEMENTS .i ABSTRACT ii TÓM TẮT .iv TABLE OF CONTENT vi LIST OF ABBREVIATIONS ix LIST OF TABLES x LIST OF FIGURES .xi INTRODUCTION xii Necessity of the thesis xii Objectives of the thesis xii Research Questions xii Scope of works xiii Data source xiii Expected Results xiii Structure of the thesis xiii CHAPTER 1: LITERATURE REVIEW 1 Strategy and role of strategy 1.1 Definition of strategy 1.2 Role of strategy 2 Strategic management process 3 Strategic vision and business mission vi Setting objectives External environment analysis 5.1 Macro environment analysis 5.2 Industry analysis: Porter‟s Five Forces model Internal analysis 15 6.1 Value chain analysis 15 6.2 Process to identify sustainable competitive advantages 17 SWOT analysis 18 7.1 What is SWOT? 18 7.2 SWOT matrix 20 Strategy selection 20 8.1 Suitability 20 8.2 Acceptability 21 8.3 Feasibility 21 Formulating a strategy 22 9.1 Levels of strategy - The Strategy making pyramid 22 9.2 Specific strategy at different levels 23 10 Strategy implementation 29 11 Strategy evaluation 30 CHAPTER 2: ANALYZE THE CASE OF 31 PETROVIETNAM UNIVERSITY - PVU 31 PVU Project – The imperative 31 1.1 Overview about PetroVietnam – PVN 32 vii 1.2 Overview about PetroVietnam University – PVU 46 External environment analysis 54 2.1 2.2 Macro analysis – PEST model 54 Industry analysis – Five forces model 60 SWOT analysis 66 3.1 Strengths 66 3.2 Weeknesses 67 3.3 Oppotunities 69 3.4 Threats 70 CHAPTER 3: STRATEGY FORMULATION AND IMPLEMETATION 72 Strategy formulation 72 1.1 1.2 Strategy formulation 77 1.3 SWOT Matrix 72 Strategy slection 82 Implementation 85 2.1 Action plan of Organisational management & Policy strategy 86 2.2 Action plan of Marketing strategy 88 CONCLUSION 92 REFERENCES 93 APPENDIX 96 APPENDIX 97 APPENDIX 98 viii LIST OF ABBREVIATIONS PVN Vietnam Oil and Gas Group PVU PetroVietnam University MOET Ministry of Education and Training SWOT Strengths, Weaknesses, Opportunities, Threats GREAT Gain, Risk, Expense, Achievable, Time PEST Politics, Economics, Social, Technology JVC Join Venture Company IT Information Technology ICT Information Communication Technology JOT On the job training JOC Join Operation Company GDP Gross Domestic Product DPU Danang Polytechnic University HPU Ho Chi Minh Polytechnic University HUMG Hanoi University of Mining and Geology HUT Hanoi University of Technology PVMTC PetroVietnam Manpower Training College PVFC PetroVietnam Finance Company VPI Vietnam Petroleum Institute PR Public Relation ABET Accreditation Board for Engineering and Technology TIEC Texas International Education Consortium ix LIST OF TABLES Table 1.1 Industry‟s entry and exit barriers Table 1.2 Bargaining powers of suppliers and buyers Table 1.3 Model of SWOT matrix Table 1.4 Appropriate strategies selection (GREAT model) Table 2.1 Estimated number of employees needed in period 2016 – 2025 of PVN Table 2.2 Vietnam GDP Growth rate 2006 - 2010 Table 2.3 Statistics of Vietnam University Education Table 2.4 SWOT Analysis Table 3.1 Strengths – Opportunities Strategies ( S – O strategies) Table 3.2 Strengths – Threats Strategies (S – T strategies) Table 3.3 Weaknesses – Opportunities strategies ( W – O strategies) Table 3.4 Weaknesses – Threats Strategies ( W – T strategies) Table 3.5 PVU‟s appropriate strategies selection (GREAT model) Table 3.6 Action plan of Organizational management & Policy strategy Table 3.7 Action plan of Marketing strategy x LIST OF FIGURES Figure 1.1 Strategic management Model Figure 1.2 External environment Figure 1.3 Five Forces Model Figure 1.4 Value chain Figure 1.5 Process to identify sustainable competitive advantages Figure 1.6 The strategic making pyramid model in a diversified company Figure 1.7 Model of business strategies Figure 2.1 Logo Petro Vietnam Figure 2.2 The Number of employees of PVN in 2010 Figure 2.3 The structure and level of labor PVN in 2010 Figure 2.4 The structure of working age PVN in 2010 Figure 2.5 Logo PetroVietnam University Figure 2.6 3D model views of PVU‟s Main campus in Vinh Phuc Figure 2.7 Socialize education model Figure 2.8 Vietnam GDP Growth rate 2006 – 2010 Figure 2.9 Vietnam Population Pyramid 2010 xi INTRODUCTION This part will give an introduction to readers