Building business strategy of the Petrovietnam oil corporation - one member company limited (PVOIL) phase in 2013 to 2018 and vision to 2025

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Global Advance Master Of Business Administration

CAPSTONE PROJECT REPORT

BUILDING BUSINESS STRATEGY OF THE
PETROVIETNAM OIL CORPORATION – ONE
MEMBER COMPANY LIMITED (PVOIL)
PHASE IN 2013 TO 2018 AND VISION TO 2025


Class: GaMBA01.C0111
Group Number: 02
NGUYEN QUANG THANH
HUYNH LUONG QUANG
PHAM QUANG HUY
NGUYEN TUAN ANH



HO CHI MINH 2013
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THANK YOU


To complete the graduation thesis as the current results, Group 2 members
sincerely thank and best wishes to you Lecturer, Assistant Professor and collective
staff of Griggs University and Training jobs systemsTechnology Center ETC Hanoi
National University in general and Dr. Hoang Lan Tinh has created favorable
conditions for us access to the knowledge of modern business strategy. At the same
time, have been supporting us to complete the entire Global Advanced Master of
Business Administration program MBA is organized by the center.
Sincere thanks and best wishes to the Viet Nam oil corporation and he / she is
the expert in the oil and gas industry support, make advantages, has interested and
commented as well as provide data for the group to complete this graduation thesis.
In addition, Group 2 also would like to thank those responsible for affiliate
program of the ETC Centre in Ho Chi Minh City (Gasa), classmates member
Gamba C0111 has interested, encouraged, commented to group to complete
graduation report.



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INDEX
PREAMBLE 1
1. The necessity of the subject 1

2. Research objectives 1

3. The object and scope of the study 2

3.1. The object of the study

2
3.2 The scope of the Study
2
4. Research Methodology 2

4.1. Expert methods
2
4.2. Desk research methods
3
5. Structure of topics 3

CHAPTER 1. THE BASIS OF THE STRATEGIC THEORY
MAMAGEMENT
4
1.1.

THE CONCEPT OF STRATEGY AND STRATEGIC
MANAGEMENT.
4

1.1.1.

The concept of strategy.
4
1.1.2.

The concept of strategic management
4
1.1.3.

The benefits of Strategic management:
4
1.2.

THE TYPE OF STRTEGIES 5

1.2.1.

Company-level strategy
5
1.2.2.

Business-level strategy (SBU)
6
1.2.3.

Functional-level strategy
6
1.3.

FACTORS AFFECTING STRATEGY FORMULATION 7

1.3.1.

Assessment of outside factors of the organization.
(according to
section 1.2 of Appendix 1 attached) 7
1.3.2.

Assessment within situation the organization

7
1.3.3.

Determined strengths and weaknesses
7
1.3.3.1.

Strengths and weaknesses of the service quality.
7
1.3.3.2.

Strengths and weaknesses of financial
8
1.3.3.3.

Sustainable competitive advantage
8
1.4.

STRATEGY FORMULATION PHASE AND TOOL 8

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1.4.1.

EFE matrix_ External Factor Evaluation matrix.
9
1.4.2.

IFE matrix_ Internal Evaluation matrix.
10
1.4.3.

Competitive Photo matrix (CPM)
10
1.4.4.

SWOT Matrix
11
1.4.5.

QSPM Matrix
12
1.5.

STRATEGIES, POLICIES OF TRADING 13

1.5.1.

Determined the current mission, objectives and strategy.
13
1.5.2.

Long-term and annual goals of the company.
13
1.5.3.

Strategy of the SBU
13

1.5.4.

The function strategies
14
1.5.4.1.

Marketing strategy
14
1.5.4.2.

Research and development strategy.
14
1.5.4.3.

Materials management and purchase strategy.
14
1.5.4.4.

Operational, production strategy
14
1.5.4.5.

Financial Strategy
14
1.5.4.6.

HR Strategy
15
1.6.

SUMMARY CHAPTER 1 15

CHAPTER 2:. ANALYZING SITUATION OF BUSINESS STRATEGY
AND BUSINESS ENVIRONMENT OF THE PETROVIETNAM OIL
CORPORATION
16
2.1. PETROLEUM MARKET SITUATION 16

2.1.1. The role of the petroleum industry and regulation petroleum in
economy.
16
2.1.1.1. The global oil market and development trends.
16
2.1.1.2. The products characteristics and distribution of petroleum.
17
2.1.2. Government regulation of petroleum markets.
18
2.1.2.1. The organization.
18
2.1.2.2. Production and distribution.
19
2.1.2.3. Price.
19
2.1.3. Petroleum demand of Viet Nam.
20
2.1.4. Petroleum distribution system of Viet Nam.
20
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2.1.4.1. Petroleum supply.
20
2.1.4.2. Market segmentation of the petroleum focal point business.
. 21
2.1.4.3. Petroleum stored system of the
petroleum
focal point business.
21
2.1.5. International petroleum market
22
2.1.6. Petroleum market forecast in Viet Nam 2013 - 2018.
23
2.2.

