Xây dựng chiến lược phát triển kinh doanh cho công ty cổ phần PJICO

Luận văn
Xây Dựng chiến lược phát triển kinh doanh cho công ty
Cổ phần PJICO
THESIS

BUILDING THE BUSINESS DEVELOPMENT
STRATEGY OF PETROLIMEX JOINT STOCK
INSURANCE COMPANY (PJICO)
FROM 2015 TO 2020

1


Hanoi, date

January, 2010

COMMITMENT
Our group would like to commit:
- This theme is the research result of our group, not of any individual in the
group. Analyses in the theme of our group base on theory learned at class
GaMBA01.M05 together with materials provided by the school and other
references. Data mentioned in the research are true and have clear origin.
- After being consulted by Subject Group of the school, our group has
acquired and supplemented and amended the report in conformability to the
requirements of the program, and ensure objective independence in our own
research.

2

APPENDIX
No.

CONTENT

PAGE

1

BOOK COVER

1

2

COMMITMENT

2

3

APPENDIX

3

4

LIST OF TABLES

4

5

LIST OF FIGURES, GRAPHS

4

6

INTRODUCTION
PART I: REASONING BASIS FOR STRATEGY BUILDING
I./ STRATEGY ADMINISTRATION
1. Definition of strategy administration
2. Implications of strategy administration
3. Basic competition strategies in each business field
II/ PROCESS OF BUILDING STRATEGY
1. Determining business field
2. Strategy targets
3. Analyzing macro environment
4. Strategy analysis technique
5. Choosing business strategy
6. Organizing strategy implementation

5

7

8

7. Check, evaluate the implementation result and adjust

PART II: ANALYZING BASIS FOR STRATEGY BUILDING
1. Introducing the Company
2. Analyzing macro environment
3. Analyzing business environment
4. Analyzing with SWOT matrix
PART III: CHOOSING AND ORGANIZING THE

8

20

48

DEVELOPMENT STRATEGY IMPLEMENTATION
9

1. Strategic plans
2. Choosing strategy, strategy basic content
3. Strategy solutions
4. Complaints
5. Implementation roadmap

10

CONCLUSION

71

11

REFERENCES

72

3


LIST OF TABLES
Table 1: Origin of competition advantage and basic competition strategies
Table 2: Business production situation of the company
Table 3: Business production result of the company in 2007
Table 4: Original insurance business result of each unit in 2007
Table 5: Business production result of the company in 2008
Table 6: Original insurance business of each unit in 2008
Table 7: Business production result of the company in 2009
Table 8: Original insurance business result of each unit in 2009
Table 9: Original insurance revenue in 2007
Table 10: Original insurance revenue in 2008
Table 11: Original insurance revenue in the first 6 months of 2009
Table 12: SWOT matrix

LIST OF FIGURES, GRAPHS
Figure 1: Process of making strategy
Figure 2: Business operation result of the company (2007 – 2009)
Figure 3: Market share in 2007
Figure 4: Market share in 2008
Figure 5: Market share of 6 months in 2009
Figure 6: Current organizational outline of the company
Figure 7: Operation market of service marketing
Figure 8: Current organizational outline of the company

Figure 9: Organizational model outline according to development strategy

4


INTRODUCTION
1. The urgency of the theme
In the market economy towards integration, business production of product, service is
not completely decided by the company but the market. In which international market,
regional market controls local market which has to rely on the international market –
That is the world market unifies but it often changes due to changes of factor groups
such as international economic, financial-currency, political, social, culture
environment.
For that reason, if the company does not accurately forecast changes of factors in
regional, international environment affecting market scale, it will meet risk in
business production, as goods production is not conformable to market demands in
terms of quality, appearance, price, taste, etc, thus, it cannot compete in the market.
To avoid risk in business production, the Company is compulsory to build strategy.
Only with strategy, it can avoid risk in business in an integrated world. In a world
with global economy, competition is becoming more and more severe, thus, strategy
becomes more valuable to the company.
Insurance is a very important field to nations in general including Vietnam. Insurance
is not only a risk removing method but also an effective capital-mobilizing channel for
the economy. Practical insurance business activity in the last time shows continual
growth of insurance sector.
Insurance market in Vietnam in recent time is very active, various and is becoming
more and more professional. Number of insurance dealing companies becomes
increasing. Diversified possession forms in both life and non-life insurance and three
fields of human, asset and civil responsibility insurance. Companies operating in
insurance sector have gradually satisfied demands of customers.

