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LUẬN VĂN THẠC SĨ
Xây dựng chiến lược kinh doanh Công ty Du Lịch Viettravel

THESIS TITLE

BUSINESS STRATEGY BUILDING FOR
VIETTRAVEL CO., LTD


ACKNOWLEDGEMENTS
Our appreciation goes to the Master of Business Administration Programs –
Special mention also goes to all Lecturers of the Program provided us with
valuable knowledge during the MBA course so that we can sum up into this as a
final report.
Our gratitude also goes to the VIETTRAVEL Directorate and its staff has
facilitated our Group during the practice time there.
Appreciation also goes to all the Students of and “Mama” staff for
encouraging and helps us during the MBA course and report time.
Lastly, our appreciation goes especially to the Group’s families who
facilitate us to fully participate in the MBA course.
Although our Group has tried our best to perform this Capstone Project
Report within our capacities but it definitely still have unavoidable deficiencies. We
are thus hope that we will continuously receive more valuable comments from you
all for the next step – the strategy implementation of VIETTRAVEL.

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TABLE OF CONTENTS


2.1.Business environment analysis....................................................................................18
2.1.1. External business environment...............................................................................18
2.1.1.External business environment................................................................................18
2.1.2. Macro environment analysis..................................................................................18
2.1.2.Macro environment analysis....................................................................................18
2.1.2.1. Economic environment........................................................................................18
2.1.2.1.Economic environment..........................................................................................18
2.1.2.2. Technological environment.................................................................................18
2.1.2.2.Technological environment...................................................................................18
2.1.2.3. Sociocultural environment..................................................................................18
2.1.2.3.Sociocultural environment.....................................................................................18
2.1.2.4. Demographic environment..................................................................................19
2.1.2.4.Demographic environment....................................................................................19
2.1.2.5. Political - Legal environment..............................................................................19
2.1.2.5.Political - Legal environment................................................................................19
2.1.2.6. Global environment.............................................................................................19

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2.1.2.6.Global environment................................................................................................19
2.1.3. Micro environment analysis...................................................................................19
2.1.3.Micro environment analysis.....................................................................................19
2.1.3.1. Bargaining power of buyers................................................................................19
2.1.3.1.Bargaining power of buyers..................................................................................19
2.1.3.2. The Bargaining power of suppliers analysis.......................................................20
2.1.3.2.The Bargaining power of suppliers analysis........................................................20
2.1.3.3. Rivalry among competing firm analysis.............................................................20
2.1.3.3.Rivalry among competing firm analysis...............................................................20
2.1.3.4. Threat of new entrants analysis...........................................................................20

1.3.2. Other kind of products and services.......................................................................28
1.3.2.Other kind of products and services........................................................................28
1.4. Some results of business operations of the company................................................28
1.4. Some results of business operations of the company................................................28
2. External business environment analysis.......................................................................29
2. External business environment analysis......................................................................29
2.1. Macro environment analysis.....................................................................................29

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2.1. Macro environment analysis......................................................................................29
2.1.1. Economic environment...........................................................................................29
2.1.1.Economic environment.............................................................................................29
2.1.2. Technological environment....................................................................................31
2.1.2.Technological environment......................................................................................31
2.1.3. Socio-cultural environment....................................................................................31
2.1.3.Socio-cultural environment......................................................................................31
2.1.4. Demographic environment.....................................................................................32
2.1.4.Demographic environment.......................................................................................32
2.1.5. Political- Legal Environment.................................................................................32
2.1.5.Political- Legal Environment...................................................................................32
2.1.6. Natural environment...............................................................................................33
2.1.6.Natural environment.................................................................................................33
2.1.7. Global environment................................................................................................34
2.1.7.Global environment...................................................................................................34
2.2. Micro environment analysis......................................................................................35
2.2.Micro environment analysis........................................................................................35
2.2.1. Bargaining power of buyer analysis.......................................................................35
2.2.1.Bargaining power of buyer analysis........................................................................35



3.3.1.5. Financial Source..................................................................................................46
3.3.1.5.Financial Source.....................................................................................................46
3.3.1.6. Business capabilities of VIETTRAVEL.............................................................47
3.3.1.6.Business capabilities of VIETTRAVEL...............................................................47
3.3.2. Market....................................................................................................................48
3.3.2.Market........................................................................................................................48
3.3.2.1. Outbound Market................................................................................................48
3.3.2.1.Outbound Market..................................................................................................48
3.3.2.2. Inbound market....................................................................................................49
3.3.2.2.Inbound market......................................................................................................49
3.3.2.3. The values of the VIETTRAVEL brand.............................................................50
3.3.2.3.The values of the VIETTRAVEL brand..............................................................50
3.3.2.4. VIETTRAVEL brand awareness.........................................................................51
3.3.2.4.VIETTRAVEL brand awareness.........................................................................51
3.3.2.5. Sense of superior quality.....................................................................................51
3.3.2.5.Sense of superior quality........................................................................................51
3.3.3. Brand Image...........................................................................................................51
3.3.3.Brand Image..............................................................................................................51
3.3.4. Brand loyalty..........................................................................................................52
3.3.4.Brand loyalty..............................................................................................................52
3.3.5. Other values of the brand.......................................................................................52
3.3.5.Other values of the brand.........................................................................................52
3.4. Value chains and the creation of value chains of the company:...............................53
3.4.Value chains and the creation of value chains of the company:..............................53
3.4.1. Research and development.....................................................................................53
3.4.1.Research and development.......................................................................................53
3.4.2. Marketing and sales................................................................................................53
3.4.2.Marketing and sales..................................................................................................53

