Building business strategy in real estate for company 59, the ministry of defense

ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------

NGUYỄN VĂN ANH

BUILDING BUSINESS STRATEGY IN REAL ESTATE
FOR COMPANY 59, THE MINISTRY OF DEFENCE
XÂY DỰNG CHIẾN LƯỢC KINH DOANH
BẤT ĐỘNG SẢN CÔNG TY 59, BỘ QUỐC PHÒNG

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2018


ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------

NGUYỄN VĂN ANH

BUILDING BUSINESS STRATEGY IN REAL ESTATE
FOR COMPANY 59, THE MINISTRY OF DEFENCE
XÂY DỰNG CHIẾN LƯỢC KINH DOANH
BẤT ĐỘNG SẢN CÔNG TY 59, BỘ QUỐC PHÒNG
Chuyên ngành: Quản trị kinh doanh
Mã số: 60 34 01 02
LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. TRẦN HUY PHƯƠNG

Hà Nội - 2018


COMMITMENT
The author undertakes that the results of the study in the dissertation are the
results of the author's own work primarily obtained during study and research and
not yet published in any other research by others.
Research results and other people's materials (quotations, tables, formulas,
graphs and other materials) used in this dissertation have been approved by the
authors and cited in detail.
I am fully responsible to the scientific council on thesis defence, Hanoi
School of Business and Management and the law for the above commitments.
Student

Nguyen Van Anh


ACKNOWLEDGEMENT
During my study and thesis writing process, I received valuable guidance
from lecturers at the Hanoi School of Business and Management – Vietnam
National University, Hanoi.
First of all, I would like to thank the leaders and lecturerer for their hard
work. I would like to thank for the heartedness of Ph.D. Tran Huy Phuong to
instruct me in the preparation of graduation thesis.
I also sincerely thank the staff of Company 59 to support, provide
information and facilitate me for completion of my research.
I give my thanks to my wife and two lovely children for their spiritual
support motivating me to complete the dissertation at the time of busy and pressure
from many factors.

With the supports from many sides, I also made great efforts to complete the
thesis in the best way but due to certain limitations on knowledge, time and
information, the work has certainly existed shortcomings. I hope to receive the
sympathy, contributions and supports of lecturers and readers to complete the topic.
Thanks and best regards.


TABLE OF CONTENTS

LIST OF TABLES ...................................................................................................... i
LIST OF FIGURES.................................................................................................... ii
INTRODUCTION .......................................................................................................1
2. Overview of the research status ..............................................................................2
3. Objectives of the research .......................................................................................4
3.1 General objectives .............................................................................................4
3.2 Specific objectives ............................................................................................4
4. Subjects of the research ...........................................................................................5
5. Scope of the reseach ................................................................................................5
6. Methods of the research ..........................................................................................5
CHAPTER 1: THEORETICAL BASIS OF BUSINESS STRATEGY IN REAL
ESTATE ......................................................................................................................7
1.1. The general theories of business strategy ............................................................7
1.1.1. Concept of strategy and business strategy ....................................................7
1.1.2. Characteristics of business strategy ..............................................................8
1.1.3. The role of business strategy .........................................................................9
1.1.4. The levels of strategy ....................................................................................9
1.2. The process of building business strategy of enterprises ...................................12
1.2.1. Identification of the mission, the current business objectives of the business .13
1.2.2. Assessment on the external environment of the business ...........................15
1.2.3. Analysis on the internal business environment ...........................................20