Of all many insurance companies, PJICO is evaluated as one of the companies with
fastest development speed in the market and at present PJICO is one of the four
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leading insurance companies in Vietnam’s non-life insurance market. Right from
beginning days of establishment and during its development process, PJICO did
determine its mission and was always patient to fulfill this mission. That is:
Providing synchronous, various and high-quality insurance service orienting
customers; creating a professional, transparent, active and friendly working
environment for staff to uphold their competence and creativity; effectively
cooperating with partners to contribute and develop the community; Sustainably
developing to increase value for shareholders through diversification of insurance
activity and financial investment.
Upcoming time is seen as the difficult period of the economy. In the insurance
market, there appears more competition from newly established insurance
companies as well as market newly joining foreign ones. Thus, to promote the
leading position in Vietnam’s electric cable market as well as ensure sustainable
development in next time, the Company needs to build competition strategy in
current environment as well as development orientation in upcoming time.
2. Research aims
Based on researching general reasoning on business strategy and overview of the
insurance market in Vietnam; The theme goes deeply to analyze the business
environment, real state of insurance business operation and development tendency
of this market, from that to build a sustainable development strategy at Petrolimex
Insurance Joint Stock Company.
3. Research object and scale
The object is Petrolimex Joint Stock Insurance Company, hereinafter called PJICO
COMPANY.
Research scale: The theme focuses on studying, analyzing the real state of the

company, competitive factors inside the company. Analyzing the state of
competition environment to the development of the market, domestic and foreign
insurance businesspersons (competitors) hereinafter called COMPETITORS. From
that propose investment strategy to develop the company and competition strategies
to ensure sustainable development of the company.
6


4. Scientific implication of the theme
Systematize reasoning on building business strategy of a medium and small
enterprise. A common form of enterprise of Vietnamese economy, especially joint
stock company – a form showing important role in the integration process of the
country to the world and region economy. Analyzing business environment in
insurance sector, risking business sector, sharing loss with customers, insurance
products are services with unique, abstract but more extremely specific, practical
features than all other products in the market once provisions in the insurance
contract are implemented timely, effectively.
From that draw strong and weak points of the Company in this sector to build
competition strategy in the increasingly severe competition environment. That is
likely to a model for medium and small companies in different sectors of the
economy which are based on medium and small enterprises of the country.
5. Research methods
Main research methods used in the process of making this dissertation are analysis,
reasoning, comparison, generalization, forecast, etc based on practical data,
situation of the Company and market investigative documents of prestigious
competence evaluating organizations to find out specific solutions for the company
in a specific circumstance.
6. Theme structure
Theme: “BUILDING THE BUSINESS DEVELOPMENT STRATEGY OF
PETROLIMEX JOINT STOCK INSURANCE COMPANY (PJICO) FROM 2010

TO 2015”, apart from introduction and conclusion parts, is divided into three main
parts as follow:
- Part I: Reasoning basis for building strategy for Petrolimex Joint Stock
Insurance Company.
- Part II: Analyzing basis for building strategy for Petrolimex Joint Stock
Insurance Company.
- Part III: Choosing and organizing the implementation of development strategy
of Petrolimex Joint Stock Insurance Company.
7


PART I: THEORY BASIS OF STRATEGIC
CONSTRUCTION FOR ENTERPRISE

I./ STRATEGIC ADMINISTRATION
1. Definition on strategic administration
Strategic administration is an issue paid attention to by many economists as well as
administrators. Because the content of strategic administration is very wide on
research range and rich in actual application; at each sight angle, people present
different point of view and definition on strategic administration. Although each
point of view is not completely adequate and comprehensive, on overall these
points of view have had big contribution to cognizing and carryng out the
administrative mission in enterprises. The followings are some definitions on
strategic administration.
- Strategic administration is the collection of administrative decisions and actions
deciding the long success of the enterprise.
- Strategic administration is the collection of decisions and action measures leading
to the planning and implementation of strategies in order to reach the target of the
organization.
- Strategic administration is process of researching current environments as well as

future environments, forming targets of the organization; formulate to implement
and check the decision implementation aiming at reach the target in current
environments as well as future environments.
Finally we would like to introduce a definition on strategic administration widely
used in intensive training courses on business administration in England, United
States…and accepted by many economists.
- Strategic administration is the art and science of the construction, implementation
and evaluation on synthetic decision, helping each organization can reach its target.
According to this definition way, strategic administration pays attention to
coordinating

