improving competitive ability in construction bidding in thanh nam construction and investment join stock comapny

NATIONAL ECONOMICS UNIVERSITY
English for Business Department
Faculty of English for Economics
LÊ TH Ị CÚC-CQ 483936
IMPROVING COMPETITIVE ABILITY IN
CONSTRUCTION BIDDING
IN THANH NAM CONSTRUCTION AND
INVESTMENT
JOIN STOCK COMAPNY
Hanoi, May, 2010
i
NATIONAL ECONOMICS UNIVERSITY
English for Business Department
Faculty of English for Economics
LÊ THỊ CÚC-CQ 483936
IMPROVING COMPETITIVE ABILITY IN
CONSTRUCTION BIDDING
IN THANH NAM CONSTRUCTION AND
INVESTMENT
JOIN STOCK COMPANY
Field: English for Business Studies
Code: 701
Supervisor: Principal Lecturer, M.A, Ms. HÀ THỊ KIM ANH
Hanoi, May, 2010
ii
ACKNOWLEDGEMENT
I would like to specially thank my supervisor, my teacher-Ms. Ha Thi Kim
Anh, who has supported me with guidance and encouragement, without your
instructions I will never accomplish this report.
I would like to thank my family; they always are beside me to help me
complete this report.

I also would like to thank Mr. Hoang Duy Khanh-The Deputy chief of
project management department of Thanh Nam construction and Investment
Company, who fully supplied me with the information in this report.
I would like to thank English for Business Department-Faculty of English
for Economics.
Implementation this report is one of the ways to help us-future businessman
(businesswoman) to apply theory into practice. However, in fact, there are many
things that are beyond my understanding, so I look forward to receiving sympathy
from the readers. I also would like to thank for your attention.
iii
Table of contents
Acknowledgement i
Table of contents………………………………………………………………… ii
Executive summary……………………………………………………………….vi
Introduction…………………………………………………………………… vii
Chapter1 introduction…… 1
1. Introduction to Thanh Nam construction and investment joint stock
company…………………………………………………………………………….1
2. The problem………………………………………………………………… 2
3. Research question, purpose, scope of work, methodology and some basic
concepts………………………………………………………………… ……… 3
3.1Research question………………………………………….…………………….3
3.2 Purpose …………………………………………………………………………3
3.3 Scope of work………………………………………………………………… 3
3.4 Methodology……………………………………………………………………3
3.5 Some basic concepts…………………………………………………………….4
Chapter2 theoretical framework……………………………………………… 6
1. Competition conception in construction bidding……………………………… 6
2. Modes of competition in construction bidding………………………………… 8
Chapter 3 analysis and findings…………………………………………………11

I. Analysis………………………… ………………………………………… 11
1. Financial resources…………………………………………………………… 11
2. Technical ability……………………………………………………………… 12
3. Management capability……………………………………………………… 13
4. Reputations…………………………………………………………………… 14
II. Findings………………………………… ……………………………….… 17
1. Advantages…………………………………………………………………… 17
iv
1.1 Financial resources…………………………… ………………………… 17
1.2 Technical ability……………………………………………………………….17
1.3 Management ability………………………………………………………… 18
1.4 Reputations………………………………………………………………… 18
2. Disadvantages
2.1 Financial resources…………………………… ………………………… 18
2.2 Technical ability…………………………………………………………… 18
2.3 Management ability……………………………………………………………19
2.4 Reputations…………………………………………………………………….19
Chapter 4 recommendations……………………………….………………… 21
1. Recommendation number 1…………………………………………………… 21
2. Recommendation number 2…………………………………………………… 22
3. Recommendation number 3…………………………………………………… 24
4. Recommendation number 4…………………………………………………… 27
5. Recommendation number 5…………………………………………………… 28
6. Recommendation number 6…………………………………………………… 29
Conclusion…………………… …………………………………………… viii
References……………………………………………………… …………… ix

v
EXECUTIVE SUMMARY
Competition is now harder than ever everywhere, especially in construction

