Building business strategy in vietnam – italy steel joint stock company in period of 2015 2020

MBA THESIS
BUILDING BUSINESS STRATEGY IN VIETNAM – ITALY STEEL JOINT
STOCK COMPANY IN PERIOD OF 2015 – 2020

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TABLE OF CONTENTS

LIST OF TABLES

LIST OF FIGURES

LIST OF CHARTS, DIAGRAMS

INTRODUCTION
1. Preface
Over the past years, Vietnam economy always reached the high and stable
growth rate. After Vietnam joined the World Trade Organization, Vietnamese
enterprises have had opportunities to expand market, production scale and mark
their position. Apart from opportunities, they also face many threats. Market
fluctuations are quicker and more complicated and sale becomes more difficult. The
reason for this condition is that enterprises are supplying more and diversified
goods for market. Correspondingly, market requires products with higher and higher
quality. As a result, the competition to have customers is more and more violent.
Therefore, if enterprises want to have success in business, they are required to
process new trading methods and new thinking.

Besides, they also must use

supporting means to grasp and process information flexibly, apply scientific

technology as well as propose suitable projects for each period. If applicable,
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enterprises will take advantages in competition. Enterprises also must understand
the rules of market to be able to produce and sell more products, have quick capital
turnover. Besides, production reinvestment helps enterprises expand size widely and
deeply. In which, analyzing business environment and defining target market and
building business strategy are matters of concern since they are core issues and
control all of activities in enterprises. Additionally, these issues are foundation for
business administrators to make useful decisions with higher and higher economic
efficiency as well as sustainable development. In other words, strategy for trading
and production is vital to enterprises.
Together with the growth of national economy as well as Song Da
Corporation, Vietnam – Italy Steel Joint Stock Company (VISCO) has gained
achievements and had significant contribution to Song Da Corporation in the past
and Song Da Group at present in new level.
Nevertheless, during the process of deep integration to the regional and
world economy, business environment will change much with quick speed. If basing
on advantages and production – trading experience in the past, VISCO will not
survive and develop. With the desire to have contribution in finding out orientation
to maintain and enhance position of VISCO in the future; Based on gained
knowledge from Global Advanced Master of Business Administration Program and
working process in VISCO, our group selects the topic in line with the theme
“Building business strategy in Vietnam – Italy Steel Joint Stock Company in
period of 2015 - 2020”.
2. Object and target of the study:
Based on the analysis of microenvironment, macro environment and
production and trading activities in VISCO, the group will find out suitable business
strategy to develop market and enhance competitiveness of products in market.

From that, VISCO will remain their position and ceaselessly develop to become
leading steel production company in Vietnam as well as in the region in the future.
3. Scope of the study:
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- Studying space: Vietnam – Italy Steel Joint Stock Company and steel
construction market in Vietnam.
- Studying time: This project focuses on researching production and
trading of Vietnam – Italy Steel Joint Stock Company within 4 past years (from
2007 to 2010).
4. Methodology of the study:
We mainly use the statistics, survey, methods to collect data, generalization
and analysis.
5. Source of data:
- Data of Vietnam – Italy Steel Joint Stock Company
- Data of Vietnam Steel Association
6. Implication:

- In theoretical aspect: applying theories of building business strategy and
competition theory for specific product in enterprises.
- In real aspect: being foundation to develop business, enhance
competitiveness of VIS product.
- This topic can be used as reference for building business strategy of other
industrial – commercial enterprises in the same sector.
7. Limitation:
The topic only focuses on VIS product and scope in Vietnam – Italy Steel
Joint Stock Company.
8. Expected result:
- This project will evaluate strengths, weaknesses of Vietnam – Italy Steel

Joint Stock Company as well as VIS product of the company. It also evaluates
business environment of steel products including competitiveness.
- This capstone project will build business strategy for VIS product in
Vietnam – Italy Steel Joint Stock Company in period of 2010 – 2015.
9. Structure of capstone project:
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Apart from the introduction, conclusion and references, the main content of
the capstone project consists of three chapters:
Chapter 1: Theoretical base of building business strategy of enterprise
Chapter 2: Trading and production activity and business strategy of Vietnam
– Italy Steel Joint Stock Company.
Chapter 3: Business strategy of Vietnam – Italy Steel Joint Stock Company in
period of 2011 - 2015.