fields

of

administration,

marketing,

finance/accounting,

products/operation, research and development as well as information system in
order to reach the success for the enterprise.
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2. The meaning of strategic administration
In fluctuation condition of business environment now, above all others, only one
thing that enterprises know surely is the change. Strategic administration process is
a trend to help these organizations overcome troubles in business world by their

own capacity and effort. This is the scientific research result basing on the trading
realtity of many companies. It is really a product of managerial science because if
oganizations establish good administration process, they will have a good support to
go on ahead. However, the level of success depends on the implementation capacity
mentioned in part of strategic application, showing the arts in administration.
Strategic administration process basing on the attitude which the company
continuosly investigates events happening inside and outside the company as well
as trends impacting strongly on the company has rapidly increased in these days. In
order to exist, all organizations force to have changeable and adaptable ability to the
fluctuations. Strategic administration process is stablished to help the company
concentrate on the best adaptation to changes in long term.
Strategic administration helps the organization to be more active instead of passive
in planning clearly their future; it allows the organization to pioneer and make the
influence on its activity environment (instead of reacting weakly). Therefore,
applying out of its ability to control and manage the enterprise; from chairman of
board of directors, general managers to board of manager of many trading
organizations or non-profit activities recover and cognize the strategic
administration. On history, basic meaning of strategic administration is helping
organizations make the better strategies via handling more suitably and methodly to
strategic choices. However, recent researches show that the contribution of strategic
administration to implementation process is much more important than the
contribution to making sinle decisions or documents.
Strategic administration creates for each person the very important cognitions. The
main target of this process is reaching the understanding and committing to
implement both in board of manager and labors. Thus, the most important benefit
from the strategic administration is the understanding and committing to implement.
Once people in the enterprise understand what ad why they have been doing, they
will feel that they are a part of the enterprise. They commit to support it themselves.
9

Labors and board of manager will become more active, they understand and support
works, the mission, targets and strategies of the enterprise; helping people to have
more strength and promote their own quality and ability, contribute to the
development of the enterprise.
Benefits from the strategic administration that we can see here an be divided into
two types: benefit can be counted to money and benefit can’t be couinted to money.
Benefit can be counted to money
The application of strategic administration made companies more successful and
have futher vision in future, which is foreseeing the trends; it also helps these
companies implement tarets in short term better. The achievement is figures about
revenues on profit, market share and increase level on the stock value of the
company on stock market.
Benefit can’t be couinted to money
The figures, achievements gained from finance are not the all results from applying
strategic administration effectively. The benefits gained are invisible benefits,
uncounted in money; but it is very important, having desisive characteristics for the
company such as the sensitiveness to changes of environment, the more
understanding on strategies of competitors, improving the capacity of labors,
reducing the shyness to changes, understanding more about carrying out the
treatment. Strategic administration makes the ability to prevent risks of enterprises
increase because it encourages the exchange among managers in every parts and
functional levels. The exchange helps people be aware of their right in developing
products and services, and acknowledge their contributios. The awareness of labors
in work will make the unexpected results, the labor capacity reaches to 200%
according to investigation data of Tom Peter.
Strategic administration makes the following benefits:
- Help identify and arrange the priority and make the best of opportunities.
- Bring out the facual outlook on difficulities of administrative mission.
- Bring out a draff for comprehensive development of actions and control.

- Minimize risks
- Help key decisions serve the proposal of targets better
- Help arrange better time and resources for defined chances better.
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- Allow to reduce necessary time and resource in order to amend mistakes and
temporary decisions.
- Make the frame for the relationship among individuals inside the company.
- Help coordinate single behaviors into a general effort
- Provide the basis for making clear the responsibilities of each individual
- Bring about the encouragement to advanced thoughts
- Bring about the cooperative, close-knit and fervent form in dealing with problems
as well as chances.
- Encourage the positive attitude to the change.
- Bring amout the discipline level and the formality to administrative mission in the
company.
3. Basically competitive strategies in each bisiness fields
Companies pursue the strategy at enterprise level in order to reach the competitive
advantage, allowing them to operate better than competitors and reach the higher
revenues than the average. They can choose from three basic strategies: leading on
expenditure, product differentiation and concentration.
Above strategies are basic strategies of all enterprises or all sectors. Each of three
basically competitive strategies is the result of consistent choices of the company on
products, market and individual ability- these choices consolidated each other.
Table 6.4 summerizes the suitable choice for each general strategy of the company.
Table 1: Origin of competitive advantage and basically competitive strategies
Leading
on expenditure