OVERVIEW OF PETROVIETNAM OIL CORPORATION 23

2.2.1.

Introduction.
23
2.2.1.1. General Information 23
2.2.1.2.
Activities of production and business
.
24
2.2.1.3. Ownership structure 24
2.2.1.4. The organizational structure 24
2.2.1.5.

Mission, vision and goals of PV OIL

24
2.2.1.6. Management model
.
(in Section 2.7, Appendix 2 attached): 25
2.2.2. PV OIL storage 25
2.2.3. PV OIL’s retail network 26
2.2.4. Petroleum supply chain management/ business policy of PV OIL 26
2.2.4.1.
Organizational and management model of petroleum
distribution system
.
26
2.2.4.2. Petroleum systems of PV OIL’s business organizations (Section
2.10, Appendix 2 attached) 26
2.2.5.

Source policies
26
2.2.6. Price policy 27
2.2.7.

Financial investment situation.
27
2.2.8.

Result of business activities in 2008 so far.
27
2.3.

ANALYSIS OF FACTORS INFLUENCING PV OIL BUSINESS

OPERATION 28

2.3.1.

Macro environment analysis.
28
2.3.1.1.

Economic factors:
28
2.3.1.2.

Factors of policy from the government, law and pilitic:
29
2.3.1.3.

Technology factors.
30
2.3.1.4.

Nature factors
30
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2.3.2.

Analysis of oil and petrol micro-environment.
31
2.3.2.1. Infrustrucure of oil and petrol retailing system of Vietnam. 31

2.3.2.2.

Competitor in the sector.
32
2.3.2.3.

Potential competitors
33
2.3.2.4.

Developing and improving product and replacement product
33
2.3.3.

Analysis of internal background
34
2.3.3.1.

Human resource
34
2.3.3.2.

Research and development
35
2.3.3.3.

Production and manufacture
36
2.3.3.4.

Investment
36
2.3.3.5.

Accounting Finance
37
2.3.4.

Identify the strengths, weaknesses, opportunities and threats to
PV OIL
40
2.3.4.1.

Strengths
40
2.3.4.2.

Weakness
41
2.4.

ANALYSIS OF MATRIXES TO SELECT BUSINESS STRATEGY
OF PV OIL 41

2.4.1.

Analysis of competitive advantage and build the potential
success, the success of the PV potential network OIL.
41
2.4.1.1.

Competitive matrix image
41
2.4.1.2.

Build up successful potential and successful potential network
for PV OIL
42
2.4.2.

Connecting internal and external factors to set up possible
strategies.
43
2.4.2.1.

Matrix values external factors (EFE) and internal factors
(IEF)
43
2.4.2.2.

Total important mark in matrix IFE and EFE.
45
2.4.3.

Analyze matrix SWOT.
46
2.4.3.1.

Quantitative analysis on macro, micro-environment and
internal situations.

46
2.4.3.2.

Analyze matrix SWOT
49
2.4.4.

Matrix analysis QSPM.
52
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2.4.4.1.

QSPM`s quantitative Analysis Matrix for the group S.O
52
2.5.4.2.

Commented the group SO, WO, ST, WT of QSPM matrix
58
2.5.5.

SPACE matrix analysis-strategic location-activities evaluation
60
2.5.5.1.

Analysis of value inside and outside the PV OIL
60
2.5.5.2.

SPACE matrix analysis
62
2.5.6.

Strategic Options for PV OIL
62
2.5.7.

The options of SBU level strategy.
63
2.5.7.1. How competition in the petroleum industry 63
2.5.7.2.

Value chain analysis and identification
64
2.5.7.3.

Market segments and value chain of goods:
67
2.5.7.4.
Selection
of the value chain and target market of PV OIL 70
2.5.7.5.

The SBU level strategy
71
2.6.

SUMMARY OF CHAPER 2 71

CHAPTER 3 BUSINESS STRATEGIC PLANING FOR THE
PETROVIET NAM OIL CORPORATION IS A PERIOD 2013-2018 AND
VISION TO 2025
72
3.1.