1.2.4. Development of strategic options ...............................................................23


1.2.5. Analysis and selection of strategy ...............................................................24
1.2.6. Strategy implementation .............................................................................25
1.3. The concept of real estate and property characteristics .....................................29
1.3.1. Real estate concept ......................................................................................29
1.3.2. Characteristics of real estate business .........................................................30
1.3.3. Impact of real estate business characteristics on building business strategy......30
CHAPTER 2. CURRENT SITUATION OF THE COMPANY'S REAL ESTATE
BUSINESS STRATEGY AT COMPANY 59 OF MINISTRY OF DEFENSE ...........32
2.1. About the Company 59 of Ministry of Defense .................................................32
2.1.1. Introduction of Company 59 of Ministry of Defense .................................32
2.1.2. Organizational structure of company 59, Ministry of Defense...................34
2.1.3. Functions and missions of the Company 59 under Ministry of Defense ....35
2.1.4. Objectives and core values of the company 59 under Ministry of Defense36
2.1.5. Business results of the company 59 under Ministry of Defense .................36
2,2. Analysis of the external business environment of company 59, Ministry of
Defense ......................................................................................................................37
2.2.1. Macro-environmental analysis ....................................................................37
2.2.2. Micro-environment analysis (sectoral environment) ..................................47
2.2.3. Identification of opportunities - challenges ................................................55
2.3. Analysis of internal environment of company 59, Ministry of Defense............56
2.3.1. Human resources of company 59 ................................................................56
2.3.2. Physical resources .......................................................................................59
2.3.3. Other intangible resources...........................................................................62
2.3.4. Determining of strengths and weaknesses ..................................................64


CHAPTER 3. BUILDING BUSINESS STRATEGY IN REAL ESTATE FOR

COMPANY 59, THE MINISTRY OF DEFENSE AT THE STAGE OF 2018-2022
AND RECOMMENDATIONS. ...............................................................................65
3.1. Defining of the mission, goals, vision of the business .......................................65
3.2. Development of strategic options ......................................................................65
3.3. Analysis and selection of strategic options ........................................................67
3.4. Recommendations of implementation of the strategy........................................71
3.4.1. Marketing mix solution ...............................................................................72
3.4.2. Human resource solutions ...........................................................................74
3.4.3. Solutions on raw materials ..........................................................................75
3.4.4. Financial solution ........................................................................................75
3.5. Some recommendations to the management level .............................................76
CONCLUSION .........................................................................................................78
REFERENCES ..........................................................................................................79


LIST OF TABLES

Table 1.1. SWOT matrix - Strengths - Weaknesses - Opportunities - Risks ............24
Table 1.2. Quantitative Strategic Planning Matrix - QSPM .....................................25
Table 1.3. Matrix of Strategic Business Review .......................................................28
Table 2.1. Major business lines of the company 59 ..................................................32
Table 2.2. List of typical works have been implemented .........................................34
Table 2.3. List of capacity of technical workers .......................................................35
Table 2.4. Summary of financial data .......................................................................36
Table 2.6. Comparison table between units ..............................................................53
Table 2.7. Comparision of revenue between company 59 and CC1 .........................54
Table 2.8. Opportunities and challenges ...................................................................55
Table 2.9. Statistics of the land fund allocated for management use ........................60
Table 2.10. Strengths and weaknesses ......................................................................64
Table 3.1. SWOT matrix proposed business strategy for Company 59....................65

Table 3.2. Matrix quantitative strategic planning .....................................................68

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LIST OF FIGURES
Figure 1.1. The process of building business strategy of enterprises .......................13
Figure 1.2. Model of external environment analysis (business environment) ..........15
Figure 1.3. PESTEL model of macro environment analysis ....................................16
Figure 1.4. Model 5 Competitive Force M. Porter....................................................18
Figure: 1.5. Business Strategy Evaluation Matrix ....................................................27
Figure 2.1. Organization chart 59 .............................................................................34
Figure 2.2. Vietnam's GDP over the years ................................................................37
Figure 2.3. Total state budget revenue 2017 .............................................................38
Figure 2.4. Total budget of 2017 ...............................................................................38
Figure 2.5. CPI Index 2017 .......................................................................................39
Figure 2.6. Speed of urbanization in Vietnam ..........................................................41
Figure 2.7. Real estate market in Vietnam 2016 .......................................................41
Figure 2.8. Survey the sales team through survey questionnaire form 1 ..................57
Figure 2.9. Survey the sales team through survey questionnaire form 2 ..................57
Figure 2.10. Survey qualifaction of management and leadership through survey
questionnaire form 1 .................................................................................................58
Figure 2.11. Survey of technological capacity in group 1 ........................................59