Product
differentiation

Concentration

Low
(mainly equal
to price)

High
(mainly equal
to unique)

Low to high
(price or unique)

Market
segment

Low
(mass production
market)

High
(many market
segments)

Low
(one or some
market segments)

Individual
ability

Manufacture and
material
management

Research and
development, sale
and marketing

Any individual
ability type

Product
differentiation

Strategic administration textbook – National Economics
University – Ass. Prof. Dr. Ngo Kim Thanh
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3.1. Leading strategy on expenditure
The purpose of the company in pursuing the leading on expenditure or low
expenditure strategy and better activity (having better advangtage) than competitors,
doing everything to manufacture commodity or services at lower expenditure than
competitors. This strategy has two basic advantages. Firstly, due to low
expenditure, the people leading on expenditure can put the lower price than their
competitors; they still get the profit equal to the competitors. If the companies reach

the same value for their products, leader on expenditure can get the higher profit
due to its lower expenditure. Secondly, if the competition in the same line of
business increases and companies start competing, leader on expenditure will have
ability to stand stably in competition better than other companies due to its lower
expenditure.
3.2. Differentiation strategy
The purpose of this differentiation strategy is reaching the competitive advantage by
making the products – commodity or services- acknowledged the best by the
consumers due to their remark. The ability of differentiation strategy to satisfy the
demand of customers according to the way that competitors can’t have, meaning
that it can reach the higher price – significant higher price compared with the
average level of the sector. The ability to increase the revenues by putting high
price (not by reducing the expenditure) allows differentiation product people to
operate better than competitors and get higher profit than the average level; and
customers pay that price because they believe in the product quality of
differentiation products equal to that price difference..
3.3. Centralization or concentration strategy
The third competitive strategy, concentration strategy, differs from two others
mainly because it trends to serve the demand of limited customer group or segment
market. The company pursueing the centralization strategy pays attention to serving
a specific market segment, that segment can be defined according to geography,
customer type, or a branch of product line.
Once choosing a market segment, the company can pursue the concentration
strategy or differentiation product or low expenditure. On the nature, the
concentrative company is a differentiation producer or attractor on specialization
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expenditure. Due to the small scale, some concentrative companies can pursue the
leading on expenditure and differentiation product. If concentrative companies use

the method of low expenditure, products have been in competition with leader on
expenditure in market segments which not having the expenditure advantage. If
concentrator pursues differentiation product method, all differentiation product
methods have been widely opened to concentrative companies.
Once more characteristic of concentrative companies is that they compete with
differentiation product people only in few market segments. Companies pursueing
concentration strategy surely develop the quality of differentiation product
successfully because they have knowledge on a small customer group or the region.
Moreover, concentrating on small production chain allows concentrator to make the
renovation quicker than big differentiation companies. Concentrative companies
pay attention to establishing the market share in a market stegment; and if it is
successful, they can start serving many market stegments and making the lost in
competitive advantage of differentiation people.
II./ STRATEGIC CONSTRCTION PROCESS
Figure 1: The procedure of strategy planning
THE PROCEDURE OF STRATEGY PLANNING

Define the function, task of enterprise and strategic target

Analyze macroscopic environment
(Internal environment, business environment)

Select strategy

Deploy the strategy

Check, evaluate the result and adjust

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1. Trading field definition
Trading field definition must answer the question: what is our line of business?
What would it be? What must it become?
The answes are diverse and different. Perhaps because enterprise only trades in one
field and they also participate in many fields. Single line of business enterprise only
operates in a major field, multi-sector enterprise trades in many fields at least two
business fields
2. Strategic target
According to the most general meaning, strategic target and vision shown in the
declaration of mission is the clear declaration on ambition that enterprises pursue.
Therefore, strategic target is the destination which enterprises hope to reach. It is
the purpose concretization of enterprises on the direction, scale, structure and
implementation progress under time. In the market economy, in general, enterprises
pursue three main purposes. They are existence, development and diversification.
3. Macroscopic environment analysis
3.1 Economic environment
The reality of the economy and trend in the future has influence on the success and
strategy of an enterprise. Main factors which enterprises often analyze are the
different growth speed of the economy, interest rate, exchange rates and inflation
rate. Different growth speed of the econmy in well-off, recession and recovery
phases will influence on the consumption. When the economy is at high growth
speed, it will make many chances for enterprises to widen their investment
activities. In contrast, when the economy is recession and decadence, it will lead to
the decline in consumption expenditure and simultaneously leads to the increase in
competitive force. Normally, the decadence in the economy causes the fight in price
in manufacture fields, especially in mature fields. The interest rate level will decide
the demand for products of enterprises. Currency policy and exchage rate may also
make some good chances for enterprise, but also be the risks for their development.
Inflation and inflation prevention issue are also an important factor which must be

considered and analyzed. In fact, if inflation rate is high, the control of price and
salary can’t be made. Inflation increases, investment project becomes risker,