bidding. Thanh Nam Construction and Investment Join stock Company is not out of
this cycle. However, in some recent bids, they lost many important contracts into
the rivals’ hands. This report aims at analyzing their advantages and disadvantages
in construction bidding to find out the reasons why they did not win those
contracts. From what has been found, I will try to give some recommendations to
this situation of Thanh Nam. These recommendations concentrate on improving
financial strength, staff qualification, technology, bidding documents…
The objectives of this report are as follows:
Chapter 1: Introduction to Thanh Nam Construction and Investment Join
Stock Company, the problem, the purpose, the scope of work, methodology, and
some basic concepts in this report.
Chapter 2: Reviewing competition theory and criteria used for contractors
pre-qualification and bid evaluation as stated in the literature.
Chapter 3: Analyzing all the facts in Thanh Nam basing on these criteria,
after that I will identify what are the company’s advantages, what are the
disadvantages?
Chapter 4: Basing on what I have found, I will give some helpful
recommendations for Thanh Nam’s situation.
INTRODUCTION
The research topic of this report is improving competitive ability in
construction bidding in Thanh Nam construction and investment join stock
vi
company. This topic was implemented based on the theory of competition and the
main criteria for choosing a building contractor in construction bidding. All the
data in this report are provided by the project management department. The reseach
question is “how to improve competitive ability in construction biding in Thanh
Nam Construction and Investment Join Stock Company”.
The research methods selected for this study are qualitative and quantitative
approach from both primary data and secondary data.
vii

CHAPTER 1
INTRODUCTION
1. Introduction to Thanh Nam Construction and Investment Joint Stock
Company
THANH NAM COMPANY
CC5A - Linh Dam - Hoang Liet - Hoang Mai Dist - Ha Noi
Phone: 04.5632763/5632764 Fax: 04.5632762
Email: Website: www.cotanagroup.vn
Thanh Nam Construction and Investment Joint Stock Company (COTANA.,
JSC) is operating in according Joint stock company model. COTANA.,JSC’s
framework of organization include Board of Director, Control Commitee, Board of
Managers, 10 departments, 10 enterprises, 2 manufacturing workshops and Ho Chi
Minh City Branch.
Thanh Nam Construction and Investment Joint Stock Company (COTANA.,
JSC) was founded in 1993. After many years of development, Thanh Nam becomes
a strong economic group in construction field. Due to the demand of developing
process, Thanh Nam has established member companies which specialize in
investment advice, infrastructure building, building and assembling civil and
industrial projects, investing in real estate, engineering construction, manufacturing
construction material, interior designing At present, Thanh Nam owns 1 branch in
Ho Chi Minh City and 14 subsidiaries. The company has the staff of more than 300
construction engineers with experience and qualification in working (constructing
and doing business), and a contigent of skillful blue collar workers who are the big
potential for the developing process of the company.
COTANAGROUP has now become a well-known contractor in the
Vietnamese market and has been trusted by many investors. The company has
constructed many works, some typical ones of which are: Hoa Binh Hotel in Ly
Thuong Kiet street, the system of restaurants, hotels, and services of Kim Lien
Tourism Company, Russian Culture Centre, Ruby plaza building, Viglacera
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building at no. 671 Hoang Hoa Tham street COTANAGROUP also constructed
some department buildings in new urban areas in Hanoi City like Dinh Cong, Linh
Dam, My Dinh, Viet Hung, Phap Van, Trung Hoa- Nhan Chinh, Dai Kim, and Van
Canh. In addition, the company has works along the country like: Ho Chi Minh
City, Hai Phong city, Quang Ninh, Bac Ninh, Hà Nam, Vũng Tàu, Kiên Giang…
COTANAGROUP is not only a prestigious contractor but also is an
investment and manufacture company with TSG safety glass and plastic window.
Especially, the establishment BMS Thanh Nam Joint Venture Company - joint
venturing with Korea to manufacture construction steel structure and couple
jointing system used in concrete structure- has affirmed the ceaseless development
of the company.
In real estate trading and investing field, COTANAGROUP is one of the
stock founders of VIHAJICO- the investor of ECOPARK city which spreads over
an area of 500 ha. Cooperating with big construction partners to operate in
investment field such as with HUD to found Hudland, the company has invested in
constructing high-ranking multistory tenement building and villas in Viet Hung,
Van Canh, Bac Ninh new urban area…
2. The problem
In some recent bids, the company has lost some important contracts with
great value. The more serious problem is their main competitors, Song Hong
Construction JSC (INCOMEX) and Song Da Infrastructure Construction Joint
Stock Company, obtained these contracts. The losing contracts are Thanh Xuan
Trade and Services Centre, Xuan La trade centre-super market-office for rent, Ninh
Binh Hospital, Mai Chau-Hoa Binh Treasury, Vietnam Trade-union Tourist base.
The total value of these contracts is about 51.962 billion VN Dong.
3. Research question, purpose, scope of work, methodology and some
key term definitions
3.1 Research question
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The only research question of this report is how to improve competitive

