GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJEC REPORT BUILIDING BUSINESS STRATEGY FOR PETRO VIET NAM NGHE AN CONSTRUCTION JOINT STOCK COMPANY FROM 2010 TO 2015 Group No Student’s name: Phan Hai Trieu Hoang Trung Hung Le Thanh Cao Cao Thi Thanh Long VINH 2010 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 TABLE OF CONTENT TABLE OF CONTENT LIST OF ABBREVIATION .5 LIST OF TABLE .6 LIST OF FIGURE INTRODUCTION .8 The necessity for research Research Objectives Objects and Scope of Research Research Methodology Research Structure CHAPTER I: THEORETICAL FOUNADTION FOR BUILDING BUSINESS STRATEGY .10 General theory of business strategy .10 1.1 Definition 10 1.2 Roles of business strategy 11 Procedures for building business strategy .12 2.1 Defining vision, mission, and objectives of business 12 2.2 Assessing external environment 13 2.2.1 Macro environment .13 2.2.2 Sector environments 15 2.3 Internal Analysis 17 2.3.1 Analysis of finance .17 2.3.2 Analysis of human resource 17 2.3.3 Analysis of physical infrastructure and technology 17 2.3.4 Competitor Analysis .17 2.4 Models of strategy Analysis 17 2.4.1 SWOT Matrix .17 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 2.4.2 BCG Matrix 18 2.4.3 McKinsey Matrix- GE (General Electric) .19 2.5 Selection of business strategy 21 2.5.1 Business-level Strategy 21 i Cost leadership strategy .21 ii Differentiation strategy .22 iii Focus strategy 23 2.5.2 Corporate-level strategy 24 2.5.2.1 Integration strategy 24 a Vertical reverse integration link 24 b Vertical integration link .25 c Horizontal integration link 25 2.5.2.2 Diversification strategy 25 a Concentric diversification 25 b Horizontal diversification 26 c Integrative diversification 26 CHAPTER II: ANALYSIS OF PVNC’S BUSINESS PERFORMANCE AND ENVIRONMENT 27 2.1 Introduction to Petro Vietnam Nghe An Construction Joint Stock Company .27 2.1.1 The Formation and Development of PVNC 27 2.1.2 Functions and Tasks .28 2.1.3 Orientation of modern development .29 2.1.3.1 Vision 29 2.1.3.2 Mission .29 2.1.3.3 Objectives 30 2.1.4 Organisation structure 31 2.2 Analysis of the external environment 33 2.2.1 Legal and political environment .33 2.2.2 Economic environment 33 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 2.2.3 Demographic and societal environment 34 2.2.4 Technological environment 34 2.3 Key sector environment .34 2.3.1 Suppliers 34 2.3.2 Clients 35 2.3.3 Joining Barriers .35 2.3.4 Replacement Product .36 2.3.5 Competitions 36 2.4 The internal environment of the enterprise .37 2.4.1 The Analysis of PVNC’s resources 37 2.4.1.1 Human Resource 37 2.4.1.2 Business results and financial situation: 37 a) Installation: 38 b) Real estate business 40 2.4.1.3 Physical infrastructure and technology 44 2.4.2 Analysis of the competitiveness of PVNC .45 2.5 SWOT analysis 46 2.5.1 Strengths 47 2.5.2 Weaknesses 47 2.5.3 Opportunities 48 2.5.4 Threats .48 CHAPTER III: BUSINESS STRATAGY AND INPLEMENTATION SOLUTIONS FOR PETROVIETNAM NGHE AN CONSTRUCTION JOINT STOCK COMPAY FROM 2010 TO 2015 50 3.1 Business-level strategy choice 50 3.1.1 The BCG growth-share matrix .50 3.1.2 Assessing levels of attractiveness and competitiveness of each sector by McKinsey matrix model .52 3.2 Selecting business strategy for each sector 56 3.3 Building functional strategies 58 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 3.3.1 Restructuring strategy for establishing Nghe An Oil and Gas Construction Joint Stock Corporation 60 3.3.2 Management strategy complying with Cooperation model 62 3.3.3 Strategy of innovation management policy 64 3.3.4 Marketing Strategy 65 3.3.5 Human resource development strategy 65 3.3.6 Science and Technology Development Strategy 66 3.4 Implementation solutions .66 3.4.1 Service and Product Solution 66 3.4.2 Human resource and framework of organization development solution 67 3.4.3 Solution for the investment in the capital construction and improvement of the machine and equipment operation .69 3.4.4 Solutions for the technological science 70 3.4.5 Solution for mobilization and effective use of capital 71 3.5 Itinerary plan to execute the selected strategies 71 CONCLUSION 73 REFERENCES 74 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 LIST OF ABBREVIATION Abbreviation Explaination PVN Petrovietnam Oil and Gas Group PVC Petrovietnam Construction Joint Stock Corporation PVNC ADMIN BCG Matrix Petro Vietnam Nghe An Construction Joint Stock Company Administration Boston Consulting Group Matrix BIDV Bank for Investment and Development of Vietnam DEPT Department HNX Hanoi Securities and Exchange SWOT McKinsey-GE Matrix Strength, Weakness, Opportunity, Threat MC.KINSEY – General Electric Matrix ROA Return On Assets ROE Return On Equity SBU Stratergic Business Unit VND Vietnam Dong HSEQ Health, Safety, Environment, and Quality /74 GROUP Strategy Management CLASS: GAMBA 01.V02 LIST