14


enterprises will decrease the enthusiasm in investing in manufacture development.
Therefore, high inflation is the risk to enterprises.
3.2. Technological environment
This is the factor having big and direct influence on trading strategy of fields,
sectors as well as many enterprises. In fact, our world witnesses the technological
changes making the stagger, even causing the lost in many fields; simultaneously
also appear many new trading fields or more complete ones.
The changes of technology of course impact on the lifecycle of a product or a
service. A theorical cycle includes phases: beginning, development, mature and
fade-out. The reality to some enterprises and some products is that they will have a
new development period after fade-out period. Moreover, technological changes
also influence on manufacture methods, materials as well as behavior attitude of
labors.
From that requires strategists to pay attention to the change regularly and the
investments in technological advancement.
3.3. Social – cultural environment
Medium and long term strategic period, social – cultural environment can be the
biggest change factor. Lifestyles changing quickly themselves according to the
trend of importing new lifestyles are always the chance for many manufacturers.
Enterprise also takes into account the consumption behavior, the change of age
tower, birth and marriage rate, position and role of women at work and in the
family. The appearance of Association of consumers is the obstacle requiring the
attention of enterprises; especially the product quality must ensure the benefit of
consumers. A challenge to manufacturers is that the intellectual standard of the

people is higher and higher, more and more diverse.
3.4. Natural environment
Wise strategists often pay attention to the climate and ecological environment.
Sometimes, the risk of unpredicted changes on the climate is carefully considered
by enterprises having the manufacture and services relating to the crop.
3.5. Politics, law and government environment

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Factors of government, law and politics impact on enterprise according to different
directions. They can make the chance, obstacles even the real risk for the enterprise.
They often consist of:
- Government is the biggest consumer in the economy.
- The stability on politics and the consistence on big policy viewpoint are always
attractive investors. Law system established and completed will be the basis to trade
stably. For example, enionmental protection law is the issue that enterprise must
take into account.
- Decisions on advertisement to some trading enterprises will be the risk, for
example if they want to produce and supply high degree alcohol, tobacco…
- Decision on tax types and expenses can both make the chance and limit the
manufature development.
- The enterprise must take into aacount Labor Law and regulations on recruitment,
promotion, pension policy, unemployment compensation.
3.6. Global environment
Regionazation and globalization have been and will be an essential trend which
every enterprise, sector, government must be considered.
Nowaday, many strategists have called it the “Common House”. In this context the
international environment is a special case of genneral environment out side the
enterprise. Like the environments analysed above, the goals of analysis and

judgement are to show the opportunities and dangers. But the nature of
opportunities and threats in the international aspect for enterprises with more or less
distinct, if only considering the outside environment within a Vietnam country.
Indeed, the international environment will be more complex, more competitive
according to the viewpoits from diffirent social, cultural, intitutional construction,
policy and economic….
The Viet Nam’s official entrance into international organizations as ASEAN, WTO
has been created many opportunities for Vietnamese enterprise to investment,
market as well as there are many challeges that Vietnamese enterprises must
confront. Liberalization of regional trade, tariff barrier demlishment will be the big
threats for Vietnamese enterprises. Furthermore, ASEAN also put its self in the
relationship of global competitive world, such as the EU, NAFTA, Japan, China ...
16