BUSINESS STRATEGY OF PV OIL IN PERIOD 2013-2018 AND
VISION TO 2025 72

3.1.1.

Review the mission, vision and goals of PV OIL.
72
3.1.2.

Annual and long-term goals of PV OIL.
73
3.1.2.1.

Specific objectives of PV OIL.
73
3.1.2.2.

The objective functional units of the company.
74
3.1.3.

Strategic Options for PV OIL.
75
3.1.4.

The functional strategies of PV OIL.
75
3.1.4.1.

Marketing
75
3.1.4.2.

Financial
76
3.1.4.3.

Human resoure
77
3.1.4.4.

Operation and production
79
3.1.4.5.

Research and development product
80
3.1.4.6.

Strategic import and export of crude oil and petroleum
management.
80
3.1.4.7.

Combining the strategic function of the PV OIL.
80
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3.1.5.

The relationship between the functional strategies to increase
business efficiency.
81
3.2.

PERFORMANCE SOLUTIONS. 82

3.2.1.

Developing market
82
3.2.2.

Product differentiation with other petroleum enterprises.
82
3.2.2.1. Creating value for customers. 83
3.2.2.2. Provide value for customers. 83
3.2.2.3. Product difficult to imitate. 83
3.2.3.

Improving risk management.
84
3.2.3.1.

Risks of the project (fail investment projects).
84
3.2.3.2.

Risks from customers (customers leave, or not payment order).

84
3.2.3.3.

Transition risks (large changes in technology or direction of
strategy).
85
3.2.3.4.

Risks from competitors (appears competitors can not be beat).
.
85
3.2.3.5.

Risk of brand (brand decrease value in customer).
86
3.2.3.6.

Sector risk (business to become the non-profit).
86
3.2.3.7.

Risk of delayed (businessnot growth or even decline).
87

3.2.4.

Venture and cooperation
87
3.3.

RECOMMENDATIONS. 88

3.3.1.

For state and Government.
88
3.3.2.

For Petroleum Vietnam Oil Corporation and owned Vietnam
National Oil and Gas Group
90
3.3.2.1. Short term recommendations. 90
3.3.2.2. Long-term recommendations. 92
3.4.

SUMMARY OF CHAPTER 3 94

GENERAL CONCLUSION
95
REFERENCES.
96
APPENDICES ATTACHED
97

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PREAMBLE
1. The necessity of the subject
Energy with its essential importance has strong influence on economic
policy, politics of every country in the world, including oil energy sources play a
very important role and account for nearly absolute in the structure of energy
sources used by humanity today. So, the oil energy security is the country seen as
a pressing need in the life and daily activities of the people.
Our country's economy is moving according to the market mechanism with
the management of the state, gradual integration into the regional and world
. The
building business strategies for each business, oriented sustainable development in
the market mechanism is an essential. Business strategies to help managers and all
employees in the enterprise aware of the purpose and direction of their business.
hrough which all members of the business will know what to do, and encourage
them to strive to achieve the short-term performance while improving better long-
term interests of the business. It helps the administrator to quickly grasp business,
take advantage of opportunities and to limit the risks due to environmental changes
brought.
Derived from petroleum fuel needs of the country, its importance in the
socio-economic development of the country, as well as oil and gas business
strategy of companies in Vietnam, Group boldly chose the subject "Building
business strategy of PetroVietnam Oil Corportaion - One Member Company
Limited (PV OIL) phase in 2013 to 2018 and vision to 2025"as a graduation
thesis.
2. Research objectives
- Develop business strategies of PetroVietnam Oil Corporation based on the
overall objectives of the enterprise is: "To develop and complete downstream

stages in the Oil & Gas industry and strive to become the Corporation leading
in Vietnam, on a par with oil and gas companies in the region and the world ".
- Analysis of demand for gasoline, the capacity in the country and abroad, the
response capacity of the existing oil companies, analysis development
capabilities of the distribution system through strategies.
- Proposed strategy to build oil business systems to develop corporations in a
sustainable way in the period 2013-2017 and vision to 2025.
- Implementation of the policy, the policy of the state of the business system,
towards markets in the region and the world, proposals to the government on
policies to ensure implementation of development strategy petroleum
Vietnamese brand in general, the oil and gas business strategy of Vietnam in
particular, to create a favorable business environment and future development.
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3. The object and scope of the study
3.1. The object of the study
- Research on business activities in the petroleum sector of the Vietnam Oil
Corporation, from which made the business strategy of the PetroVietnam Oil
Corporation, in order to increase competitiveness, increased market share,
reduced intermediaries, reduce production costs in the petroleum industry in
Vietnam.
- For the export - import oil raw of PV OIL is an individual work of
PetroVietnam and the Vietnamese Government tasked PV OIL done this work
without profit, so the raw oil export-import will not be subject research in the
graduation thesis of our group 02.
3.2 The scope of the Study
Investment due to the oil systems business development of the PetroVietnam
Oil Corporation over the years and from the predecessor company, with many
different systems and policies, it is difficult for research results for consistency, to