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CHAPTER I
THEORETICAL BASE OF BUILDING
BUSINESS STRATEGY OF ENTERPRISE
1.1. Concept and process of building business strategy
1.1.1. Concept about business strategy of enterprise
The concept of “strategy” has been presented for a long time and it
originated from military field. At present, there are many concepts about strategy:
According to Pred R. David: “Strategy contains means reach to long-term goals”.
According to Haroid Kooniz and authors of the book “The main issues in
management”, strategy is defined as an action program reaching specific objectives.
Main strategies of an organization contain goals and commitments in resources to

reach these goals as well as main based policies when using resources.
According to Alfred Chandler: “Business strategy covers definition of long
term basic target of enterprise, selection of method or action program and allocation
of resources to implement that target”.
In general, if an enterprise wants to exist and develop, they have to pay
attention to not only short term and mediate operation project but also activities
in many incoming years as long term operation project. Furthermore, enterprises
need to understand and mitigate influences from external environment, promote
strengths, overcome weaknesses and catch up with opportunities to take
advantages. Such long term thinking is called as strategic thinking. Strategy is a
plan orienting for future, is the spine for administrators to make decisions. In
which, business strategy imagines and describes activities of enterprises as well
as maps out positive prospect for them. Strategy contains targets, policies and a
variety of actions. Strategy solves unprecedented and unknown problems.
In the market economy, the existence of each enterprise is connected with
many targets to implement mission and mark position in market. In a nut shell, it
orients to following basic three targets:
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- Earnings target
- Position and strength target in market
- Safety target
In order to well implement three above targets, enterprises are required to
build and conduct business strategy suitably. Business strategy of enterprises has
three levels regarding as corporate level strategy, business unit level strategy and
functional level strategy
- Corporate level strategy is comprehensive goals of enterprise in all aspects
to ensure success in different sectors and areas.
- Business unit level strategy is the ones ensuring success for the enterprise (or

branch) which that enterprise (or branch) only specializes on one sector or one area.
- Functional level strategy: is the one defining each operation area. Function
level strategies have functions as solution strategies to implement comprehensively
strategic target of enterprises.
1.1.2. Typical features of business strategy
Business strategy defines goals and orientation of enterprise in relatively
long term from 3 to 5 years.
Business strategy only drafts long term orientation, in practice; enterprises
have to combine strategic goals with situation goals.
Every important decision in process of building, making decision, and
organizing, monitoring, evaluating and adjusting strategy is concentrated by the
most senior leaders of enterprise.
Business strategy is always built, selected and enforced based on
comparable advantages of enterprise. This requires enterprise to have accurate
evaluation about their trading and production reality before building strategy
Business strategy is introduced mainly and firstly for business sectors
regarding as specialized, traditional and strong business sectors of enterprises. As a
result, enterprises have to build business strategy with thorough preparation.
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1.1.3. The role of business strategy
Business strategy is the foundation to determine specific production and trading
criteria and measure trading result. In general, strategy includes three factor groups:
- Factor group relates to business environment of enterprise
- Factor group relates to reality and solutions of enterprise
- Factor group relates to activities of Administration apparatus of enterprise.
We can say that, business strategy has particularly important role. It decides
failure and success of enterprises such as:
- It helps administrators have a long term view

- It is foundation for administrators to make accurate and in time decisions
- It helps enterprises make use of available strengths, opportunities in the
future to face up with, mitigate threats, recover weaknesses, maintain and enhance
position of enterprises.