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INTRODUCTION
1. Overview
Vietnam's economy has developed with high growth rate strongly and

sustainably. A series of outstanding events taking place in the world and in
domestic strongly impact on our economy as Vietnam joined the WTO in late
December 2006 to be in tune with the world and take many advantages, which have
made Vietnam become an attractive investment destination in the region for
domestic and foreign investors. Or the fact that Vietnam has been voted by nonpermanent members of the United Nations has shown the trust of its friends in the
world with Vietnam, its belief in Vietnam's economy and the political stability of
our country. And in the most recent, Vietnam became an official member of the
Trans-Pacific Partnership Agreement - TPP in February 2016.
With the potential economy, there has already been many real estate
investment projects in Vietnam. The types of investment are very diverse such as
high-end apartment buildings, office buildings for rent, shopping centers, etc.,
creating a tremendous impetus for social and economic development and changing
the face of urban in Vietnam.
However, real estate has been a very specific business area that requires
special conditions such as strong financial resources, ability to raise capital, good
relationships with specialized regulatory authorities, orientation as well as longterm vision of business leaders. In addition, the real estate business is cyclical, thus
the risk is very large so in the recent years, a series of businesses operating in this
field went bankrupt owing to bank debt, lack of capital, no output and others.
Company 59 of the Ministry of Defense is a state-owned enterprise under the
Ministry of General Staff has many years of implementation and trading real estate
projects. Like other real estate businesses, the company is facing many challenges
that affect the company's business. The real estate sector is the spearhead and
dominates almost all activities of other fields such as construction consultancy,
construction and installation and others. Therefore, the difficulty of this scetor shall
pull a series of other business areas of the affected company. The management of

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the company has assessed and seen the demand for housing, buildings, offices and

types of vacation resort is still high, especially in developed cities such as Hanoi,
Da Nang, Ho Chi Minh City and new urban areas such as Phu Quoc, Nha Trang and
others also urgently review their internal capabilities to build a complete real estate
business strategy - in line with the current situation. Starting from that demand, the
research topic: “Building business strategy in real estate for Company 59, the
Ministry of Defense” is very necessary for the development of the company.
2. Overview of the research status
Real estate business has only grown since the early 1990s, but the business is
now an important economic sector in the country. Because real estate business is
directly related to a tremendous amount of assets in terms of scale, nature and value
of the aspects of the national economy. Real estate shares account for about 40% of
the country's wealth, while real estate-related activities account for 30% of total
economic activity. In developed countries, the amount of money that a bank lends
through mortgages through real estate accounts for over 80% of the total loan
portfolio. Therefore, real estate investment and development plays an important role
in transforming assets into abundant financial sources for socio-economic
development, especially development investment. the infrastructure of the economy.
Due to the above reasons, many researches related to this field have been published.
Below, I would like to mention some case studies:
 Competitive environment of real estate sector - strategy of Binh Chanh
Construction Investment Shareholding (BCCI) for the period of 2010 2015; Author’s group of the University of Economics Ho Chi Minh City
(2010).
In this study, the authors focus on the real estate market in Vietnam when
Vietnam becomes an official member of the World Trade Organization. The real
estate market gradually followed the trajectory, the real estate market of Vietnam
from the non-ranked transparency index has risen in the top of the transparent
market. Commitment to WTO accession has helped real estate developers such as
Savills, Collier, CBRE and others develop. In addition, the author analyzes

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competency and, more importantly, analyzes the SWOT matrices of Binh Chanh
Construction Investment Shareholding to point out strengths, weaknesses, risks and
external challenge. This will help the company to discover and gain a competitive
edge in the real estate market. However, the authors have not evaluated the
construction of real estate business strategies in the company so the solutions that
the authors have not put into practice the situation of the company.
 Preparation of a real estate investment strategy at Vinapol Joint Stock
Company; Cao Xuan Cuong (2010)
In the implementation of the research, the author has achieved the following
objectives: systematizing the theoretical basis of real estate investment strategy and
assessing the current ability of the business, explore the investment opportunities on
real estate market and conduct analysis of the opportunities for challenge. Based on
the theory of the author applied the strategy of real estate investment of Vinapol
Joint Stock Company in the next 10 years. The author then proposed to develop
solutions to effectively implement the established strategies. In addition to the
above mentioned objectives, the research still has limitations, including the author
has not conducted external matrix analysis and internal matrix analysis, so the
opportunities and challenges as well as strengths and weaknesses that the author
analyzes in the SWOT matrix is sketchy and undetailed.
 Real estate business in Vietnam, current situation and solutions; Nguyen
Manh Hung (2013)
In his study, the author mentions the following main contents such as general
information on real estate and real estate business, rules of real estate market,
relationship of real estate business with real estate other business, experience in real
estate business in a number of countries in the world from which to draw lessons for
Vietnam. At the end of the study, the author proposed solutions to promote real
estate business. However, due to the author's research on the macro level, the author
has not built a real estate business development strategy based on the strengths,