ensure the effectiveness and practicality of the subject so the author limited
research data collection from 2008 until now (anniversary of the PetroVietnam Oil
Corporation).
Scope of research through secondary information sources are sources of
business statistics PV OIL, the Vietnam National Oil and Gas Group, the Ministry
of Industry and Trade, the primary source of information on demand for petroleum
fuels domestic and region, through consultation with industry experts to classify
the importance of the elements in the matrix classify level of the business response
to the elements, so that the subject will study the oil and gas business in the future
through strategic.
4. Research Methodology
The study is based on the business strategy management documentation,
gasoline demand forecasting documents of the Ministry of Trade and Industry that
the author has collected, as well as speeches, interviews, gather opinions of
managers and experts of the PV OIL and experts are active staff in the field of oil
and gas business in the company of Vietnam. In addition, the research information
and data to be gathered and analyzed based on reporting of PV OIL.
In order to study the problem for results in a precise and effective when
applied in practice, the team used the following research methods::
4.1. Expert methods
Consult experts in the petroleum industry, petrochemical industry, fuel storage
construction industry in Vietnam.
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4.2. Desk research methods
The secondary information is collected and used mainly from the
statistics of PetroVietnam Oil Corporation. Internal information from the
petroleum business reports of PV OIL from 2008 to date.
5. Structure of topics

Subject consists of three chapters:
- Chapter 1. The basis of the theory of strategic management
- Chapter 2 Analyzing situation of business strategy and business
environment of PetroVietnam Oil Corporation.
- Chapter 3 Business strategic planning for the PetroVietnam Oil
Corporation period 2013-2018 and vision to 2025
Despite our best efforts to try to study the subject, but because this is a new
topic, to collect data from a variety of sectors, many different sources, but more
importantly, no databe made public, should make sure that the thesis was flawed,
would be teacher to guide, teachers in the board dot dissertation, the sincere reader
comments to this thesis is more complete.
Our warmest thanks!

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CHAPTER 1. THE BASIS OF THE STRATEGIC THEORY
MAMAGEMENT
1.1. THE CONCEPT OF STRATEGY AND STRATEGIC MANAGEMENT.
1.1.1. The concept of strategy.
Strategy is the process of determining the long-term basic goals of the company,
option ways of action and allocation of necessary resources to implement the goals.
(Alfred Chander)
Strategy is a form or a plan to coordinate the objectives, policies and action
sequences into a unified whole. (James B. Quinn)
Strategy is a plan of consistent, comprehensive and coordinated, are designed to
ensure that the basic objectives of the company will be done. (William J. Glueck)
Strategy, Michael L. Porter, the father of the theory of competition argued that:
-

First, the strategy is the creation of unique and valuable position includes
different activities
.
-
Second, strategic is the choice, barter in competitive
.
-
Third, the strategy is creating fit among all the Company's activities
.
So, first of all, strategic related to objectives of business.Second, the strategy is
how to implement the actions and decisions are closely related to each other and
selection methods to coordinate actions and decisions.
Business strategy exploit the
fundamental strengths (resources and capabilities) and to take into account the
opportunities and challenges of the external environment.
1.1.2. The concept of strategic management
Strategic management is the process of research, analysis of the external
environment and within the company; present and future; established corporate
goals, planning, implement and testing of strategies to effectively use resources to
achieve the desired objectives. (according to section 1.1 of Appendix 1 attached)
1.1.3. The benefits of Strategic management:
Strategies contribute to economic organization is more responsive and dynamic
before forecasts, and the volatility of the market, from which rational decision-
making and control over their operations, increase the competitive strength of the
business, and gradually ensure the strong position of the business in the market
mechanism.
- Business strategy can be considered as a "platform" activities of business, is the
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target of all members to strive towards.
- Strategy is an expression of the concept of enterprise value.
- Strategies to help business leaders get the direction and vision of the future.
- Strategy is the creation of the enterprise management.
- Strategy is an expression of the competitive position of the business.
Michael Porter has said in the book "Competitive Strategy" that "competitive
strategy lies in the relationship between the company and its market".
Due to the importance like that, businesses needs building for themselves a long-
term business strategy, it is essential to be able to help businesses stand and
development in future. However, the business environment are fluctuations, the
resources of the business there are always change in strategic stages, so a business
strategy needs to be flexible, changing in accordance with objective reality to ensure
the survival and development.
1.2. THE TYPE OF STRTEGIES
1.2.1. Company-level strategy
Growth and development, every company should have its own development
strategy, called company-level strategy.The process of growth and development of
the company can be represented: Focus on a business areas in the domestic market
=> Integration or expand markets outside, globalization works => Expand
operations into new business areas.
Company-level strategy is the overall strategy system, can apply for the single or
multi-industry manufacturing company - business products or services on the
domestic market or multinational market.
These strategies have been commonly applied in the group companies of the
developed countries in the world since 1980 and in the last 1990.
Depending on the characteristics of the resources of the business and the
attractiveness of the business industries, senior managers need to select strategies
for each sector to adapt to the environment inside and outside.
In fact, for business, the strategies that administrators can choose include:
-