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1.2. Process of building business strategy

Defining vision
and mission for
organization

Analyzing
external
environment

Analyzing
internal
environment

Defining strategic
goals

Planning and
allocating
resources

Forming strategy:

- Corporate level
strategy
- Business level
strategy
- Functional level
strategy
- International
business
Taking strategy
into effect and
reaching
integration

Organization
structure

Diagram 1.1: Process of building business strategy

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1.2.1. Step 1: Planning strategy, defining mission and orientated goals
of enterprise
- Planning strategy: is the cooperation and mutual support between strategists
with participants in implementing strategy to:
+ Participants in strategy planning will understand more clearly about
possibilities of built strategies with easy and simple implementation
+ Strategy implementers will understand more clearly about strategy when
conducting strategy
+ Enhancing feasibility of introduced strategies

- Defining mission of enterprise: Mission is understood as the existence
reason, meaning of foundation and existence of enterprise. Mission of enterprise is
their declaration with respect to society. Normally, mission includes contents as
customers, products or services, market, technology, philosophy, interest to
community and officials. Furthermore, mission demonstrates general prospect in the
future of enterprise. Mission is important base for selecting goals and development
strategy for enterprises.
- Defining goals of enterprise: goal is the concretizing of content, as the
mean to implement declaration about mission of enterprise.
1.2.2. Step 2: Analyzing environment
Business environment of enterprise includes internal and external
environment with direct or indirect influences to the existence and development of
enterprise. Therefore, researching internal and external environment is imperative in
planning strategy of enterprise.
1.2.2.1. Analyzing internal environment
Internal environment of enterprise includes factors which enterprise can
control certainly as: management, production, finance, accounting, material
supplying, marketing, public relationship, human resource and information system.
Internal environment factor analysis will make enterprise define strengths, weaknesses
to introduce suitable strategy with implementation capacity in near future.
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Value chain – comprehensive strength
Firm infrastructure
Human resource management
Research and development
Supplying
Purchasing
material

Production

Distribution

Marketing

Customer
serves

Diagram 1.2: Michael E.Porter’s Chain value model
1.2.2.2. Analyzing external environment
1.2.2.2.1. Analyzing macro-environment
External environment factor analysis helps us recognize opportunities and
threats, from that, enterprises will introduce suitable strategies. External
environment factor analysis bases on environments relating to existence and
development of enterprise, regarding as:
- Economic factor: identifies trend of demand for consuming products and
supplying capacity of material, human resource for production and management. in
which, it mainly identifies economic growth rate as: gross domestic product, GDP
per capita, currency policy, tax interest of related products and services,
international economic integration policy, increase (decrease) of population.
Therefore, enterprises need to understand thoroughly and evaluate socio-economic
planning and development of Government and locals.
- Political and legal factor: Enterprises must understand political trend,
Domestic and foreign affair of Party and law of state which affect to development of
enterprises.
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- Technical and technological factor: There are more and more new
technologies creating opportunities as well as threats for enterprises. New
technology will help enterprises with lower price, more competitive as well as
reduce life cycle of products.
- Socio-cultural factor: consuming characteristic, customs, life style or
culture of each local and ethnic will affect demand and taste of consumers.
- Population factor: Population size, population increasing rate,
population structure also affect to enterprises in consuming demand and
supplying human resource.
1.2.2.2.2. Analyzing micro-environment
New entrants
Threats of new
entrants

Threats of market share
reduction as new entrants

Competitors

Bargaining power
of buyers

Buyers

Suppliers
Bargaining power
of suppliers

Competitiveness

\
Price squeeze of
suppliers

Threats of
substitue
products

Price squeeze of buyers

Substitute
products

Diagram 1.3: Michael E.Porter’s five force model
New entrants: when new entrants present in sector, they will reduce market
share and earnings of enterprise. To protect competitive advantage, enterprises have
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to increase penetration barriers as product diversification, making use of available
advantages in production scale, market share, geographic location and trade mark.
As a result, if competitors want to take part in sector, they have to have big initial
investment, slow capital recovery, reduce competitiveness.
- Substitute products: Quick development of scientific-technology is the
condition of appearance of substitute products. Substitute products will threaten
market share and control potential earnings for enterprises. Therefore, enterprises
have to ceaselessly apply scientific technology to improve labor productivity,
reduce cost price, and improve quality and features of products.
- Buyers: The reliability of buyers have important role for enterprises.
Nevertheless, when buyers have advantages, they will create pressure for enterprises.