weaknesses, opportunities and challenges of each application. The author of this
book is just learning about the experience of countries in the world to apply and
business strategy in Vietnam.

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 Establishment of a strategy for the development of the Company 59 of
Ministry of Defense by 2015; Ngo Vinh Tu (2007), master thesis,
University of Economics Ho Chi Minh City.
In this essay, the author has codified the rationale for business strategy in
general and has come up with strategies:
• Strategy to maintain and increase market share
• Marketing strategy
• Strategy for enhancement of competitiveness
• Strategy for development of new product
In this study, the author focuses on developing a joint development strategy
for the Company 59 of Ministry of Defense, not to delve into the real estate
business strategy. In addition, the 2007 context when research is outdated and needs
more adjustment to suit the current context.
Accordingly, after studying the previous works, the author will synthesize
the success of the works that continue to study the “gaps” to complete the subject in
his research.
3. Objectives of the research
3.1 General objectives
Set up a real estate business development strategy at the Company 59 of
Ministry of Defense for the five years from 2018 to 2022.
3.2 Specific objectives
(1) Systematize the theoretical basis for strategy and strategy development.
The concept of real estate business strategies, factors influencing the construction

business strategies of real estate
(2) Analyze internal and external factors affecting the real estate business of
the Company 59 of Ministry of Defense.
(3) Make proposal of strategy for real estate business development at
Company 59 of Ministry of Defense and propose several conditions to implement
the strategy.

4


4. Subjects of the research
Business strategy in real estate for Company 59, the Ministry of Defense
5. Scope of the reseach
For space: The study was conducted at the Company of Ministry of Defense
For time: Data was collected over the last five years (2014, 2015, 2016,
2017); The given strategy is valid until 2022
Focus on real estate business strategy. Real estate business activities are
understood to include the activities of buying and selling land and assets on land,
investment activities for lease, basic construction activities.
6. Methods of the research
Use the case study method at the Company 59 of Ministry of Defense; thesis
mostly uses qualitative methods. In addition, use the method of comparison and
synthesis.
Data collected includes:
 Secondary data collection: collect from books, newspapers, magazines,
statistical reports of the industry. Books on strategic management. This is the
basis for the author to build the theoretical framework in Chapter 1. Data
from the company, from departments and reports on the performance of the
Company 59 under Ministry of Defense and others.
 Primary data collection: The author combines a variety of methods including

in-depth interviews with experts and sociological survey methods.
In-depth interview methodology: Expert method is used to interview
experienced professionals in the field of real estate and management of Company
59 - Ministry of Defense. The purpose of the expert interview is to get expert
opinion on the real estate business environment today: the internal environment, the
external environment, the competition and others. In addition, the interview with the
management of Company 59 - Ministry of Defense to see the real status of the
whole picture of the company's activities in the field of real estate. In addition,
specialists in strategic management are instructors, strategic consultants and others.

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Sociological survey method (questionnaire) with experts and board of
company, customers. The number of votes is 100, the number of votes is 87 votes.
Questionnaires were divided into 2 groups:
 Group 1: Company leaders and experts: 33 questionaire forms.
 Group 2: Corporate customers: 54 questionaire forms.
7. Thesis structure
The thesis is structured into three chapters, namely:
INTRODUCTION
Chapter 1: Theoretical basis of Business Strategy in Real estate
Chapter 2: Current Situation of the Company's Real Estate Business Strategy at
Company 59 of Ministry of Defense.
Chapter 3: Building Business Strategy in Real estate for Company 59 of the
Ministry of Defense at the stage of 2018-2022 and recommendations.
CONCLUSION