about the thesis Firstly, the necessity of the thesis is mentioned, next are objectives of the thesis, then researches questions are raised up, followed by scope of work, methodology, thesis„s contributions, expected results, further research directions and limitations of the thesis Finally, the thesis structure is presented in order to help readers have an over-all picture of the whole study Necessity of the thesis - PVU has just been established in the early of 2011, PVU have the business level strategy very clear is Diffirentiation strategy But they didn‟t have clear functional strategies and “what are most important fields must be focus” is big question for them in this stage - PVN and PVU‟s managers desire to build PVU as a international university; become one of the best universities in Vietnam and area on 2020s - Almost international universities have the clear strategy This shows the necessity of building the strategy in order to make differences with other universities as well as designing a development pathlength for the university itself Objectives of the thesis - Review the theory in strategy and strategic management - Analyze the case of PetroVietnam University in the first stage - Propose some recommendations in order to build the strategy of PVN in stage 2011-2015 Research Questions - What is strategy and what is the role of strategy? - Which factors will affect to build strategy of PVU - Which strategy will be suitable for PVU in the very first state xii Scope of works - Field: Strategy and strategy management - Space: All activities of PVU - Time: About years from the establishment 2011 - 2015 Data source - Strategy in new stage of PVN - Consulting project of PVN with TIEC - Internet, books and ebooks - Experts (Manager of PVU, Educational expert…) Expected Results - Giving out a general picture of the educational field - Giving out a deep analysis about the case of PVU - Propose some recommendations for functional level strategy for PVU in the stage 2011 - 2015 Structure of the thesis INTRODUCTION CHAPTER I: LITERATURE REVIEW CHAPTER II: ANALYSE THE CASE OF PETROVIETNAM UNIVERSITY CHAPTER III: STRATEGY FORMULATION AND RECOMENDATION CONCLUSION REFERENCE APPENDIX xiii CHAPTER 1: LITERATURE REVIEW Literature review is an important chapter of any thesis; it helps readers to remind about strategic theories relating to the thesis‟s topic In this chapter, the theory in strategy and strategic management will be reviewed as a basic for analyses in next chapters Strategy and role of strategy 1.1 Definition of strategy Strategy is a broad term which covers all of the activities of an organization In the theoretical base, there are various definitions about strategy Professor Arthur Thompson and Strickland, in their book Strategic Management1 defined “strategy” as a “game plan” management has for positioning the company in its chosen market arena, competing successfully, satisfying customers, and achieving good business performance In this definition, the term of “positioning” is emphasized, as Thompson saw the importance of identifying clearly the positioning of the company in the market Dr Erica Olsen, in her book “Strategic Planning for Dummies”, has given another definition: “Strategy means consciously choosing to be clear about your company‟s direction in relation to what‟s happening in the dynamic environment With this knowledge, you‟re in a much better position to respond proactively to the changing environment” Professor Michael L.Porter of Harvard University, USA, has stated his own viewpoints in the article “What is strategy?” in Harvard Business Review In his opinion, strategy is performing different activities from rivals‟ or performing similar activities in different ways It is the creation of a unique and valuable Arthur Thompson and Stricklands, Strategic Management: Concepts and Cases,10th edition, McGraw Hill 1.3.2 GREAT Model Table 3.5: PVU’s appropriate strategies selection (GREAT model) Organizational Criteria Weight management & Policy Human resources Training Infrastructure program & Admission Science Research Finance Marketing Gain 0.3 1.5 1.2 0.9 1.2 0.9 1.2 1.2 Risk 0.2 0.6 0.6 0.8 0.6 0.4 0.4 0.8 Expense 0.2 0.8 0.4 0.2 