- Suppliers: include units supplying input factors as material, machine, and
finance and labor source. When suppliers have advantages, they will cause
disadvantageous pressure on enterprises as high price with short payment time.
- Competitors: This is frequent pressure and has direct threats to enterprises,
when competitions among enterprises increase; it threatens position and existence
of enterprises.
According to Michael E. Porter, there are two basic competitive advantages
as: advantages about low cost and advantage about differentiation of products.
Resources
Advantage about
low cost

Special capacity

Or

Product’s value

Advantage about
differentiation of
products

Possibilities

Diagram 1.4: Competitive advantage model of Michael E. Porter
Enterprises use their resources (including: brand name, prestige, technology,
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customer data base, reputation) and capacity to use resources effectively to create

special capacity and improve value for products from competitive advantages on
low cost or differentiation of products.
1.2.3. Step 3: Defining long term target and building development strategy
for enterprise
- Long term target is expected result of enterprises given in relatively long term.
The time of implementing long term or strategy implementing lasts more than 2 years.
During the process of implementing strategy to obtain long term target, enterprises can
divide into many short term targets corresponding with each shorter period.
- Defining the main target is consideration process combining with forecast
on product demand as well as sold turnover, total cost and resources of enterprises.
Demand forecast helps enterprises determine the types of product and amount of
products and services which enterprises manufacture and provide in the future.
From demand forecast administrators can decide production scale or activities of
enterprises as foundation to project finance and human resource.
- There are many forecast methods. Normally, enterprises use line based
method to forecast demand of market in the future from data in the past.
- Besides, in forecast, we should pay attention to another issue as life cycle
of product. It is important factor needed considering carefully in forecasting
process, especially long term forecast.
- When target is built suitably, it will be both motivation and measurement of
strategy implementing process. Normally, targets have to ensure feasibility,
flexibility, specific, unification and possibly define specific time.
1.2.4 Step 4: Defining action plan and conducting solutions
This is a process establishing mechanism, introducing resource allocation
plan for enterprises to implement selected key strategic solutions. Basing on that, it
will make use of resources and competitive advantages of enterprises create
comprehensive strength for enterprises to gain achievements in trading.

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1.2.5. Step 5: Supervising and adjusting strategy
Since the quick changes of environment factors and forecast for the future
have difficulties in obtaining absolution. During process of implementation,
enterprises must continuously check, evaluate and adjust strategy to gain
determined targets.
1.3. Tools used for evaluating and selecting business strategy
To plan business strategy, enterprises can apply many different strategy
planning methods and tools. This capstone project only selects and uses some tools
mentioned below which we consider them possibly help for planning strategy in
Vietnam – Italy Steel Joint Stock Company
1.3.1. Internal – external factor evaluation matrix (IE)
External factor evaluation matrix (EFE)
External factor evaluation matrix is the tool assessing the main influences of
external environment factors to enterprises. External factor evaluation matrix is
implemented according to five steps:
Step 1: Listing main external factors which affect to activities of enterprises.
Step 2: Classifying the importance from 0,0 (indirect, least important) to 1,0
(direct, the most important) for each factor. This classification reveals the
corresponding importance of factors with respect to success in trading sectors of
enterprises.
Step 3: Classifying from 1(respond, less influence) to 4 (respond, positive
influences) for each factor. It shows the way which current strategies of enterprises
respond to these factors.
Step 4: Multiplying the importance of each factor with its corresponding
classifying score to define important score.
Step 5: Adding the important score of factors with respect to trading sector of
enterprise. The average score is 2,5. If total important score smaller than 2,5 we see
weak response capacity, bigger than 2,5 we see positive and good response of
enterprise.