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CHAPTER 1
THEORETICAL BASIS OF BUSINESS STRATEGY IN REAL ESTATE
1.1. The general theories of business strategy
1.1.1. Concept of strategy and business strategy
The term of strategy is derived from ancient military art. Borrowing from
military terms, the term “strategy” has been used quite commonly in the economic
life of the macro as nation, government and others as well as micro as economic
organizations. Actually there are many different views on strategy. Depending on
the purpose of research and in different periods of economic development,
economists have different views on strategies. However, in terms of business
research, most economists agree on the concept of strategy with business strategy.
With a traditional approach, as illustrated by Alfred Chandler (1962): “The strategy
involves setting the basic long-term goals of the business and applying a series of
actions as well as the division Necessary resources are needed to achieve these
goals”. Under this approach, the strategy is defined as a system of long-term goals,
key policies and measures on business production, finance and human factor-based
solutions to help businesses grow. Take a new step on the substance. However,
along with the development process, today's strategic concept has also changed.
With a modern approach, according to McKinsey (1978): “Strategy is a series of
activities designed to create sustainable competitive advantage”, or Johnson &
Scholes (1999): “Strategy is the direction and the scope of an organization in the
long run to gain competitive advantage for the organization by formatting its
resources in a changing environment to meet market demand and meet the
expectations of the parties”. With the new approach, the strategy is a system of
perspectives, goals and basic objectives and solutions, policies for the best use of
resources, the advantages and opportunities of enterprises not only aim to achieve
the objectives but also bring favorable conditions such as competitiveness, different
positions in order to create competitive advantage and sustainable development for
businesses.

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Theoretically, most economists in the world have unified business strategies
with business development strategies. Accordingly, business strategy or
development is a part of the overall strategy of the business, including the
components of the secondary strategy: marketing strategy, financial strategy,
research strategy and development and others. Through business strategy will
establish the most favorable conditions to create competitive advantage for
businesses. So it can be easy to understand, Business strategy is to synthesize longterm goals, policies and solutions of business production, finance and people to
bring the business operations of a business state higher in quality. Can understand
business strategy is a general program of action that the business outlined to
achieve the objectives in a certain period.
1.1.2. Characteristics of business strategy
-

Business strategy is the overall strategy of the business that

determines the objectives and business direction in a relatively long, five-year or
ten-year period and is fully understood in all production activities to create
favorable conditions and contribute to creating a competitive advantage, ensuring
the sustainable development of enterprises.
-

A business strategy is an outline of a business's future, including goals

that the business must achieve as well as the means needed to accomplish those
goals; meanwhile, in reality, the business shall combine strategic and situational
objectives, strategy and tactics, short-term and long-term. This will ensure the

business efficiency and overcome the deviations caused by the strategy.
-

Any decision that is important in the process of formulating, deciding,

implementing, and evaluating, adjusting the strategy must focus on the highest
leader of the business. This ensures the accuracy of long-term decisions, for
confidentiality of information.
-

Business strategy is always built on the basis of comparative

advantages. This requires that in the process of developing the strategy, enterprises
must properly assess their production and business situation in order to find

8


strengths and weaknesses and regularly review the internal factors when
implementing the strategy.
-

Business strategy is primarily and primarily built for business lines,

specialized business areas, traditions, strengths of enterprises. This puts the business
in the right place, must choose and implement strategies as well as engage in
business in the market has prepared and strength.
1.1.3. The role of business strategy
The formation and implementation of business strategy is extremely
important to the existence and development of the business. The role of business

strategy for enterprises is shown by Ngo Kim Thanh (2011) with four main roles:
- Business strategies help businesses clearly see their goals and direction in
the development of their business. It shows business executives how to look at and
determine where the organization goes and when it will achieve the desired results.
- The analysis and planning for business strategy not only helps businesses clearly
see their strengths and weaknesses, but also identifies the opportunities and challenges
that occur in the present and in the future. From there, businesses can take advantage of
the opportunities to grasp the opportunities, while preventing and reducing risks for
businesses, helping businesses have the competitive strength to win the market.
- The business strategy helps administrators use and allocate existing
resources in an optimal way as well as effectively coordinate organizational
functions to achieve common objectives.
- The business strategy creates strong bases to help businesses proactively
work out solutions to market fluctuations, as the basis for their R & D activities.
1.1.4. The levels of strategy
According to Johnson, Scholes and Whittington (2008), the organization has
different levels of strategy. It is possible to distinguish at least three levels of
strategy as follows:
a.