OF TABLE Table Explaination Table 2.1 Financial figures in the period 2007 – 2009 Table 2.2 Some typical construction work operating by the company Table 2.3 Financial report in the year 2009 by PVNC Table 2.4 Table of Machinery capacity of PVNC Table 2.5 A comparison between the competitive competences of the large construction companies in the central part of Vietnam Table 3.2 Attractiveness of the Sector Table 3.3 Assessment of competition capacity of sectors Table 3.5 Revenue ratio of key business sectors of PVNC Table 3.7 List of members of PVNC at the period of September 2010 Table 3.8 List of members of PVNC will planning Table 3.9 The execution plan for selected strategies /74 GROUP Strategy Management CLASS: GAMBA 01.V02 LIST OF FIGURE Figure Explaination Figure 1.1 BCG Matrix of the market share Figure 1.2 MC Kinsey Matrix – GE Figure 1.3 Diagram of the structure of PVNC Figure 3.1 BCG growth-share matrix of PVNC Figure 3.4 Mc Kinsey Matrix of PVNC Figure 3.6 SWOT Matrix of PVNC /74 GROUP Strategy Management CLASS: GAMBA 01.V02 BUILIDING BUSINESS STRATEGY FOR PETRO VIET NAM NGHE AN CONSTRUCTION JOINT STOCK COMPANY FROM 2010 TO 2015 INTRODUCTION The necessity for research In the world of competitive business, we sometimes wonder why some companies are successful while others failed? The answer to this question lies primarily in its capability of building business strategies and maintaining the competitive strength of enterprises Business strategy is a special plan that every business must make a study before going into operation Vietnamese enterprises were mainly established in a centralized planning economy, are being urged to adopt the rules of the global business environment that is very varied and intensively competitive They are still looking for the ways of maintaining and of development They also must accept a series of tests that are sometimes at a price equal to the destiny of the business Petro Vietnam Nghe An Construction Joint-stock Company (PVNC) is one of the most experienced construction companies of Nghe An province as well as of the central region Since joining Petrovietnam Oil and Gas Group - (PVN) in 2007, the company has gained its new position and power to dominate the market beyond the region With long term vision and strong determination, the board has set out many promising development directions However, reality has proven that although a business has a strong determination, even with a potential market yet does not have a proper business strategy will fall in “business traps” causing wastes of resources, lose its core business capacity of competitiveness and eventually go to decline and even bankruptcy Therefore, in order to develop sustainably and to adapt the constantly changing business environment, PVNC needs to quickly build up an appropriate business strategy for its own After studying the situation of production and business activities of PVNC, our group decided to choose the topic "Building the business strategy of the Petro /74 GROUP Strategy Management CLASS: GAMBA 01.V02 Vietnam Nghe An Construction Joint-stock Company - period 2010 - 2015" as our Graduation assignment Research Objectives The purpose of the study presented in our graduation assignment is to specifically analyze the factors affecting the business activities of the Petro Vietnam Nghe An Construction Joint-stock Company so as to build up a business strategy for the period 2010 - 2015 as well as to propose the functional strategies and the specific measures to successfully implement the selected strategy Objects and Scope of Research The object of this research is a joint stock company Petro Vietnam Nghe An Construction Joint-stock Company, which is part of Petro Vietnam Construction Jointstock Corporation (PVC), whose business activities cover throughout the fields of construction and installation works, including the high buildings in Central provinces Research Methodology This study used the synthesis of qualitative research methods such as observation, interview, group discussion from which to synthesize, analyze and compare the primary and secondary data of business environment and the operations of the Petro Vietnam Nghe An Construction Joint-stock Company Secondary data was collected from various sources such as Petrovietnam Nghe An Construction Joint-stock Company (PVNC), Petrovietnam Construction Jointstock Corporation, Petrovietnam Oil and Gas Group (PVN), Ministry of Construction, Ministry of Industry and Commerce, Ministry of Planning and Investment, Nghe An Statistics Department, newspapers and the Internet Primary data was collected through workshops, seminars, practical working, and interviews with leading officials in the company for more details about the content not be presented in annual reports, and also consulted with the Company managers about several strategic