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Strong points: it forms the general picture about external factors affecting to
competitiveness of enterprise.
Weak points: marking each factor as well as defining its importance has
subjectiveness.
Internal factor evaluation matrix (IFE):
Similar to steps and score for external factor evaluation matrix, internal
factor evaluation matrix is tool to assess strengths, weaknesses and importance of
available resources in enterprise.
Strong points: it forms the general picture about internal enterprise with
strengths, weaknesses which these factors have influences on competitive capacity
of enterprise.
Weak points: Similar to EFE matrix.
Internal – external factor evaluation matrix (IE):
Internal – External Matrix puts different SBU (Strategy Business Unit) of an
enterprise in to 1 table with 9 cells. This matrix is based on two main aspects:
- Total important score of IFE matrix is demonstrated in X axis
- Total important score of EFE matrix is demonstrated in Y axis
- Each SBU has to establish IFE and EFE matrix as well as IE matrix for the
enterprise
1.3.2. SWOT matrix (Strengths, Weaknesses, Opportunities, Threats):
- SWOT matrix assesses strengths, weaknesses, opportunities and threats.
Objective of researching environment is to consider threats, opportunities as well as
strengths and weaknesses which enterprise has been and will facing during the
process of their production and trading to make foundation for setting up strategies.
SWOT analysis technique is a tool for summarizing environment research result and
proposing strategy.
- Main opportunities: are factors which product among influences to

enterprise when it makes use of and probability enterprise has opportunities is big.
- Main threats: are factors which product among influences to enterprise
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when threats happen to enterprise and probability for threat reaches the
maximum value.
- Defining core strengths and weaknesses: process of evaluating and
analyzing for internal factor of enterprise can conclude many factors. The
importance as it can conclude core factors affecting to competitive advantage and
strategy enforcement of enterprise. Here, we need to consider factors with the
position of activities in system and compare with general standards of sectors and
other main competitors.
- Combining internal factors and external conditions: after defining basic
factors of external and internal condition, we must apply a procedure including
below steps to analyze and propose strategies:
Step 1: Listing main factors of internal and external condition to cells of
SWOT matrix.
Step 2: Making logical combination. Setting up S/O, S/T, W/O, W/T
combination strategies
+ S/O: Using strengths to make use of external opportunities the best
+ S/T: Using strengths to deal with external threats
+ W/O: Overcoming weaknesses to create favorable conditions for making
use of external opportunities and enterprise needs making use of which
opportunities to fulfill weaknesses at present
+ W/T: Recovering weaknesses to mitigate threats
Step 3: Combining among four factors S+W+O+T. this creates the resonance
among 4 factors to form strategies. From that, enterprise can use strengths to make
use of opportunities, fulfill weaknesses and mitigate threats.
Step 4: Summarizing and re-considering strategies. Classifying strategies and

coordinating strategies into supporting system.

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Opportunities
Opportunities

Diversion
Diversion
strategy
strategy

Growth
Growth strategy
strategy
WO strategy:
Recovering internal
weaknesses by making
use of advantages from
external opportunities

SO strategy:
Using internal force to
create advantages
before external
opportunities

Weaknesses
Weaknesses

Strengths
Strengths
WT strategy:
defense strategy is used
to mitigate internal
weaknesses & avoid
external threats

Defense
Defense strategy
strategy

ST strategy:
Using strengths of the
company to avoid or
mitigate influences of
external threats

Threats
Threats

Diversification
Diversification
strate
strate

Diagram 1.5: SWOT matrix
Strong points:
- Pointing out strengths, weaknesses of enterprise as well as defining

opportunities and threats from external environment.
- Proposing strategies by specific combination from strengths weaknesses,
opportunities and threats for enterprise to have solutions
Weak points: SWOT matrix introduces possibly feasible strategies; it does not
introduce the best option or strategy. Therefore, selection of strategy to develop
enterprise is not mentioned here.
1.3.3. Quantitative Strategic Planning Matrix (QSPM):
This analyzing technique will show the best alternative strategies objectively.
Quantitative Strategic Planning Matrix uses input factors from EFE and IEF
analysis, after that, it receives essential information to establish QSPM matrix from
SWOT matrix
In general, among tools planning strategy mentioned above, each one has
strong points and weak points. Therefore, when applying them in to reality, we have
to be flexibly select matching to specific situation and condition.
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CHAPTER 2
TRADING AND PRODUCTION ACTIVITY AND BUSINESS
STRATEGY OF VIETNAM – ITALY STEEL JOINT
STOCK COMPANY
2.1. Overview about Vietnam – Italy Steel Joint Stock Company
2.1.1. Foundation and development
On the basis of maintaining and developing the traditional specialty of Song
Da Corporation as the hydroelectric, industrial and civil projects in the whole
country, Song Da has been implementing the long-term policy as diversifying the
specialty, products, developing industrial manufacturing plants fast and finally
contributing Song Da Corporation into a powerful economic group.
Series of projects have been carried out, which are on industrial
manufacture, facility investment to strengthen executing capacity. In 2000,