ability in construction bidding in Thanh Nam Construction and Investment Join
Stock Company.
3.2 Purpose
The purpose of this report is to show all the facts in competitive ability of
the company basing on the criteria basing on which to choose the winning
contractor like: financial resources, technical ability, management capacity,
reputation. Analyzing them basing on the fact of Thanh Nam to find out what are
their advantages, what are their disadvantages. From my findings, I will give out
some helpful recommendations.
3.3 Scope of work
The company has many workshops and member companies, while this
report has some limitation in size so the object in this report only is the mother
company: Thanh Nam Construction and Investment Joint Stock Company, and the
kind of bid I am studying here is only building and assembling bid in construction.
3.4 Methodology
The research methods selected for this study are qualitative and quantitative
approaching from both primary data and secondary data. Primary data are facts and
figures that are directly get from the department of project management. Secondary
data are collected from books, decree; statute…The data collected was then
statistically analyzed in pursuit of an answer to the research question: how to
improve competitive ability in Thanh Nam Construction and Investment Joint
Stock Company.
3.5 Some key term definitions
There are some concepts that are useful in my report:
x
Term 3, chapter 1 in bidding regulations promulgated with the decree
number 88/1999/ND-CP of the government has defined some terminologies:
- Bidding: is process of choosing the investor who can satisfy
requirements of tender inviter.
- Bidding consideration: is the process in which the tender

inviter considers, analyzes and evaluates tender documents to choose the
investor who wins the contract.
- Construction bidding concept: Construction bidding (building
and assembling bidding) is a method to select investor who has the best ability in
carrying out work related to building and assembling equipment process of project
or work…to satisfy owner of the project.
Basic contents of construction bidding
- Contractors (who want to win the contract) point out their own
request and inform investors.
- Basing on demands of investors, contractors will present their
capacity; give out solution in executing the work.
- The investors will consider contractors’ ability and their
solution to choose the most suitable contractor.
- Contractors are economic organizations who have legal
personality to take part in bidding.
- Construction bidding forms
Similar to other bidding types, construction bidding is held into two
main forms (prescribed at point 4-construction statute).
+ Extensive bidding: this is the bidding form which does not limit the
number of investor who wants to take tender. Its advantage is publicity and
fair competition so this is the main form is applied in construction bidding.
+ Restriction bidding: this is the bidding form in which the tender
inviter only invites some investor (maximum is 5) to take part in bidding. The list
of the investors must be approved by authorities
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CHAPTER 2
THEORETICAL FRAMEWORK
1. Competition conception in construction bidding
Competition is a fundamental characteristic of market mechanism,
however there are many way to define it.