The growth strategies

-
The horizontal integration strategies

-
The decline strategies

- The adjustment strategies
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1.2.2. Business-level strategy (SBU)
Business or enterprise level strategy is strategies to maximize competitive
advantage and profitability for the company to be able to compete effectively in a
particular industry has been pursuing.
It includes competitive business-level strategies investment strategies.
1.2.3. Functional-level strategy
Is the lowest level strategy of a company. It is a set of decisions and actions targeted
in the short term (usually less than 1 year) of different functions in a company.
Function strategy plays an important by the implementation of strategy, managers
will exploit the strengths of the resources in the company. That is the basis for
research building the company's competitive advantage, support for competitive
strategy. Usually the function components of the company such as market research
and development, planning, human resources management, accounting financial,
production… will build up its own strategy and be accountable main task before the
Board, the Board of directors on the results achieved.
Based on the strategic approach, business strategy is divided into four categories by
administrators as follows:
- Strategy focuses on the key factors:

Guiding ideology of the strategic
planning here is not to spread resources, on the other hand need to focus on those
activities is crucial for the company's business.

- Attack creative Strategy:
In this strategy, the construction of access to basic way is to always look at the
problem is considered to be common, difficult to do otherwise is to ask the
question: "why", to review theseemingly concluded.From the row of question and
doubt the immutability of the problem, there may be new discoveries, as the basis
for the company's business strategy.
 Strategy based on the relative advantages:
Directing thought strategic planning here starting from the analysis, comparing
products or services their company compared to competitors, through analysis, to
find out their strengths to support for business strategy.
 Strategies to exploit the degree of freedom:
The strategy formulation here is not aimed at the key factors, which aims to exploit
the possibility of the factors surrounding the key factor.
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1.3. FACTORS AFFECTING STRATEGY FORMULATION
1.3.1. Assessment of outside factors of the organization.
(according to section
1.2 of Appendix 1 attached)

1.3.2. Assessment within situation the organization
Internal situation of the business is usually assessed by functional areas such as:
Finance; Human Resources; Governance; Structure; Marketing; Research /
Development; Information Technology.

Chart 1.3.2. Diagram of the main activities and support activities
The internal businesses analysis will enable to identify the strengths (S) and
weaknesses (W) of the business. Since then, the business strategy chosen need to
maximize the strengths and overcome the weaknesses of the business.
Similarly in the technical analysis of external factors, in order to quantify the
internal analysis of business, people use "inside factors evaluation matrix" (IFE)
.
1.3.3. Determined strengths and weaknesses
1.3.3.1. Strengths and weaknesses of the service quality.
For a long time, many researchers have tried to define and measure service
quality. However, when it comes to quality of service, we can not not mention the
huge contribution of Parasuraman & CTG (1988, 1991). Parasuraman & CTG
defines service quality as “different level between the expectations of consumers of
services and their perception of the outcome of the service”. The authors initiated
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and used qualitative and quantitative research to develop and test a measuring scale
the components of service quality (called SERVQUAL scale)
. SERVQUAL scale
measure five components of service quality, which is:
- Reliability
- Responsiveness
- Assurance
- Tangibles
- Empathy
1.3.3.2. Strengths and weaknesses of financial
To analyze the financial situation of the business need to use the data from
the financial statements of the business for some of years and compare these
indicators together