directions of the Company in subsequent years Research Structure This assignment includes three chapters /74 GROUP Strategy Management CLASS: GAMBA 01.V02 projects – Having large land, low investment cost WEAKNESSES (W) COMBINATION (W/O) COMBINATION (W/T) – Management system is not – Restructuring to – Producing material and synchronized and not highly improve management and input mechanic products effective administration capacity – Marketing capacity is weak – Boosting – General labour is a lot but and actively for civil work marketing construction sector researching – Improving not agile in business and appropriate products applying new technology competitiveness – Training and moving in order capacity to avoid from work location to depending too much on promote strength of supporting policies of the human resources Government (Resource from the group’s survey) 3.3.1 Restructuring strategy for establishing Nghe An Oil and Gas Construction Joint Stock Corporation In order to create new position and power for long-term stability development, PVNC will be reconstructed to become Nghe An Petroleum Construction Joint Stock Corporation PVNC now has subsidiaries and tends to establish more to manage and exploit projects where the company is Client Table 3.7 List of members of PVNC at the period of September 2010 Total amount PVNC holds Other shareholders (%) Percentag e held by PVNC 180 91.8 88.2 51% Charter Capital (Billion VND) ID Unit Name Pertrovietnam V.I.P Investment Joint Stock Company 60 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 Pertrovietnam – Nghe An Investment & Trading Joint Stock Company 108 84.24 23.76 78% Petrovietnam cement Joint Stock Company 12/9 200 192.5 7.48 96.2% Hoang Mai Ngoc Joint Stock Company 19 9.31 9.69 49% Pertrovietnam Investment Cua Lo Urban Joint Stock Company 36 17.6 18.4 49% Nghe An Petroleum Construction and Investment Joint Stock Company No.1 30 15.3 14.7 51% Petroleum Industry Construction Infrastructure Investment Joint Stock Company 30 15.3 14.7 51% Material construction and equipment mechanism Joint Stock Company 26 13.26 12.74 51% 629 439.31 189.67 Total Table 3.8 List of members of PVNC will planing (%) Percentage Other held by shareholders PVNC Charter Capital (Billion VND) ID Unit Name Petrovietnam - Ha Tinh Construction and Investment Joint Stock Company Petrivietnam Central Region real estate Joint Stock Company Petrovietnam element handling and installing producing Joint Stock Company Total amount PVNC holds 36 18.36 17.64 51% 100 51 49 51% 22 13.2 8.8 60% Petrovietnam Transportation and Investment Joint Stock Company 160 72 88 45% Pertrovietnam Vinh University Design Consultant, material test Joint Stock Company 10 5.1 4.9 51% 328 159.66 168.34 Total However, responsibilities and functions of these companies have not shown high specialization so that operation management task and operational efficiency is 61 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 still restricted PVNC should restructure complying with general corporation with specific steps as follows: Step 1: increasing holding rate to over 50% in all unit members Step 2: rearranging number of unit members in the specialization direction of four major sector namely real estate investment, construction, construction material and service business related to real estate The material test Joint Stock Company, Vinh University Petroleum Design Consultant will focus on researching and developing new materials, design consultant, geological survey and foundation solution for the whole system PVNC needs to assign tasks, each company specializes in some fields among of petroleum construction, construction of urban area and high-rises, industrial zones; construction material exploitation, construction mechanism and machinery service company (purchase, manufacture, equipment for hire, construction machine, formwork, pole scaffold), real estate trading floor and construction infrastructure management service company (urban management, industrial zone, high-rise) Step 3: Revaluing property of unit members, allocating capital reasonably with assigned functions and responsibility and scope of activities Damaged property will be repaired; unused ones will be sold to other unit member for higher efficiency Step 4: Checking up management staff and labour force of each subsidiary, organizing examinations, re-evaluate the skill level in accordance to management position and skilled level and then reassigned to suitable position at subsidiaries complying with expectation and work capacity of the staff Leading position will be priority reappointed first, new leaders will set up personality however it is necessary to select staff in accordance with general standard criteria of PVNC Step 5: Allowing management staff, long service employees and skilled staff to buy preferred shares so that they