“Competition is a constitutive property of a market economy
following immediately from the right of each individual to pursue his or her
own interest” (The International Handbook of Competition, Edward Elgar,
2004:1).
Competition (in business) is rival action among manufacturers,
businessman in market economy, which is affected by supply and demand
relationship to obtain the best production condition, and the best market
(Encyclopedia-part 1, 1995:357)
“Competition is the chief selective process in moderneconomic
society, and through it we have the survival of the fit”. (The International
Handbook of Competition, Edward Elgar, 2004:20)
Competition in economics is a term that encompasses the notion of
individuals and firms striving for a greater share of a market to sell or buy
goods and services (Wikipedia, the free encyclopedia).
A market condition in which individual buyers and sellers have no
power to affect the market price of a good or service is called perfect
competition market (www.yourdictionary.com).
There are maybe many ways to express competition concept,
however we can see that these definitions have some points in common:
- There are many kinds of subjects who together take part in
competition (construction firm is one of these kinds).
- The direct target of competition is a specific object which
firms want to obtain (an opportunity, a work, a project or a potential market,
customers…). The last purpose is for high profit.
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- Competition happens in a concrete environment which has
common ties that competitors have to comply with: product features, market,
legal conditions, business routine…
- In competition process, firms may use many different ways:
competition by product features and quality, competition by price (low price

setting policy, high price setting policy, dumping policy…); competition by
services, competition by paying forms…
In construction market, there always exist three competition
relationships: investors versus contractors, contractor versus contractors and
contractors versus suppliers.
The hardest race is competition among contractors by means of
bidding held by investors. This is a special race among constructional firms.
Constructional firm which wants to win must have the best ability,
advantages to satisfy requirements of the investors.
Competition among constructional firms in bidding may be
understood by two meanings:
- Literal meaning: competition among constructional firms in
bidding is the process, in which the firms give out solutions in technique,
finance, equipments, human resources, progress of the project to fully meet
with investors’ requirements.
This concept only exposes conditions, competitive ability of firm in a
specific work, or project, it does not point out competition process of firm in
manufacturing and doing business.
- Expanding meaning: competition among constructional firms
in bidding is the process which is begun by searching for information, hiving
out bidding solutions, signing, performing contract until completing the
project, handing over to use and warranting work to satisfy investors’
demands.

2. Modes of competition in construction bidding
Pre-qualification and bid evaluation procedures involve different types of
criterion to evaluate the overall suitability of contractors such as: General,
xiii
technical, managerial, and financial criteria (Hunt et al., 1966); Financial
stability, managerial capability and organizational strength, technical expertise

and experience of comparable construction (Merna and Smith, 1990);
Relevance of experience, size of firm, and safety record (Moselhi and
Martinelli, 1990). Hatush and Skitmore (1997a) have identified five main
criteria for contractor prequalification and bid evaluation along with the
information necessary to assess these criteria as shown in following table:
Financial
soundness
Financial stability
Credit rating
Banking arrangements and
bonding
Financial status
Technical
ability
Experience
Plant and equipment
Personnel
Ability
Management
capability
Past performance and quality
Project management
organization
Experience of technical
personnel
Management knowledge
Health and
safety
Safety
Experience modification

rating
Management safety
accountability
Reputation Past failures
Length of time in business
Past owner/contractor
relationship
Other relationships
xiv
(Criteria for contractors’ selection and bid evaluation, Salama, Abd El
Aziz, El Sawah and El Samadony, 2006:1)
In 2006 bidding report, Thanh Nam summarized that there were three main
competitive modes in Vietnam construction market:
• Mode 1 : Competition by quality of works
Quality of works is the general of targets, economic and technical
specifics to fully meet with investors’ requirements such as usage, using
time, safety level, effect…
Competition by quality of works is a useful tool in construction
bidding. This is an unlimited competition. Therefore, improving quality and
innovating products are vital.
Firms must have good human resources, modern equipments, and
strong financial resources to apply this competition mode.
• Mode 2 : Competition by tender price
In rivalry, tender price is the key factor which decides whether firm
wins the contract or not. A reasonable tender price not only makes profit for
firm, but it also help investors save capital.
Tender price list concerns many factors such as level of management,
technical staff, making bidding document staff…At the same time, it shows
qualities of firm as:
- Organizational skill, managing level