0.4 0.6 0.6 0.6 Achievable 0.2 0.6 0.6 0.8 0.6 0.6 0.6 0.8 Time 0.1 0.2 0.2 0.2 0.3 0.3 0.2 0.3 Total: 3.7 2.9 3.1 2.8 3.7 84 Implementation In order to achieve the objectives, PVU need a strong investment in both of people and money for all activities But in the first stage, there are groups were considered as major factors will be influence on the development of PVU in next stages is: Organizational structure & Policies and Marketing & Brand development needs must be emphasized In the framework of this thesis, I will outline some general ideas of action plans to achieve the target of solutions 85 2.1 Action plan of Organisational management & Policy strategy Table 3.6: Action plan of Organisational management & Policy strategy Objectives of Organizational management & Policy strategy - To create the active within the organization and operation of PVU - To maximize the resources of PVN - To improve the management of PVU activities TIME TASK Establishing Task force 2011 2011 OBJECTIVE To establish a specialized department that is in charge CONTENT - Building work contents - Implementing - Reporting NOTES This task necessarily needs the participation of the principal and leaders of all faculty, departments and centers in PVU Building action To build the basis for The plans must meet the following plans implementing, monitoring and standards: adjusting works - Principles of deploying and applying - The jobs was done and should be conducted 86 - Involving staff - Time for each stage - Costs - Proposals for implementing Deployment of To create the active within the Building these contents: work content organization and operation of - Developing the organization PVU and operation regulations To maximize the resources of - Regulations on coordinating PVN with the Petroleum Institute PVU is a affiliate under PVN‟s leading so PVU has many policies decided by PVN To improve the management of PVU activities Application and adjustment In the process Applying policies into fraction and gradually adjusting the word accordingly - - 2011-2015 Deploying department at PVU must stay in touch and PVN affiliates with the corresponding Organizational structure and departments at PVN functions of each department of PVU Quality assurance system, ISO The policy upon completion need There is a certain to get feedback from experts, then distance between the apply and adjust if necessary formulation and the application of a policy Therefore, it must be evaluated and adjusted so that it best fits the actual situation 87 2.2 Action plan of Marketing strategy Table 3.7: Action plan of Marketing strategy Objectives of Organizational management & Policy strategy - To develop and promote the image of the PVU - To promote strengths of the PVU - To contribute to building organizational culture Milestone - Stage 1: 2011 – 2012 PVU is positioning as a leading University of petroleum It was evidenced by the group's vision and the strategic investment from the beginning Reason: During this period, PVU is newly established, everything from facilities to programs are in the process of construction, students have not been graduated, so the advertising target will emphasize on the mission and vision of PVN and PVU - Stage 2: 2013 – 2014 88  Maintaining the positioning in Stage  Communicating based on the quality of teaching and the caring to students from all aspects of life to the spirit Reason: All activities of PVU are student-centered The image of PVU will be built up by training quality and student activities - Stage 3: 2015  Maintaining the positioning in Stage and Stage  Demonstrating the effective training through the quality of graduates Reason: This is the most important stage because the quality of a university must be measured by the quality of output students Especially the first graduates will receive special attention from the society Therefore in this stage, PVU staff needs to coordinate in all activities in order to prove the validity of PVU objectives STAGE TOPIC MAIN PURPOSES - 2011-2012 ATTRACTION the SOLUTIONS Forming culture corporate - - Especially concentrating on admission quality - - Attracting qualified staff and teachers 89 - NOTES Clarifying core values of the