will cooperate closely with the company 3.3.2 Management strategy complying with Cooperation model PVNC will become holding company, and pool capital with rate of controlling is over 50% to subsidiaries With the role of controlling company, 62 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 PVNC will perform or support of implementing general management work for the subsidiaries so that they will have shakedown and mainly focus on business activities Per personnel matter, PVNC will appoint people to positions as Chairman of the Board, Board of Directors, Chief Accountant Per the organization matter, PVNC will develop charters, establishing general activity process for all subsidiaries and install information management systems (human resource software, accounting software, project management software) These are resources, capabilities of the Corporation which will be shared by subsidiaries and vice versa, the subsidiaries will also contribute ideas, person to strengthen these sources and capabilities continuously Furthermore, PVNC is also responsible for setting and developing culture of the company Company culture is both glue connecting unit members and character to distinguish PVNC with other construction companies The controlling company also acts as key point to develop brand, supporting subsidiaries in developing relationships with partners in business In terms of business, PVNC will establish an investment board which will assess and review investment projects of subsidiaries Only projects which meet general standard, approved by the Client are allocated money by the controlling company for carry out Therefore, there will have capital competition among subsidiaries of PVNC After approving, PVNC will arrange capital for project via investment fund or stand surety for loans The controlling company will disburse loan directly for each project, will not disburse for subsidiary in order to avoid the capital is used for improper purposes Subsidiary completely independent, carry out according to approved plan actively and prepare progress report monthly The subsidiaries will only submit added items which are not included in the schedule Thus, subsidiaries will have to bid projects of the controlling company or competing for fund from the controlling company for itself At each subsidiary, group management mechanism will be established From a large project will be divided into smaller sub-projects and then allocated to the captain Captain would choose personnel who are professional to adopt to 63 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 implement sub-projects Subsidiaries only hire main staff from team and pay, the foreman has to manage for input items and other general workers The allotment is completely transparent, complying with general criteria, there are separate department for acceptance and inspected suddenly by the controlling company The team will manage personnel, cost and progress but will be supported in technology and engineering by the company When the team needs to use machinery and equipment of the company or controlling company it must be contracted like renting from other company which does not belong to the controlling company Thus, the team will have to bid competitively for the job; the foreman must compete to attract qualified staff that has education and experience With hard, urgent case, the subsidiaries will ask the controlling company to support by setting up specialist teams Expert team is a collection of the best experts from various fields in the company of a controlling company to overcome difficulties together PVNC will hold the annual competition selection of experts, each picks out two experts who achieve the most experience and the highest level in the system annually Monthly, experts will get expert allowance but must attend expert team and training for staff regularly in the Corporation Management mechanism both competes and also cooperate openly in accordance with standard system, includes bonus and penalty policies which assist teams, subsidiaries to eliminate continuously, accelerating learning process, gaining experience and improving the standards of each particular company and the parent company in general This policy will make PVNC to become a continuous learning organization When subsidiaries become strong ones, PVNC will support to take stock of these companies to post on the stock market 3.3.3 Strategy of innovation management policy Based on competitive contracting, PVNC and its subsidiaries will implement management basing on final results PVNC and subsidiary companies will jointly develop procedures; ensure compliance with processes to achieve the desired results Expected result is expressed through the mainly activity criteria KPI (Key 64 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 Performance Indicator) Each