Joining into World Trade Organization WTO, Vietnam will expand the export
market to many contries in the world, be enjoyed most favoured nation statute, not
to be discriminated in international trade. But on the contrary, the challeges in
international competitiveness will be more dractic.
3.7. Analysis of environmental sectors
A narrow productive sector or a technical economic sector includes many
enterprises can offer the same or similar products and services can replace for each
other. Mission of strategists is to analyze and predict the competitive influences in
the environmental sector to determine opportunities and threats for their enterprises.
- Analysis of exsiting competitor: Competion beweent enterprises in a productive
industry offten include the main contents as: competitive structure of industry, in
sector, actual demand of sector and exit barries.
Competitive industry structure in data and distribution capacity of enterprise’s
product in production. Diffirent competitive structions have the diffirent
applucations for competition. Competitive struction changes from the hoard

productive sector to the concentrated productive sector.
Demand situation of a sector is another decisive sector for vehement
competitiveness of internal sector. Usually, high demand creates big opportunity for
enterprises to expand their activity, on the contrary, low demand leads to violent
competitiveness to enterprises maintain their controlled markets. Danger to lose the
market is unvoidable for enterprises without competitive ability.
Withdrawal barrier is a danger of serious competition when sector’s demand is
decreased

heavily. Barrier of economic withdrawal is strategy and sentitive

relationship beweent strong enterprises. If an withdrawal barrier is high, enterprises
can be locked tightly in the unfavorable industry.
- Analysis of potential competition: The potential competitors are enterprises
currently not competing in the same industry: but be able to compete if they choose
and decide to join the industry. This is a threat to existing enterprises. Enterprise
currently trying to prevent potential competitors to join the industry because more
and more business in a competitive industry is fiercer than the market and profits
will be shared, the location of the business will change.

17


The level of advantages and disadvantages to enter the industry by potential
competitors mostly depends on the barriers to joining an industry.
- Analysis provider: The suppliers can be considered a pressure of threat when
they are able to increase in price of input or decrease in the quality of products and
services which they provide. Thereby, the profit-making capacity of enterprise is
decrease. On a certain aspect, the threats that creates some dependence for
enterprise.

- Customer analysis: This is the force generated bargaining ability of the buyer.
The buyer can be considered as a competitive threat when forced enterprise to sell
off or require high quality and better service. Contrast, the weak buyers will bring
an opportunity for enterprise to increase prices to earn more profits. Buyers include:
the final consumer, distributors (wholesale and retail) and the industrial buyers.
- Substitutes: Substitutes are another products can satisfy the needs of consumers.
Their basic characteristics have more advantages than normal products were
replaced in the individual characteristics. Threats require enterprise to have the
analysis, monitor frequently the progress of technical - technology, which is directly
related to technological innovation, product innovation. Moreover, the change of
market demand is also important factors creating these threats.
4. Technical strategy SWOT analysis
The strategic administration uses many tools, technologies to analyze strategies.
Topics using the analysis technique of strengths - weaknesses - opportunities and
threat (SWOT).
SWOT is the the collection of the first letter of the English words: Strengths Weaknesses, Opportunity and Threats. This is a very useful tool to help us
understand the problem or make the decision in the organization and management
as well as in business. Say in a illustration way, SWOT is theorical framework
based on the that we can review the strategic and determinate the position and
direction of a organization, a company, analyze the proposed business or any ideas
regarding the interests of enterprise. In fact, the application of SWOT build a
business plan, strategic planning, competition evaluation, market surveys, product
development and in research reports are choosen more and more

by many

enterprises.
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After analyzing the factors of macro environment and business environment,
companies determine the opportunities and risks from external environment,
strengths and weaknesses from the internal enterprise to based considerations and
building orientations and alternative strategies. Techniques are widely used
technical analysis of strengths - weaknesses - opportunities and risks (matrix SOT).
SWOT analysis provides useful information for connecting the resources and
capabilities of the company with the competitive environment that the company is
active. This is a tool in the formation and strategic selection. SWOT (also called
SWOT matrix) is a method of analysis of strengths, weaknesses, opportunities and
risks.
SWOT provides a tool for strategic analysis, review and evaluate the position and
orientation of a enterprise or a business project. SWOT is suitable with work and
analysis according to groups, is used in making business plan, bulding strategy,
evaluating competitors, marketing, product development and services.
SWOT analysis is the assessment of data held in a SWOT order in logic model, to
be understood, to be presented, discussed and to be applied it. Four-dimensional
evaluation of the SWOT is to extend the two-dimensional "strengths" and
"weaknesses". SWOT analysis can be used for any type of decision making and
pattern SWOT allow thinking positively, beyond the framework of habit and
instinct. When the SWOT analysis, the first thing is to identify a subject to analysis
clearly. Only then can expect other persons to contribute into the analysis process,
and those who see the results of the analysis can understand the purpose of analysis
methods, evaluation and relationship between SWOT elements. This method is
simple, easy to apply and can be used in many fields of business activities.
5. Selecton of enterprise’ s business strategy :
The implementation of analysis, selection and decisions a business strategy is
necessary to ensure a strategy has high feasible, which requires companies to build
many projects, to be put forward standards to make the basis for the selection of an
optimal strategy. If the choice is difficult, must be patient to find new opportunities,
should not desperate. Remember that political factors, culture of the organization

also affect the strategy selection.