During this period, the PVU most important thing Establishing a specialized is building the model organizational department on Marketing and of culture and clarifying PR the core values That Building a brand identity will be the basis for - Developing internal PR activities - Building organizations about all communication spirit life (Youth Union, activities in the Student Association, Labor following year Union…) - Full Disclosing PVU policies to attract qualified staff, faculty - Building internal PR plans (Arts, sports, internal newspaper …) - - Promoting the strength of the Youth Union, the Student Association through student activities 2013-2014 Starting communication to the outside through the training quality and student life Developing PR activities in both the depth and the width - Collaborating with other strong universities with related training fields, PVN affiliates and high schools to promote in the most efficient way (Open day, Field Trip, Internship ) DEVELOPING 90 With the purpose that students are the center of all activities, PVU must have efficient information and internal communication system (internal PR tools: Youth Union, Student Association, events, student newspapers ) to meet the students‟ needs and aspirations, which is the base for PVU to have appropriate policies to utilize its activities Proving the training quality through the quality of students - 2015 – then SPREADING 91 Strengthening relationships Society concerns with businesses specially about this Good career counseling for stage PVU needs to establish advisory and students career-oriented departments to best support students graduation CONCLUSION Building strategy for the early stage of the development is very important for all organizations The strategy will draw the pathway for development of the organizations in following stages This requires working with a determination of both collective and foremost a leader with strategic thinking As an staff member of the PVU, I realize that I should be responsible and contribute to the overall development of the organization, therefore I chose the title: “BUILDING STRATEGY FOR PETROVIETNAM UNIVERSITY IN STAGE 2011 – 2015” in the hope that the analysis and my recommendations would help PVU in improving the quality of work in the future The basics of strategic management are addressed in this thesis It also has a detailed analysis of factors affecting the development strategy of PVU It also proposed solutions to promote the strengths and how to minimize the limitations to achieve the goals of PVU During the time working on the thesis, I have received enthusiastic help and supports from the supervisor, who is also my colleague at PVU Better luck, in the implementation process I have the opportunity to meet some leading experts in the field of education and Oil and Gas; they have contributed their precious experience to the completion of this thesis However, due to limited time, in the thesis it couldn‟t avoid shortcomings It is expected that the reviewers and examiners to give comments and ideas to support this thesis to actually become a product applicable to the PVU‟s development 92 REFERENCES Vietnamese Accelerate Development Strategy of PVN in stage 2015 to 2025 (2010) Breakthrough Solutions for human resources of PVN (2010) The strategy of training and human resource development period 2011-2020 and toward to 2025 Feasible Project for the Establishment of PetroVietnam University (2009) Final report of Overall consulting of PVU project (2010) Report on results of PVN‟s Management and Training 2010 and plan for 2011 (02/2011) Thematic report for HRM and wages of PVN (02/2011) Report of Ministry of Education & Training to National Assembly (2009) Report of the Conference PVN‟s HRM in period 2006-2010 (2011) English 10 Arthur Thompson and Strickland (University of Alabama), (1999), Strategic Management: Concepts and Cases, 10th edition, McGraw Hill Companies 11 Charles W.L Hill (University of Washington) and Gareth R Jones (Texas A&M University), (2005), Strategic management – An integrated approach, 4th edition, Houghton Mifflin Company, New York 93 12 John A Pearce II and Richard B Robison, (University of Phonenix), (2005), Strategic