subsidiary, each department, each team will build their own KPI then present with the superior Yearly the company re-calculates the average KPI for same level units, thereby proposing bonus policies basing on percentage of completed ratio KPI Foremen will be a pioneering leader in PVNC system After gathering all necessary conditions, the foremen can split up to establish other subsidiary or promoted in current companies in PVNC system The new company might be in new filed or in new market By training, challenging and using at important position for foremen, PVNC can both develop internal leaders and “develop branch” very quickly and efficiently 3.3.4 Marketing Strategy PVNC needs to invest intensively in order to create its own characters for the works which are completed or construction sites of the cooperation The character can created by unique design philosophy (luxurious but friendly to environment, comfortable to use, more investment for the surrounding community) or management style (make sure the contract completion date will be met, methodical management, labor safety, does not affect surrounding communities during the construction, saving ceremony cost and completion cost in order to build public works for community, completed projects will be managed professionally) PVNC should focus on building a professional team of project staff, staff of real estate business, staff of buildings management service because these are ambassadors showing image of the cooperation 3.3.5 Human resource development strategy To serve the long-term stable development of the corporate, PVNC needs to have strategies to attract key talent and talent usage culture Annually, the company should hold a meeting to honor Central Region students who graduate excellently from universities over the country The company holds contests publicity and transparency of all positions New employees will learn about tradition, culture of the company, and visit the units, typical works Comprehensive remuneration is applied for all staff accompanying with position and job performance Company 65 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 organizes testing competition and gets confidence for management positions Staff, senior staff have chance to participate in training courses inside and outside the enterprise Children of long-term staff will be allocated college scholarships and recruiting priority after graduation PVNC build traditional house to honor employee generations of the company, introduce images of key works 3.3.6 Science and Technology Development Strategy With vision to become a leading construction cooperation in the region, PVNC needs to consider science and technology is key point to develop acceleratedly and strengthen competitiveness capacity Companies should focus on core technology of oil and gas construction and buildings Every year the company needs to set research plan, transfer and receipt of the localization of special equipment The company must commit always leading in occupying modern construction technology and most effective 3.4 Implementation solutions 3.4.1 Service and Product Solution At the present, construction value accounts for more than 85% of output value, PVNC Corporation will maintain and grow yearly value in the field of construction at about 15-30%, but the total construction value till 2015 will account for approximately 40% of total production, mainly in construction projects and major infrastructure and installing other industrial projects Industrial production value is not high, accounts for about 8% of total output value, firstly, investment to increase capacity of existing quarries and adobe brick factories ACC to serve works which are being invested and constructed by PVNC in the meanwhile pushing ahead of producing and consuming concrete and precast concrete products to serve construction over Nghe An Province and in Central Region Large-scale mechanical mill should be established to produce products for projects which are being implemented by Corporation To raise the industrial production value, now corporation is implementing investing to port and depot projects for Kobe Steel factory (Total amount over 3700 billion), platform manufactory, investing to other industrial projects (Dong Hoi Industrial Zone 66 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 1.480ha Islam), cooperating with domestic and foreign partners to build power plants (estimated capacity of 1200 MW) , hydroelectric plant is 260 MW scale and increasing the output value of industrial production to 2015 is about 30-40% of output value The civil construction value from projects and other works invested by the Corporation accounts for approximately 15% of the total and increases in subsequent years The value of business services accounts for about 14% of the business turnover The value of investment