19


Based on the principles and standards set out, the enterprise conduct to compare the
strategic plans that planned with the aim to find an appropriate business strategy to
implementation. Strategy was selected must be the optimal strategy or at least be
consistent with the conditions and circumstances of enterprise. To choose the
strategy is common to consider the following basis: The strength of industry and
enterprise; Strategic objectives of the enterprise; attitude of the Chief Executive;
Sources of financial ability and qualification of administrators; The reflection of the
concerned subjects and the time problem.
Strategic decisions are put into practice must be the optimal strategy or at least. It is
the best of the strategic plan that built. Want to select the best or most optimal
business strategy among strategies, people often use the method of score according
to standard..
When evaluating optional strategic, need to ensure some requirements as follows:
- Otional strategic must ensure compliance with environmental conditions.
- Otional strategic must be in accordance with foreign policy, viewpoits and
methods of the management board.
- Otional strategic must be consistent with the

financial material ability and

personnel of the enterprise.
Strategic selection is the final step of the strategic construction and also the initial
step for the strategic organization implementation. Construction and selection of
business strategies have put forward the necessary steps to have the feasible
business strategy. But let enterprise success in the business market, the selection of

an appropriate strategy has meaningful decision. With the selected strategy,
enterprises must implement the strategy effectively. This is an important period and
a metabolic step the desire business strategy into reality.
6. Organizations implement strategies
Organize the strategy implementation is often called the activity period of strategic
management. Organization of implemention means to mobilize the teams of
administrators and workers involved in the implementation of the strategic
objectives set out. Organizing the strategy implementation is often considered the
most difficult stage in the process of strategic management, strategy implementation
requires high discipline, dedication and sacrifice of each individual at enterprise.
20


The success of organization of strategy implementation focus on the ability to
motivate, promote people to participation in the process of strategy implementation.
Because the activities of strategy implementation are affecting all employees in the
enterprise. All departments and other sections must determine the tasks need to
carry out their part of the implementation process work the best.
7. Check, evaluate the implementation result and adjust
Check and evaluate the strategy is the final section of strategic administrative
process.
Check, evaluate and adjust having the purpose is defining the variation on target,
measure, method and deployment result of strategic contents of enterprises
compared with initial estimate in order to establish the current condition, define
reasons and estimate measures to adjust the strategy.
Check and evaluate the strategy covering all sections and activities of strategic
administration, from planning the target, building the method to organizing to carry
out the strategy.
Requirements to the mission of checking and evaluating the strategy:
+ Carry out suitably to different periods of the strategy

+ Ensure flexibility
+ Ensure the provision
+ Concentrate on key and important points and contents
Check and evaluation standards:
+ Qualitative standards: are standards which can’t measure by physical measure,
currency. Qualitative standards must ensure the consistence, suitability and
feasibility
+ Quantitative standards: are standards which can quantify, measure, compare and
analyze
+ Other standards: politic trend and the pressure of parties make the difference on
strategic result compared with the estimate.

21


PART II: ANALYSING BASIS FOR BUILDING STRATEGY
FOR PETROLIMEX JOINT STOCK INSURANCE
COMPANY (PJICO)
1. Introducing Petrolimex Joint Stock Insurance Company (PJICO)
1.1. Company history.
PETROLIMEX Joint Stock Insurance Company (PJICO) is the first insurance joint
stock company being established in Vietnam by big economic groups such as Petrol
Vietnam, Vietcombank, Vietnam Steel Corporation, Vietnam National Re-insurance
Company, Synchronous Materials and Equipment Company, Hanoi Electronics
Company, Vietnam Railway Union, AT Safety Company. On June 21 st, 1995,
PJICO was officially established in the warm welcome of domestic and foreign
customers. With the function of dealing with non-life insurance products, initially,
PJICO Company only had 35 officers, after 14 years of establishment and
development, at present, PJICO develops throughout the country with 51 branches,
1.250 young, active staff and 4.500 professional agents presenting in the whole

provinces and cities of the country, and is one of the four leading non-life insurance
companies in Vietnam non-life insurance market.
However, standing in front of the world integration, product, service business is not
completely decided by the company but sometimes by changes of the market. Thus,
to avoid risk in business production, the Company is compulsory to build strategy
to develop strongly in the common tendency, have an own development strategy in
conformability to the socio-economic situation of Vietnam in particular and
countries in the world in general.
1.2. Business fields of the company
Right after being established, PJICO quickly got access to the market and
implemented more than 80 insurance products and at present, is occupying the
market in fields such as: Transportation, work construction and installation, petrol
and oil, export and import goods and mechanical vehicle insurance, etc. In which,