management – Formulation, Implementation and Control, 7th edition, McGraw Hill Companies 13 Alex Miller, Gregory G Dess (1996), “Strategic management”, McGraw-Hill, New York 14 Michael Porter (1998), “Competitive strategy”, Free Press, New York 15 Michael Porter (1996), “What Is Strategy?”, Harvard Business Review, November-December 1999, Harvard university, Massachusetts 16 Porter, M E (Jan 2008), The Five Competitive Forces that Shape Strategy, Harvard Business Review 17 R Charan, G Colvin (1999), “Why CEOs Fail”, Fortune Magazine, 21 Jun 1999 18 I Cobbold & G Lawrie (2001), “Why only one third of UK companies achieve strategic success?”, 2GC Ltd., May 2001 Website: 19 http://www.wikipedia.org/wiki/Strategy 20 http://www.cia.gov 21 http://www.gso.gov.vn 22 http:// www.moet.gov.vn 23 http:// www.pvn.vn 24 http:// www.pvu.edu.vn 94 Interviewees: 25 Dr George Manos 26 Prof Dr Dinh Thi Ngo 27 Dr Nguyen Le To Nga 95 APPENDIX 1 Prof Dr DINH THI NGO - Prof, Department of Petrochemical Technology - Institute of Chemical Engineering - Hanoi University of Technology - No Dai Co Viet street, Hai Ba Trung District, Hanoi, Vietnam 1.1 Education - Graduated from Tashkent University, Tashkent, 12/1074 in Organic - Got PhD degree in Moscow in 1987 - Became a Associated Professor in 1992 and Professor in 2009 1.2 Experiences in training and education in Oil and gas fields: - 35 years experience in education and training in Petrochemical Field - She has been manager of numbers of Training and Education program for other universities in Vietnam, Thailand and UK - She helped The University of Industry, Ho Chi Minh city to building the organizational structure and the training program in 2005 96 APPENDIX 2 Dr NGUYEN LE TO NGA - Division of Petroleum processing - PetroVietnam - 18 Lang Ha street, Hanoi, Vietnam 2.1 Education - Graduated from Hanoi University of Science and Technology, Vietnam - Got PhD degree in Université Pierre et Marie Curie - Paris 6, France 2.2 Experiences in Oil and Gas management - 2001-2002 Vietnam Petroleum Institute (VPI) - 2002-2008 Vietnam National Petroleum Corporation - 2008-now PetroVietnam, division of Petroleum processing - With 12 years of experience, she has involved in reviewing many projects of Oil and Gas processing, managing some designing projects 97 APPENDIX 3 Dr GEORGE MANOS - Senior Lecturer, University College London - Department of Chemical Engineering - Torrington Place, London WC1E 7JE, United Kingdom 3.1 Education - PhD, University Erlangen-Nuremberg, Germany, 1989 - Diploma in PetroChemical Engineering, Aristotle University THessaloniki, Greece, 1984 - Awards o Greek National Scholarship Foundation, 1979, 1982-84 o Scholarship from the German Academic Exchange Council (DAAD), 1985-89 3.2 Experience in chemical engineering field: - Dr George Manos graduated from Aristotelian University of Thessaloniki, Greece in 1984 Dr Manos worked as Production and Development Manager of Petroleum Products in Vivechrom, member of the Akzo-Nobel group - Dr Manos joined the Department of Chemical Engineering at UCL in 1998, top 5th best Universities of UK and is currently a Senior Lecturer - Having years working as manager in Chemical Engineering field and 13 years working in education and training field, Dr George Manos has involved in many projects in Petrochemical and Chemical Engineering field in many countries - He is now one of the key people of Sterling Group management board, a group of 19 prestigious universities of science and technology in The United Kingdom, who annual go to Vietnam for education conferences 98 ... Operating in Finance, banking, insurance, securities fields; o Manpower training and supplying in petroleum fields and labor export; o Operating in Hotel, Travel, Office business; 35 1.1.2 Petrovietnam. .. competitive advantage in comparison with other rivals in a single business or in an industry The responsibility of making business strategy belongs to businesslevel managers Business strategy based... sites; o Consulting in construction and investment, designing the petroleum and civil projects, manufacturing and trading construction materials; o Investing in real estate; o Investing in power projects;