real estate business increase gradually to approximately 36% in 2015 Thus the proportion of real estate business investment, industrial production and exploitation of materials; services will be improved in later years, while construction value ratio will gradually decrease 3.4.2 Human resource and framework of organization development solution Reviewing associated companies that the Corporation has capital stock from the owner capital to make strategic investments into better quality more in accordance with direction that each field has only one subsidiary, removing case of subsidiaries and associated companies compete each other in the Corporation Establishing internal relationship within the Corporation is the legal relationship between equality before the law, and economic relationship on the basis of investment - investment acceptance - remittance of profits, the controlling company rules subsidiaries of branch, development strategy, investing capital through appointment and dismissal of the representatives of capital Service supplying service between the controlling company and subsidiaries, the subsidiaries together bases on economic contracts Completing the model of the Corporation and strengthen the management, oversight of the parent company over the operations of the member companies and enter into the association according to the feature with each operation area such as erection, real estate investment, the exploitation of raw material and services transaction 67 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 Developing the optimum managerial model oriented towards the decentralization of the large scope projects whose resources must be mobilized from the entire PVNC Corporation Adopt the radical decentralized system so that the affiliated companies can manage the small and medium projects with short period of implementation Improving the model and organizational structure of the corporation on the frequent basis, immediately rearrange them in such flexible way to in accord with the business and production status over each development stage Strengthening and developing the businesses to help them become the affricated companies, which are strong and qualified enough to undertake the projects according to the assignment of the corporation and the group Open the overseas representative branches when it has enough conditions Establish more management units and operate the electric plant, manage and the housing and office business and house rental services by 2015 So, the extent and operation of the Corporation will be upgraded from 18 to 25 member companies Improving the design and supervision capability of the corporation to carry out the design consulting services and supervision of the specialized works Beforehand, it will follow the EPC general bidding for the small and medium projects to step by step carry out the large scope project in BT, BO and BOT forms Implementing association, joint venture with strong, reliable partners in domestic and oversea to participate in bidding major projects of the state After achieving enough conditions, the company will have plans to extend civil construction market to oversea complying with orientation of OVC Corporation and the Group Continuing to recruit work force who were trained applying examination mechanism, selected, hiring foreign experts for some necessary positions such as consultant expert, project manager Increasing yearly income of all staff in the Corporation in order to encourage them to cooperate long-term with the Corporation, it is also necessary to build up policies which are suitable to staff, workers who express skilled capacity during 68 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 performance In the meanwhile it must be have training schedule and flexible mechanism which will be motivation for striving to become key officers of PVNC Corporation in the future Considering training tasks as annual plans, from training foreign language, short - term class to assigning to learn oversea It is proposed to increase number of staff who would be sent oversea for training from training fund of PVNC Corporation regarding from related branch to product, business of the Corporation Continuing to reform, strengthen and consolidate management apparatus and unit member under compact and insensitive direction in order to have good leader, engineer and experts to operate production and business of the Corporation PVNC effectively Establishing internal economic lever policies step by step in accordance with current laws, firstly is income policy for staff to encourage employees in order to exploit best knowledge and contribution of members in process of producing and trading Attracting high level labour force who has experience, skills in the field and excellent students who has just graduated from domestic and oversea