Song Da 12 Company set up a project on constructing a high quality factory
laminating steel placed in Pho Noi A industrial zone. The productivity of the
factory was 250.000 tons/year.
The target is: Providing stably high quality steels to the projects which the
Corporation invests or is the contractor. The rest will be sold in the outside market
to enrich the steel products in Vietnam partly. This project will also help part of
employees of the Corporation and Company get the jobs.
Viet-Italia Steel Factory was established under the decision number
19/TCT-VPTH dated 02, January 2001 approved by the General Director of
Song Da Corporation.
The head office of the factory is located in Pho Noi A industrial zone – Yen
My district – Hung Yen province (next to the highway 5).
Observing the policy of the State about waiting in front for modern
technologies, especially in the field of heavy industry and high technology, the
Company just selects the facilities made from G& countries. After putting out to
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tenders, Danielli firm in Italia became the official tender for the whole designs and
technical equipments of the factory.
In January, 2003, the factory officially operated. The products of the factory
are the high quality steels from the wire rod steels D6, D8 to the deformed bar with
diameter from D10 to D40 under the standard of Vietnam (CII, CIII, and RB500W),
Japan (SD390, SD490, and SD295A), the US (Gr60), and Britain (BS)…
The manufacturing capacity of the factory: 1.000 tons of every kind per day
and 250.000 tons of products per year.
The factory has 420 employees and cadres who all are master and skillful
engineers, workers in regular training inside and outside the country. They are in
majors as mechanics, steel lamination, metallurgy, industrial automation,
electrification, economics, commerce, foreign trade, construction.

Viet-Italia Steel Factory is the member under directly Song Da 12 Company.
Its functions and duties are just purely manufacturing without concerning about
production effectiveness. All the stages like material transaction or selling price and
selling policy are decided and implemented by Song Da 12 Company.
In 2003, the factory produced about 100.000 tons of steels in all kinds, and
the result was loss of 23 billion VND.
Implementing the State’s policy on privatizing the State enterprises, in June,
2003, Song Da 12 Company carried out the essential steps to transferring the
factory to joint stock company, and in the end of February, 2005, all the procedures
were completed. The Viet-Italy Steel joint stock Company was issued the business
certificate and officially operated since February 20 th, 2005 according to the
Enterprise Law.
On 25/12/2006 the company was official posted up in the Ho Chi Minh stock
exchange floor with the code as VIS.
Product brand name which Vietnam – Italy Steel Joint Stock Company is
protected and using:
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Vietnam – Italy Steel
Figure 2.1: Logo of Vietnam – Italy Steel Joint Stock Company

Figure2.2. Big board of Vietnam – Italy Steel Joint Stock Company
2.1.2. Organization structure of Vietnam – Italy Steel Joint Stock Company
Board of Directors has 05 members and Inspection Unit has 03 members.
Governing machinery has General Director, 04 Vice-General Directors, and Chief
Accountant. The company has 07 functional departments, 01 Project management
unit, 01rolling mill, 01 electric mill, 01 coal gas station, 02 ( in Da Nang and tay
Bac) and one representative office in Hanoi.
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Diagram 2.1: Organization structure of Vietnam – Italy Steel Joint
Stock Company

Shareholders Meeting

Inspection Unit

Board of Directors

General Director

Organization and
Administration dept
Vice General
Director

Vice General
Director

Vice General
Director– Trading

Tech. & Equipment
Dept.
Material Im- Export
Dept
Financial &
Accounting Dept

Project
management
Unit
§a Nang Branch

Tay Bac Branch

Representative Off.
In Hanoi

Rolling - Mill

Sales Dept
Vice General
Director –
Administration

Electric - Mill
Investment &
Planning Dept
Coal Gas Station
Public Relations
Dept.