22


we must cover some products which are strong points, standing at the leading TOP
in Vietnam’s insurance market such as:
• Maritime Insurance profession:
- Insurance for goods which are transported by sea, land, river, air.
- Insurance for ship body
- Insurance for civil liability of the ship owner
- Insurance for ship building contractor
- Insurance for river, fish ship
• Non-maritime insurance profession:
- Insurance for mechanical vehicle
- Human combined insurance
- Insurance for teachers, students
- Insurance for labor compensation

- Insurance for tourists
- Insurance for passengers
• Technique and asset insurance profession:
- Insurance for every risk in construction, installation
- Insurance for fire and special risks
- Insurance for every industrial risk
- Machine insurance
- Liable insurance
- Joint insurance for leased assets
• Re-insurance profession:
-

Selling and receiving re-insurance for insurance professions

• Other activities:
- Implementing professions related to insurance: appraising, investigating,
calculating and allocating loss, agents appraising, dealing with compensation and
asking for the third person
- Cooperating to invest, joint credit venture to domestic and foreign customers.

23


1.3. Business operation result of the company (2007 – 2009)
Table 2: Business production situation of the company. Unit: Billion VND
Target
Revenue
Cost
Profit

2007
1040
910
50

2008
1308
1247
60,5

2009
1555
1493
62

Figure 2: Business operation activity of the company (2007 – 2009)

Source: Petrolimex insurance company (Pico)

BUSINESS RESULT IN 2007 OF PJICO
a/ General business result of the whole company
Figure 3: business production result of the company in 2007:
Target

1.Total business income
Including
original
insurance cost
2.Total
spending

Including

Impleme

Plan

Implemen

Implement

Implement

ntation

2007

tation

ation rate

ation rate

2006

(billion

2007

2007/TH

2007/KH

(billion d)
1.040
880

2006 (%)
125%
131%

2007 (%)
110%
110%

(billion d)
831,37
670

d)
950
800

business

800,47

910

113%

original

323,6

352

109%

24


compensation
3.Profit before tax
4. Average income of

30,9
3,6

labor (million d/month)
5.
Total
profession

353

45

50.000
5,0

162%

111%

450

sparing

Notes:
- Data in 2006 are drawn the balance sheet and audited
- Data in 2007 are quickly collected on January 15th, 2007.
b/ Original insurance business of each unit
Result of revenue, plan completion rate, implementation rate compared with 2006
and specific compensation rate of each unit according to following table:
Table 4: Original insurance business result of each unit in 2007
COMPARE
No.

UNIT NAME

PLAN 2007

IMPLEMENTATI
ON

COMPARED

D WITH

COMPE

WITH PLAN

IMPLEMEN

NSATION

2007

TATION

RATE

2006

GROUP 1: over 20 billion d
Company
1 office

189.000.000

189.447.000

100%

117%

40%

2 Sai Gon

70.000.000

62.315.000

89%

107%

20%

3 Hai Phong

58.000.000

61.628.000

106%

127%

42%

4 Ben Thanh

45.000.000

45.479.000

101%

139%

30%

5 Ninh

32.000.000

31.273.000

98%

117%

50%

6 Da Nang

28.000.000

25.760.000

92%

110%

94%

7 Gia Dinh

25.000.000

15.162.000

61%

81%

27%

8 Dong Nai

22.000.000

30.330.000

138%

210%

27%

Quang

GROUP 2: over 10 to 20 billion d
9 Can Tho

20.000.000

29.886.000

149%

143%

21%

10 Dac Lac

18.000.000

22.298.000

124%

166%

15%

11 Nghe An

17.000.000

17.006.000

100%

128%

49%

12 Duong

15.000.000

20.465.000

136%

165%

27%

13 Gia lai

13.000.000

13.662.000

105%

129%

31%

Binh

25