universities 3.4.3 Solution for the investment in the capital construction and improvement of the machine and equipment operation In order to ensure the objectives to develop into the Corporation, the investment in the machine and equipment and the improvement of their performance are being promoted towards the marketing plan and the professional restructure of the corporation The equipment and component that will be invested for infrastructure development include the construction equipment, the foundation treatment, the equipment used for superstructure execution, the execution chain for bridge and road works For the equipment used for the foundation execution, our corporation has invested in mobilizing the 420 ton hydraulic compressor, and the time ahead, will invest in extra bored pile drill and the equipment for the holding wall so that we can manage the foundation and the base more actively The equipment and machines for superstructure execution have been equipped relatively adequately 69 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 They comprise about 20,000 square meters of the completed scaffolding, 7,000 square meters of the combined scaffoldings, 10,000 square meters of the shaped steel formwork, tower cranes, operators, with the synchronous equipments To accelerate the work schedule for the superstructure, the corporation will invest in the extra technology for sliding and light formwork etc… PVNC has already provided the construction chain for the plan and the Bridge/road works with the vehicles, the equipment and the machine for execution, which can be guaranteed for the major works For the investment in the waterway, the road way transporting equipment that will be used for the material, product transportation of the plant within and outside the scope of PVNC, it will invest more in the big load vessel and the types of the trucks, which are in accordance with the plant’s use purposes For the workshop investment: In order to the improve the capability of fabrication and the assembling of the steel components, PVNC corporation will plan to invest in building the metal sheet, column, purling, scaffolding, formwork, substandard steel structures manufacturing chain and the workshops for repairing and maintenance services within and outside the industry with the total investment of about 110 billion VND For the construction material manufacturing process: our corporation has invested in the building the complete commercial concrete manufacturing chain installed in Nghe An and Ha Tinh Provinces, including the mixing plant, the mixing trucks, the concrete pumping cars, etc The stone manufacturing chain of all types has the function of serving the civil building and bridge/road works execution In future, our corporation will invest in the non-burning brick chain (operated by the AAC gas) with the total investment of about 81 billion VND 3.4.4 Solutions for the technological science The application of the informatics information will be the foundation of technology for the electronic personnel management system and the correspondence management system 70 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 The technologies for highly efficient project and production management will be applied The advanced technologies of the region and the world will be updated in the area of the construction of the works in the petroleum industry and the civil works We will continue to cooperate with the advanced countries in the world to adopt and transfer the technologies for the petroleum building sector It has become a precondition to take advantage and strengthen the international cooperation with the joint-venture partners such as Japan, France, Swiss etc… and the companies affiliated with the Petroleum Group to exchange the experience, to adopt and to step by step master, improve, and move forwards to the technological creation in the area All business, manufacturing operations will have to be maintained to comply with the policies and HSEQ processes (health, safety, environment and quality) The tools for quality control and the overall solutions will have to be developed to improve the working efficiency We will step by step make use of the PVNC trademarks management software and apply the management software in the areas such as: progress management, the schedule management and financial management etc… 3.4.5 Solution for mobilization and effective use of capital Apart from the existing own capital sources, the loan from the petroleum group and the commercial bank system, our company will pay attention to the solution for mobilization of the capital sources on the stock exchange market and from the managerial staffs and staffs All funds will be decentralized at our headquarter under the loan agreements, those affiliated companies, which have the loan demand will have to apply for this