- Construction engineering, ability of applying modern
technique
- Business quality
There must be a flexible price policy basing on: the real ability of
firm, bidding target, size, features and place of project…to make bid price
has competitive advantages.
Normally, contractors usually base on estimated price to conduct bid
price. Bid price is divided into different levels which relate to targets of
profit, jobs or penetrating new market.
In short, a firm want to build a reasonable bid price list must base on
function of works, human resources, financial resources, equipment…
xv
• Mode 3: Competition by progress chart
Progress chart is showed in general arrangement of firm in
constructional work, is the promise of quality, safety, and construction time.
At the same time, it also is a “window” through which the owner can learn
about organizational skill, construction engineering and equipment quality
of the contractor.
These are three main modes that contractors use in construction
bidding. These methods can be used independently or together, depending
on each situation, the importance and economic significance of each project.
xvi
CHAPTER 3
ANALYSIS AND FINDINGS
I. ANALYSIS
1. Financial resources
In construction bidding, raising capital ability is critical. A company with a
giant amount of fixed assets but weak raising capital ability will never win any
contract.
The ability to mobilize capital of the company is rather good. At the same

time, the company can raise capital from both affiliated companies and banks.
Particularly, the company has a close relationship with prestigious banks as
Viettinbank, Agribank, Vietcombank… they are ready to support the company with
capital. At present, the total current assets of the company is about 21 000 billion
VN Dong. In 12/1/2009 periodic report on business finance, the total amount of
capital as follows:
Name Unit 2007 2008 2009 Gaining
percentage
(07/08)
Gaining
percentage
(08/09)
Total
business
capital
Billion
VN
Dong
16180.2 18113.4 20134.8 10.68 10.03
Fixed
capital
Billion
VN
Dong
7650.7 8240.3 10101.5 7.15 4.56
Current
capital
Billion
VN
Dong

8529.5 9873.1 10033.3 15.75 1.59
(Source: The Project Management Department)
xvii
Looking at the table, it can see that the total amount of business capital has
risen in recent years. In 2008, it increased 10.68% compared to 2007. In
comparison with 2008, this growth rate was 10.3%. The fixed and current capital
increased over the years. This is a very outstanding achievement that not every
construction company can achieve, especially for young company like Thanh Nam.
2. Technical ability
In construction, machine is very important. It is production facility, it also
affects to productivity raising and the quality of works. If devices are out of date,
the execution of works can meet many difficulties, the quality of works decreases,
work progress may not meet the deadline, even worse, it may be not safe for the
workers.
Being a construction firm, the company has specialized devices such as:
transporter trucks, lifters, excavators, bulldozers, moderators…Particularly, in
recent years, the company pays great attention to buy modern devices to serve
building and assembling process. This is an effort step to satisfy requirements of
big projects.
THE DEVICE STRUCTURE CHART
(Source: The Project Management Department, unit: million VN Dong)
Numb
er
Name
Quantit
y
Country Quarter
I II III I
V
1 Vehicle

s
5 Japan Mainten
ance
mainten
ance
6000
2 Lifter 2 Japan Overha
ul
1200
0
3 Transfe
r line
1 Russia Mediu
m
mainten
ance
Mediu
m
mainten
ance
600
4 Navvy 2 Korea Overha
ul
7000
5 Bulldoz 2 Japan Overha 5200
xviii
er ul
6 Modera
tor
5 Vietna

m
250
In addition to up-to-date equipment, the company has experiential technical
staff that is carefully trained and can design high value works.
The technology which the company is applying is by-hand in combination
with mechanism. Devices are regularly corrective maintenance.
Manufacturing technology directly influences on competitive ability of the
company. However, anything has 2 aspects: the good and the not good. Modern
technique may help the company to gain competitive ability, shorten building time
as well as increase the quality of works. It also creates more business opportunities.
On the other hand, modern technology may increase rate of intangible depreciation,
choosing and buying the alternative technology are not simple to any firm.
3. Management capability
A rational organizational structure will help businesses achieve high
efficiency in business operations. This one creates flexibility in handling external
environment changes as well as within businesses, promotes strengths and limits
difficulties in business activities.
A good structure also creates a rekindling atmosphere among staff,
strengthens close relationship of leaders and employees. This is the factor which
directly raises competitive ability of enterprise in bidding.
At present, Thanh Nam Corporation has a young manager team who are rich
in enthusiasm and energy. The Project Management Department is the key
department in construction biding, so this department is invested with young and
high capacity managers.
The company has developed mechanisms to decentralize construction
engineering management, ensured safety for workers in each enterprise. At the
same time, the company also promotes self-production management in each
enterprise.
xix
4. Reputations