Company-level strategy

The highest level is the company level strategy, which relates to the overall
scope of an organization and how it creates added value for different parts of the

9


organization (business units). This strategy may include issues such as the
geographic scope of the business, the diversity of the product or service, and the

distribution of resources between the different parts of the organization. Companylevel strategies may include mergers, acquisitions, and sales of businesses, decisions
to join or withdraw from the market. In general, business-level strategies are
concerned with the expectations of owners - shareholders and the stock market. The
form of a company-level strategy is reflected in a clear or implicit statement about
the 'mission' that reflects that expectation. Understanding the company level
strategy is important, as specific, defining the scope of business as the basis for
other strategic decisions. At the company level there are strategies that include:
Growth strategy:
By pursuing this strategy, businesses are trying to exploit every opportunity
they have for existing, currently market-driven products or services, provided by
better performing companies. what they are doing. Growth strategies include:
+ Centralized Growth Strategy: A strategy that seeks to increase market
share of existing products or services in existing markets through strong marketing
efforts. Specifically:


Market entry strategy: It is a strategy to find ways to grow by

penetrating into new markets to sell products and services currently being
produced or supplied by enterprises.


Market development strategy: It is a strategy to find ways to

grow by penetrating into new markets to consume products and services
currently being produced or supplied by enterprises.


Product development strategy: A strategy to find ways to grow

through the development of new products and services for consumption in
markets where the business is operating.
+ Integration Strategy


Vertical integration: A strategy of self-sufficiency in

production and supply of inputs to the production process or the selfconsumption of products.

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

Horizontal integration: A strategy to find ways to grow through

mergers, acquisitions or joint ventures with competitors.
+ Growth strategy through diversification


Diversification: is the diversification into new business that is

related to current operations or business activities by analogy of production,
marketing, technology and others.


Diversification is to seek the methods to grow by targeting new

markets with new products that are technologically unrelated to the products
that businesses are producing.

Stability strategy
Stability strategy is the strategy of maintaining business scale as well as
stability in the strategic period.


Business field is slowing down or slowing down



Expenses for market expansion are too high to be effective



Scale of small business, weak potential



Enterprises go deep into specialization serving narrow markets



Encounter unusual fluctuations in the market

Strategy of decline


Cost-cutting strategy: This is a temporary short-term strategy

aimed at reducing ineffective parts or temporary problems related to
environmental conditions.



Strategic return on investment: This strategy applies when the

enterprise sells or closes one of its businesses to fundamentally change its
activities, recover investment capital. The resulting return on investment
leads to the reallocation of resources to revitalize businesses or create new
business opportunities.


Harvest strategy is a strategy that seeks to maximize the flow

of money, without further investment.

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

The exit strategy is based on the idea that an enterprise can

maximize the return on its business by selling it off before the industry falls
into recession.
b.

Business unit-level strategy

The second is a Strategic Business Unit (SBU) strategy, which deals with the
way in which different businesses in the company compete in their markets in their
own way. Thus, business unit strategy is sometimes referred to as “competitive

strategy”. A strategic business unit is part of an organization that has a distinct
external market for goods or services. the other SBU.
c.

Functional level strategy

The third level of strategy is at the operating part of an organization. There
are functional level strategies that relate to how the components and parts of the
organization implement well the company level strategies and the business unit
level in terms of resources, process and child. people. In fact, in most businesses,
successful business strategies depend heavily on decisions made, or activities
occurring, at the functional unit level.
1.2. The process of building business strategy of enterprises
As described in section 1.1.1, business strategy plays a very important role in
the existence and sustainable development of all enterprises in the medium and long
term. Building a business strategy, therefore, is not just a sketch of a business's
future image based on the feelings of the business leader but requires a completely
rational approach. , scientific and technical. According to Ngo Kim Thanh, the
process of building business strategy of business is divided into 7 steps, this process
is closed and continuous.