The difference between the loan and offered loan is not huge so that our affiliated companies can use the fund effectively while they still have the condition to transfer the capital from those excessive outlets, or insufficient departments to the more effective projects 3.5 Itinerary plan to execute the selected strategies Based on the current market situation and capability of PVNC, we propose the execution plan for selected strategies as follows : 71 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 Table 3.9 The execution plan for selected strategies No Jobs to be done Increase charter capital from 100 billions to 600 billions Increase charter capital from 600 billions to 1.200 billions Increase charter capital from 1.200 billion to 2.000 billion Restructuring plan Develop and apply new management system for mother corporation model Develop and apply management system for each strategic business units Develop human resource 2011 2012 2013 2014 2015 Invest in IT and equipment End of 2010 To implement the strategies successfully, PVNC should organize meetings with directors, mangers, and senior staff to make them fully aware of new vision, new mission and the selected strategies then they can inform lower staff Every employee should understand the importance of the change, enthusiastically involve in the process and help them to gain some initial success to build up trust and confidence 72 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 CONCLUSION  In the market economy today, business strategy plays a very important role in business activities of the enterprise as well as affecting to its existence and development It is the same to Nghe An Petroleum Construction Joint Stock Company, business strategy has been top priority of the Board of Leaders because this affects to survival, prosperity or decline of the company  Nowadays, with sweeping development of science and technology, explosion of information along with other factors impact significantly on enterprises therefore it is very necessary to plan right business strategy Nghe An Petroleum Construction Joint Stock Company participates in construction field so risk level is high, a perfect business strategy will assist the company to have ability to cope with any situation in business  In the process of completing project, investment time and experience of our group is limited therefore there are inevitable shortcomings We would appreciate comments from board of examiners to apply the project in practice effectively  The Group would like to give deep thanks to Board of Leaders, and staff of Nghe An Petroleum Construction Joint Stock Company, professionals who assist us during process of preparing this report 73 /74 GROUP Strategy Management CLASS: GAMBA 01.V02 REFERENCES Associate professor PhD Le The Gioi, PhD Nguyen Thanh Liem, M.A Tran Huu Hai (2009), Strategy Management, Statistic Publishing House Associate professor PhD Ngo Kim Thanh, Associate professor Le Van Tam (2009), Strategic Management, National Economic University Publishing House Associate Professor, PhD Nguyen Thi Lien Diep M.A Pham Van Nam (2006) Business Policies and Strategies, Society - Laboring Publishing House, Ho Chi Minh City Nguyen Tan Phuoc (1996), Business policies and strategies, Statistic Publishing House Nguyen Huu Lam (2009), Competitiveness position development strategy management, Statistic Publishing House Le Van Tam (2000) Strategy Management Syllabus, Statistic Publishing House Phan Thi Ngoc Thuan (2005), Business Strategy and internal plan of the enterprise, Science and Technology Publishing House ROWAN GIBSON edit (2006) Rethinking of Future, Youth Publishing House, Sai Gon Economic Times Alex Miller (1998), Strategic management 3rd Ed Irwin/Mcgraw-Hill 10 Thomas L Wheelen, J.David Hnger (2004), Strantegic management and business policy 9th Prentice Hall 11 Business Activities report of Nghe An Petroleum Consutruction Joint Stock Company for period from 2007 to 2009 12 Resolution of Vietnam Petroleum Construction Joint Stock Corporation to approve business strategy of Nghe An Petroleum Construction Joint Stock Company for period from 2010 to 2015 13 Project of Establishing Nghe An Petroleum Construction Corporation 14 www.business.gov.vn 74 /74 ... BUSINESS PERFORMANCE AND ENVIRONMENT 2.1 Introduction to Petro Vietnam Nghe An Construction Joint Stock Company 2.1.1 The Formation and Development of PVNC Petrovietnam Nghe An Construction Joint- stock. .. data was collected from various sources such as Petrovietnam Nghe An Construction Joint- stock Company (PVNC), Petrovietnam Construction Jointstock Corporation, Petrovietnam Oil and Gas Group (PVN),... research is a joint stock company Petro Vietnam Nghe An Construction Joint- stock Company, which is part of Petro Vietnam Construction Jointstock Corporation (PVC), whose business activities cover