So far, it can confirm that Thanh Nam has built a good reputation in
construction industry. This is demonstrated by a series of projects that the company
won. Among them, there were many works of which the company got gold medals
for quality. The company also was honor with the title of Hanoi Typical Business
award and another 28 merit lists of the Ministry of Construction. In following list,
there are works that the company won and was appreciated in recent three years:
The names of wining contract in three years 2007-2008-2009
(Source: The Project Management Department, unit: billion VN Dong)
Number Name of works Place Value
1 Thanh Nam construction and investment join
stock company head office
Hanoi 1500
2 Main lobby of Kim Lien Hotel Hanoi 30
3 Main lobby and French restaurant of Hoa Binh
Hotel
Hanoi 52.7
4 Tenement house No.3 Linh Dam Peninsula Hanoi 1100
5 CT-DN1 6 Dinh Cong New Urban Area Hanoi 983
6 CT 5-DN2, My Dinh new urban area II Hanoi 897.7
7 X2 Linh Dam new urban zone Hanoi 12347.4
8 Diana manufactory Hanoi 1231
9 Russian Culture House - 501 Kim Ma Hanoi 12
10 Minh Tri garment factory Hanoi 425
11 Broadcasting and televising college Ha Nam 922
12 Televising training center officer Vung Tau 46
13 Quoc Oai carpentry and mechanical workshop Hanoi 147
Besides financial resources, technical ability, management capacity,
reputations there are other factors which can affect to Thanh Nam competitive
ability. They are:
xx

* Governmental statutes and policies
The laws and policies of the state is a critical factor in establishing the
environment for business activities, they may promote or restrict the competition
among enterprises.
In facts, there are still some significant differences between the regulations
and the practices in construction bidding, such as:
- The current laws do not indicate solutions in case settlement prices are
much higher than tender price. In the reality this is a common problem. The price
adjustment is completely agreement between investors and contractors. Contractors
will suffer a loss if investors do not agree to new measures to adjust prices. In 10
projects were carried out by a construction corporation, settlement prices rose
85.5% in average. Among them, 29.4% was the lowest and 152.5% was the highest
(Mr. Duong Van Can-General Secretary of Vietnam Building Contractor
Assembly, construction information market)
- Two forms of bidding are assignment bidding and restriction
bidding is still used commonly in many localities (Mr. Nguyen Viet Hung-
the Chief of the National Passing Judgment on Bidding Secretariat,
construction information market). In specific, there was 2/3 in 600 contracts
were assignment bidding in a 91 corporation. The popularity of the 2 kinds
of bidding limits competition and effects of tender.
- The ask-give phenomenon still exists in this market economy.
For example, parent companies obtain contracts, after that they divide the
contracts into smaller parts to assign their member companies. In addition,
Vietnam Association of Construction Contractors also settles tender
packages.
These phenomena affect to the fairness and truthfulness of construction
bidding. That is caused by many reasons including defects of regulation and
seriousness in implementation of the regulation. Tender regulation was corrected
several times (the first complete regulation of the Prime Minister is QD183TTG in
16/4/1994, regulations number 43CP and 93CP (1997) are considered as regulation

number 2. The decree number 88/1999/ND-CP, which was completed by the decree
number 14/2002NDCP in 5/5/2000, is considered as completely bidding
xxi
regulation). However, there are shortcomings arising in practice that need to be
added immediately.
* Competitors
Infrastructure building is an area attracting many domestic and foreign
enterprises to participate. Therefore, competition in this market is extremely tough.
The company’ competitors continuously increase in this field. It can be divided into
2 groups: + Domestic construction enterprises
+ Foreign construction enterprises
Domestic competition:
Main competitors of the company are: Song Da Construction Corporation,
Truong Son construction enterprise, Ha Noi construction enterprise, Vinaconex…
they all have years of experience.
Foreign competition:
The foreign construction firms have the following advantages:
- Receiving special priority and protection of rights in most of
big projects which are funded by their home countries or by ODA (Official
Development Assistance). Whenever there are problems related to their
benefit, they often pressurize by stopping (slowing) disbursing process.
- Having a good managing ability, modern equipment, rich in
experience…
Besides, continuous growth of local enterprises also causes difficulties for
the company. Nowadays, local building market is speedily expanding and if big
companies are not adept, they hardly compete with the local enterprises. Though
these local enterprises may not have strong financial resources, years of experience
like big corporations, they have local advantages such as: being familiar with their
area and knowing the cheapest material resources, the local cheapest human
resources…Therefore, having a good cooperation with local enterprises is