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Identification of missions and objectives

Review of external environment

Analysis on enterprise

Establishment of strategic methods

Analysis and selection of strategy

Implementation of strategy

Inspection and evaluation of the
implementation
Figure 1.1. The process of building business strategy of enterprises
Source: Ngo Kim Thanh (2011); Strategic Management Course - National
Economics University
1.2.1. Identification of the mission, the current business objectives of the business
The determining of the mission, the current business objectives of the
business is an important step in the process of business strategy development of
enterprises. The formation of the mission of the enterprise not only ensures the
consensus of common goals within the enterprise, but also helps the management
have the basis to formulate appropriate goals, mobilize resources of business to
achieve that goal. At the same time, the mission statement will help managers have
a basis for planning the most appropriate business strategy.
According to Philip Kotler (2003): “The mission of a company is its
manifesto for society, which proves usefulness and meaning in the existence of the

13


company to society”. Thus, the mission represents the business purpose, the reason
and meaning of the birth and survival, as well as the corporate social responsibility.
It expresses important things, business contributions in terms of business and life;
Show the business motto of the business, the position of the business in the market
and what the company committed to comply. When building a mission, it is

important not only to look at the desires of the owner or the leader, but also to look
at the internal factors of the company's products and services. and outside the
company (customer needs, competitors and others)
If the mission is a corporate statement to society, then in order to pursue its
mission, businesses must set business goals to identify the accomplishments that the
business needs to achieve in the period. Operation is relatively long (over a year).
Long-term goals are essential to the success of your business because they represent
the results your business must achieve when pursuing its business mission. When
defining goals, businesses need to answer the question of what is the business of the
business? In the goal we have to identify the business area of the business, the type
of product or service that the business wants to provide to the market, identify the
basic customer group, market demand. The goal must contain the desires of the
business to be externalized. Establishing business objectives requires the following:
specificity, consistency, measureablity, feasibility, challenging, and flexiblity.

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1.2.2. Assessment on the external environment of the business

External environment of
business, region and worldwide
6. CULTURE

Operating environment

1. POLITICS

(Industry sector)

1. Competitors

10. Government

5. SOCIETY

9. Interest group

8. Communities

2. Shareholders

Internal
environment of
business
Structure and
competitiveness

7. Commercial associations

3. Customers

2. LAW

4. Suppliers
5. Lenders

6. Employees of trade union
3. TECHNOLOGY

4. ECONOMY

Figure 1.2. Model of external environment analysis (business environment)
Business environment analysis is a process in which analysis and testing of
various environmental factors. An analysis of the external business environment
helps an organization see the significant opportunities and threats an organization
faces. Managers can then develop strategies to take advantage of opportunities and
avoid or reduce the impact of threats posed by the business environment. The scope
and content of the business environment analysis include: macro-environmental
analysis, micro-environment (also called sectoral or operational environment) and
internal environment is the enterprise internal environment).

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a. Analysis on the macro environment of the business
The macro environment consists of various factors that indirectly affect the
operation of an enterprise through its influence on the factors of the industry. In
fact, there are many different models that support macro-economic analysis of the
business, the most widely used of which is the PESTEL model. This is an effective
and simple tool used in situational analysis to determine the forces that impact
primarily from external environmental factors (macro environments) that may affect
the organization. These forces can create both opportunities and challenges for the
organization. The macroeconomic factors that the PESTEL Model mentions
include: Political Factors (P), Economic Factors (E), Social Cultural Elements (S),
Public Factors Technology (T), Elements of Ecology (E), Legal Elements (L).
Political
factors
(P)

Law
factors
(L)

Economic
factors
(E)

BUSINESS

Ecologic
al factors
(E)

Sociocultu
ral factors
(S)
Technol
ogical
factors
(T)

Figure 1.3. PESTEL model of macro environment analysis
-

Economic Factors: In fact, economic environment factors have a great

influence on businesses and are most often unpredictable, among the
macroeconomic factors. The movement of economic factors always contains both
opportunities and challenges for businesses. Therefore, companies often pay

attention to this economic factor through economic variables such as the growth

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