.
The indicators can be used to analyze such as: the total capital of the business,
revenue, profits and the general indicator
.
1.3.3.3. Sustainable competitive advantage
A company is considered to have a competitive advantage when its rate of return
higher than the average rate in the industry. And the company has a sustainable
competitive advantage when it is able to maintain high rates of return in a long time.
Chart 1.3.3.3. Standards of sustainable competitive advantage:

Standard
Content
Worth
Help enterprises neutralize the threat and
exploit opportunities
Rare
There is not much competition
Difficult to
imitate
- Historically: Culture and unique brand
- Cause and effect is not clear
- The complexity of social
Do not replace
There is no equivalent strategy

1.4. STRATEGY FORMULATION PHASE AND TOOL
There are three stages to form the business strategy and each stage using the
different tools.
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Phase 1: The period of data collection and systematized information
This phase summarizes the basic information has been collected and systematized to
form the business strategy. This phase uses tools: EFE Matrix.
Phrase 2: Combined period
This phase selection, arrange, combine external environmental factors, internal
factors to make the strategy feasible. This phase will use the matrix tool: Strengths -
Weaknesses, Opportunities - Threats Matrix (SWOT).
Phrase 3: Decision period
This phase uses a only tool is the quantify strategic planning matrix (QSPM).
QSPM Matrix use the information in the first period, an objective assessment of the
business strategy can be selection in the second period in order to decide whether
the business strategy is best for business
.
1.4.1. EFE matrix_ External Factor Evaluation matrix.
EFE matrix sequence is set in 5 steps:
Step 1: Make a list of factors that play a decisive role in the industries in which
enterprises trading, including opportunities and challenges.
Step 2: Evaluate the importance of each factor on a scale from 0.0 to 1.0 (degree of
importanceincreasing) with the sum of the elements equal to 1. This important level
based on business that enterprises operating.
Step 3: Scoring from 1 to 4 for each factor with score that show degree of business
reaction with that factor. 4 is good reaction. 3 is more than average reaction. 2 is
average reaction and 1 is less reaction.
Step 4: Determine the total score for each factor (by the product of step 2 and step
3).
Step 5: Determine the total of score on the importance of business by the total of score in
step 4.
The highest score is 4 and lowest is 1,0 Average is 2,5. The higher score indicates
businesses respond well to external factors.

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Table 1.4.1. EFE Matrix
The main external
factors
Important level
Classication
score
Important
score
Factor 1



Factor 2



……



Factor n



Total
1,0

xx
1.4.2. IFE matrix_ Internal Evaluation matrix.
The IFE matrix settings are the same as for the EFE matrix, but with the object is
reaching company, analysis to formulate strategy. Determine the total score on the
importance of the company (by total score in step 4). The highest total score is 4
and lowest is 1.0 average is 2.5
; important score less than 2.5 shows that the
company does not have many strong points and not yet overcome the weaknesses
of the company, Score higher than 2.5 shows that the company has many strengths
and can overcome well the weaknesses.
Table 1.4.2. IFE Matrix
The main within
factors
Important level
Classification
score
Important
score
Factor 1



Factor 2



……

Factor n



Total
1,0

xx
1.4.3. Competitive Photo matrix (CPM)
In the external environmental factors, competitive factors are the most important
factor. Competitive Photo matrix is an extension of the matrix of external factors
evaluation (EFE) in the case of the degree of importance, and classification and
toatal of important score have the same meaning
. Competitive Photo of matrix
identifys the major competitors and their strengths, weaknesses. There by helping
the Company has appropriate strategy
.


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Table CPM Matrix
N
o
Factor
Impor
-tant
level
BIZ X

BIZ Y
BIZ Z
Classifi
ca-tion
score
Import
ant
score
Classifi
cat-ion
score
Impor
tant
score
Classific
a-tion
score
Impor
tant
score
1
Factor 1







2

Factor 2







3
……







4
Factor n








Total
score
1,0

xx

xx

xx
1.4.4. SWOT Matrix
SWOT matrix is a tool combining the strengths (S), weaknesses (W), opportunities
(O) and threats (T) to form four types of strategies:
- SO Strategy: Use the strengths within the business to exploit the opportunities
of the external environment.
- WO Strategy: Take advantage of external opportunities to improve the within
weaknesses.
- ST Strategy: Use the strengths of the business in order to avoid or reduce the
threats from the external environment.
- WT Strategy: This is the defense strategy to reduce within weaknesses and
external threats.
A SWOT matrix is illustrated by the following boxes:

Table 1.4.4. SWOT Matrix


S
List the strengths
W
List the weaknesses
O
List the opportunities
The strategy S-O
The strategy W-O

T
List the threats
The strategy S-T
The strategy W-T

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1.4.5. QSPM Matrix
Matrix QSPM use information obtained from the matrix in the first stage (stage to
collect and systematize information) and the matrix in the second stage (matching
phase), from which an objective assessment of the business strategy can be
replaced
.
The chosen strategies for inclusion in the QSPM matrix not all strategies are found
in stage 2
.
To build QSPM matrix need through 6 steps:
Step 1: List the factors S, W, O, T is taken from the EFE matrix.
Step 2: Classification for each factor in accordance with the EFE matrix.
Step 3: Studies matrix in phase 2 and determine the replaceable strategies need to
consider.
Step 4: Determine the number of the attractive score (AS) for each factor: rated
from 1 to 4, with 1 is not attractive, 2 is a little bit attractive, 3 is quite
attractive, 4 is really attractive.
Step 5: Total the number of the attractive score (TAS) with each row by by
multiplying the classification score in step 3 with the AS score in step 4.
Step 6: Total the number of the attractive score in each strategy.
The most attractive strategy is a strategy has total in step 6 is the highest score.
Generally, the enterprise business process must always determine the annual goals

and long term goals.Business strategy is the path and step on the path to reach the
goal.
Table 1.4.4. QSPM Matrix
The main strategies
The strategies can be chosen
Classifie
d
Strategy 1
Strategy 2
AS
TAS
AS
TAS
I. The within factors





Factor 1





Factor 2

……





Factor n





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II. The external factors





Factor 1





Factor 2

……





Factor n





Total attractive score


xx

xx
1.5. STRATEGIES, POLICIES OF TRADING
1.5.1. Determined the current mission, objectives and strategy.
Mission reflects the important task of business to business environment and is
often expressed through the brief philosophy of business.
Mission is the reason for existence of the business shows strive direction of
business during the lifetime. Businesses can change the strategy to carry out the
mission, but rarely change their reason for existence.
The goal is the final desired result that businesses need to achieve. Target point in

the direction for all decisions and form the standard measure for the
implementation in practice.
1.5.2. Long-term and annual goals of the company.
Concept: The objective is to develop the mission, but is built separately and in more
detail. Be shaped in long, medium or short term:
Long term: (more than a year, usually up to 10 years)
.
Short-term: (less than a year).
To have meaning, the goal must have the following characteristics
:
1. Precise and measurable.
2. Navigate to the key issues.
3. Challenging but can be done (fact).
4. Period of time to perform.
5. Provide tools to evaluate the performance of managers.
1.5.3. Strategy of the SBU
At this level, the plan must give the overall portfolio of an organization and the
most important thing is building and maintaining a portfolio of highly effective
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business. In general, it includes the decision to inform the company's mission; offer
short and long term goals; identify strategies to improve the efficiency of each SBU;
determine the strategy for coordinating results of the SBU are related to each other;
redistribution of resources; strategic decision to establish and maintain the resources
to create competitive advantage; strategic decision to develop the company.
1.5.4. The function strategies
1.5.4.1. Marketing strategy
Marketing strategy can be a powerful impact on the efficiency and cost structure
of a business.Through marketing strategy, the company won the position by the

disposition of its pricing, promotion, advertising, product design and distribution.
It can play a major role to increase the company's efficiency.
1.5.4.2. Research and development strategy.
The prominent role of research and development in the effort to achieve higher
efficiency of two points:
- R & D function can improve efficiency by product design easily made,
because it can significantly reduce assembly time, leading to higher
productivity and lower costs.
- The improvement process, which is an improvement on how to operate the
production process to improve efficiency. Process improvements are often a
major source of competitive advantage.
1.5.4.3. Materials management and purchase strategy.
This function is considered to be scientific management methodology it is
becoming an increasingly important activity in many businesses because it helps
businesses create low-cost advantage. Therefore, a materials management can
effectively reduce the amount of cash in reserve to increase investment in
machinery and equipment.
1.5.4.4. Operational, production strategy
Economies of scale are reducing the unit cost of products related to large amounts.
One reason leading to economies of scale most obvious is the ability to allocate
fixed costs for manufacturing large amount of products. Fixed costs are the costs
incurred to produce a product that corresponds to a level of output; this cost
includes the cost of purchasing machinery and equipment, the cost of setting
machinery for production time, workshop fees, advertising expenses and R & D.
1.5.4.5. Financial Strategy
The objective of the financial strategy is to establish a fund and establish an
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appropriate financial structure, to help businesses achieve the goals set out.Some