necessary.
* Suppliers
xxii
Major form of supplier in construction is financial supplier and material
supplier. In constructional field, most of completed works are not settled definitely,
the settlement is usually late, that leads to shortage of final resources. Establishing
close relationships with banks has helped the company to solve capital difficulty.
Proportion of material value in each project is very huge: about 80 to 90%, so
choosing a reliable supplier is very important. This supplier must be a big one and
give out the most reasonable price list.
II. FINDINGS
After analyzing all facts which affect to competitive ability of the company,
there have been found some advantages the company has in bidding as well as
some disadvantges which still remain.
1. Advantages
1.1 Financial resources
- The ability to mobilize capital of the company is good. This is the key
factor which has helped Thanh Nam success.
- The company has friendly relationship with many big banks, this help the
raising capital ability is more completely.
- The company has large scale of capital, and it steadily increases through
the years. This is an important factor that investor usually looks at to know trust
level of each company.
1.2 Technical ability
- Being a young construction enterprise so Thanh Nam has advantages of
technology over other construction companies of the State. Most of the machines of
the the company was purchased in the period of 1997 to 2004 so they are relatively
new.
xxiii
- Together with equipping modern machinery, the company also pays

attention to human resource training in order that the engineers are able to absorb
new technologies, operate new machines correctly.
1.3 Management ability
-The company has a good manager team. These managers are young and
dynamic.
- The company has developed mechanisms to decentralize construction
engineering management, ensured safety for workers in each enterprise. At the
same time, the company also promotes self-production management in each
enterprise.
1.4 Reputations
During 17 years of operation, the company has built a steady reputation
which is expressed through quality of the works the company has built.
2. Disadvantages
2.1 Financial resources
Production capital, current capital is in slow rotation that leads to a
temporary shortage of capital. This affects to the competition measures in bidding
for works of great value, long construction time.
2.2 Technical ability
- Economic efficiency in some projects in other provinces is not high due to
equipment is not synchronized; many stages are done by hand.
- The asynchronous machines lead to the consequence that although the
company has spent a big amount of money on new technique, the performance has
not significantly improved.
xxiv
2.3 Management ability
- The staff which directly involves in construction bidding is poor
professional because they are young and lack experience.
- The staff management is unsatisfactory leading to human resource wasting.
The manager team is crowed but not effective enough.
- Making and operating plans lack a basic foundation. Planning is still

confusing and passive, especially in big projects which require fast tempo and high
quality.
- There are no specific plans on capital and progress management, most of
these activities is done crudely and without official documents.
- Supervisor force is crowed, however in some important stages there are
few of them.
Besides these shortcomings, there are some other problems which still
remain. Marketing is not effective. In fact, the company has not paid due attention
to this activity. Advertisement has not been considered as an important activity of
the company. Brand name advertising is only through tender documents, it is not
conducted in a strategy. This fact has caused many disadvantages in creating
images to new customers. In addition, the Company participated in many bids, but
the rate of winning was not high because of late and inaccurate information. Bid
price of Thanh Nam is not appropriate. Sometimes, it is too high in comparison
with the competitors. Once it is too low. Therefore, although the company obtains
the contract, it is not affective.
2.4 Reputations
In recent bids, the company has lost many important contracts with great
value. This seriously damages the reputation of Thanh Nam. The following is the
detailed list of losing contracts:
NAMES OF THE LOSING CONTRACTS
(Source: The Project Management Department)
xxv