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2.1.3. The main trading sectors
VISCO manufactures and trades construction steel, imports material and

equipments for steel industry as well as trades freight transport.
2.1.4. Vision and mission
Vision
Perceiving experience and promoting traditional strength in 50 years of
Song Da Corporation, Vietnam – Italy Steel Joint Stock Company has had
significant contribution to modernization, industrialization, integration to
global economy of Vietnam in approximately past decade. Although the company
always has to face up with challenges incidents of inflation and global economic
recession, VISCO still asserts a strong internal force, a solid foundation, a right
direction to the general development of sector and the country.
In the roadmap of formation and development, we always have created and
oriented development with ambition to become a region and world-class steel producer
and trader. We are patient and consistent to overcome challenges of global economic
integration. Human and technology provide us with stability and growth. Solution and
commitment make our dream come true. Earnings bring true value for shareholders.
Mission
Our mission is to bring interest and true value for society.
Customers are all, interest of shareholders is always paid attention interest of
labor is particularly strong attached; contribute efficiency to the development of
sector and the country.
2.1.5 The situation of steel market:
According to Vietnam Steel Association, in 2008, Steel sector fell about
5% (global economic crisis, fluctuation in interest rate, foreign exchange rate), in
2009 raising 32% in comparison with 2008. This increase was resulted from
stimulus packages of Government as interest rate support, private engineering
enhancement, so on. In 2010, the sold amount fell 14% against 2008 (fluctuation
about interest rate, foreign exchange rate, price increase of input material). We
can see that, Vietnam Steel sector has tendency to increase without stability and
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been affected by the world micro and macro economy.
Chart 3.1: Growing rate of Vietnam Steel Industry

(Source: Vietnam Steel Association)
In Vietnam, there are 11 main steel suppliers with respectively market
share as: Vietnam Steel company (Pomina): 16,60%, Thai Nguyen Iron and Steel
Company (Tisco): 12,60%, Hoa Phat: 12,00%, Southern steel Company (VNS):
7,60%, Vietnam – Italy Steel Joint Stock Company: 5,4%, Vietnam – Korea Steel
Company

(VPS): 5,00%, Vietnam – Australia Joint Venture Company

(Vinaustel): 5,00%, Vietnam – Japan Steel Company (HPS): 2,30%, Vietnam –
Germany Steel Company (VGS): 1,50%, 27,00% is market share of national
small enterprises.
Chart 3.2: Market share of Vietnam Industry

(Source: Vietnam Steel Association)
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2.2. Analyzing business environment of Vietnam – Italy Steel Joint Stock
Company – External environment
2.2.1. Analyzing macro-environment of VISCO
2.2.1.1 Economic factor
+ Economic growth rate
Economic growth rate of Vietnam has been remarkable from 1998 with the
growth rate of GDP and GDP/ capita. This is a positive factor for enterprises in
Vietnam in general and Vietnam – Italy Steel Joint Stock Company in particular.

The growth rate of GDP is higher than the increase of population; therefore,
GDP/capital is raised.
Table 2.1 GDP growth rate of Vietnam in period of 1998-2010
Data about growth rate of GDP over years
Years

1998199920002001200220032004200520062007200820092010

Growth rate %

5,8 4,8 6,8 6,9 7,1 7,3 7,8 8,4 8,2 8,5 6,2 5,3 6,7
(Source: Asia Development Bank – ADB)

Table 2.2 GDP/capita of Vietnam in period of 1998-2010
Unit: USD/person/year
Data about GDP/capital over years
Years

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

GDP/capita 340 363 400 420 439 483 514 640 722 823 1.024 1.040 1.168

(Source: Asia Development Bank – ADB)

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