content note in the financial strategy are: cash flow planning, consider the
relationship between debt and equity; dividend policy.
1.5.4.6. HR Strategy
Labor productivity is one of the key determinants for efficiency and cost structure
of a business. Higher labor productivity, cost per unit of product decreases. The
challenge for the human resource management function in a company is to find
out how to increase labor productivity. There are three basic options for doing this,
namely: training employees, organized labor force in self-managed groups, links
between remuneration and performance.
1.6. SUMMARY CHAPTER 1
Contents of Chapter 1, setting out an overview of a theory constructs the
company's business strategy 1, with 5 main parts as follows:
1. The concept of strategy and strategic management
2. The type of strategies
3. Factors affecting the strategy formulation
4. Strategy formulation phases and tools
5. Strategies and policies of trading


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CHAPTER 2:. ANALYZING SITUATION OF BUSINESS STRATEGY
AND BUSINESS ENVIRONMENT OF THE PETROVIETNAM OIL
CORPORATION

2.1. PETROLEUM MARKET SITUATION
2.1.1. The role of the petroleum industry and regulation petroleum in
economy.
2.1.1.1. The global oil market and development trends.

Oil is to eliminate fossil fuels, hydrocarbon, does not have the ability to regenerate
and is now the main fuel not able to effectively replace.
The world's oil production is approximately 90 million barrels / day, equivalent to
4440 million tonnes / year. According to the OPEC output in 2011 is estimated at
82.6 million barrels / day (not including liquefied natural gas - LNG). Measure, the
12 countries of OPEC accounted for 36%.
World oil demand in 2011 is estimated at 88.2 million barrels a day, up 1.1% from
the previous year. Oil demand increases tended to economic growth (GDP).
Refining capacity world's reserves tend to be narrow. The 2001 capacity only uses
the 80% of the market in 2005 - about 85%. But new projects to increase refining
capacity, upgrading the old factory is being done, including many factories were
conducted in Asian countries.
In recent years, oil prices always unstable, fluctuating and irregular, depending on
the micro-economic factors. Because oil is standardized commodities traded
commodity exchange markets focus (Commodity Exchange) should international oil
and petroleum products are subject to review Futures contracts are traded on
Commodity Exchange and the transaction agreement (OTC).
The information above is led to judgments estimated trend following:
- Investment costs for refineries and refining costs tend to rise due to the
quality requirements, require increased economies of scale in the oil refining
process; refining stage to vertical integrate on the stage distribution to share
profits from the retail stage;
- The major oil producing countries invest in refining capacity, permanent
more closely associated with the stage downstream of these countries will
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affect the supply of oil products in the world, and the demand for
transportationcrude oil and products will change, economies of scale in
importing products will increase;

- The trend of international oil company (IOC) incorporated to increase the
competitiveness of the small-scale operation and fields of activity and to
restrict, share risks in each separate stage of the oil and gas industry;
- national governments will continue to implement regulatory policy for the oil
sector to the micro-economic stability, energy security and other national oil
companies (NOC) will remain is toehold to governments implement policies;
- Petroleum products price will continue to volatility and unpredictable;
- The role and position of national oil companies will continue to reinforce;
international oil companies still occupy an important position for investments
in the countries due to the main technical factors and resources;
- Economic concentration, focus resources to improve competitiveness will still
be the inevitable trend in the oil and gas sector.
2.1.1.2. The products characteristics and distribution of petroleum.
Oil is a strategic commodity of every nation, essential to social life, have a direct
impact on economic development and national security of the country.
Petroleum is one of the main energy source be balanced in energy balance policy by
State and is one of the important items in the National Reserve. On the other hand
the Vietnamese oil and gas industry itself and the business of petroleum products is
one of the key economic sectors of the country. Actual development over time has
shown that the development of this sector contributes greatly to GDP growth as well
as to the cause of industrialization and modernization of Vietnam.
Petroleum is one of the items is very sensitive to the changes in the political and
economic world. The time now due to Vietnam just has the first refinery is Dung
Quat, amount less than 6 million tons of products, so any fluctuations in world
market prices have a strong impact on the domestic market.
Particular nature of the oil industry in general and petroleum in particular fields
represented by the following factors:
- Highly internationalized: Oil and oil products was high standardized
commodities; using needs is popular on a global scale, are traded in
international commodity markets;

- Operations industry of multinational companies: The oil and gas sector is
risky business, especially in the upstream, requires large investments, many