3.6. Solution 6..................................................................................................................59
3.6. Solution 6......................................................................................................................59
3.7. Solution 7..................................................................................................................60
3.7. Solution 7......................................................................................................................60
RECOMMENDATIONS...................................................................................................61
1. Vietnam Administration Tourism and stakeholders.....................................................61
1.Vietnam Administration Tourism and stakeholders...................................................61
2. Higher authorities – The Union of Vietnam Transport................................................61
2.Higher authorities – The Union of Vietnam Transport...............................................61
CONCLUSION...................................................................................................................62
REFERENCES...................................................................................................................63
APPENDICES....................................................................................................................64

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LIST OF ABBREVIATIONS

WTO

World Trade Organization

ASEAN

Association of Southeast Asian Nations

UNESCO

United Nations Educational Scientific and Cultural Organization


American Dollar

8


LIST OF TABLES AND FIGURES
Page
TABLES
Table 1: Some results of the company’s business operation
Table 2: External Factor Evaluation Matrix

24-25
35

Table 3: Human resource statistic

41-42

Table 4: Company’s capital structure

42-43

Table 5: Company’s revenue over the years

44

Table 6: Internal Factor Evaluation Matrix

50-51


INTRODUCTION
a. The necessity of topics
Vietnam is a country located at the center of East Asia with a geographical
location of advantages in economic cooperation and exchanges with other countries
in the region and international with its economy is growing and gained important
achievements in the renovation of the country.
With diverse and abundant natural resources of 3,200 km coastline with
diversity marine ecosystems and island; famous beautiful beaches; Ha Long Bay is
recognized World Natural Heritage by UNESCO; Nha Trang Bay is considered as
amongst the 29 world's most beautiful bays by The World Bay Club; Da Nang
beach is rated as one of the 6 most beautiful beaches the planet by Forbist magazine
(USA) . In addition, many marine ecosystems, islands and beaches such as the Lang
Co Mui Ne-Phan Thiet, Phu Quoc Island etc. Many caves, forests and natural
protected areas such as Phong Nha-Ke Bang, Can Gio Area Biosphere Reserves
World, Ca Mau salt-marsh forest... Also, Vietnam is the country with its excellent
culture- history with many cultural festivals-cultural art traditions, ancient capital
Hue, Hoi An, My Son relics... Of these, 8 heritages were recognized as the world
natural and culture heritages by UNESCO. Vietnam has a stable political regime
wiht hospitality people, refined food, handicrafts and traditional fine-arts...is
attracting more international tourists to Vietnam .
Currently, tourism is one of the key economic sectors of many countries
including Vietnam. Tourism is important for the country's economic development
and improving people's incomes, particularly for people in the trade villages of
tourist sites in the development strategies of national economy. The most important
in the integration period, tourism is the opportunity to exchange, convergence of
global tangible and intangible civilizations; create believe, understanding, solidarity
among nations ... In other words, tourism is a bridge to promote the economy, is the
face of a nation. In order to promote economic development needs to promote

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e. Expected output
Feasible business strategies for VIETTRAVEL, period 2010-2015

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f. Lay-out of Capstone Project Report
Besides the introduction, table of contents, conclusions, references, it is
divided into three chapters as follows:
Chapter I: Basic theory of strategic management;
Chapter II: Company’s business environment analysis; and
Chapter III: Business strategies for VIETTRAVEL period 2010-2015.

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CHAPTER I: BASIC THEORY OF STRATEGIC
MANAGEMENT
1. Basic theory of strategic management
1.1.

Concept of strategy
There are many concepts of strategy depends on viewpoint of each author. In

Strategy and Structure (1962), Chandler A., one of the first to initiate strategic
management theory defined as follows: "Strategy is the determination of the
objectives and purposes of the long-term business and the application of a series of
actions as well as the allocation of necessary resources to implement these
objectives.


enterprises to achieve business goals. The following image illustrates the business
strategy of an enterprise:
Opportunities

Strengths
Apply,
maintain

Internal

Discover

External

STRATEGY

Overcome

Prevent
Threats

Weaknesses

Figure 1: Business Strategy
(Source: Strategic Management – Associate Prof. Le
The Gioi)

Each enterprise must respond to strategic business decisions continuously.
However, some of strategic decisions can become more pressing in some certain

threats; (iii) Internal environment analysis to identify strengths and weaknesses, (iv)
Strategies selection based on the search resources, capabilities and core competency
and develop these to overcome threats, utilize opportunities from external
environment; (v) Strategy implementation.
Task of external and internal environment analysis and then select strategies
is considered as business strategy building. Strategies implementation will include
designing organizational structure and control systems appropriate to put into
practice strategies.
Each section described in Figure 2 is a step in the order in the strategic
planning process. Each cycle of strategic planning begins with a mission statement
and key objectives of the enterprise. After mission report and main objectives of
enterprise is analysis of internal and external environments and strategy selection.
The process ends with the design of organizational structure and control systems
necessary to implement selected strategies.

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BASIC MODEL OF BUSINESS STRATEGY MANAGEMENT

VISIONS AND
MISSIONS

External
External Analysis
Analysis
(Opportunities
(Opportunities &
& Threats)
Threats)

Strategies

Company
Company Strategies
Strategies

Organization
Organization
Structure
Structure

Conformable
Conformable with
with strategies,
strategies,
control
structure
control structure

Control
Control Design
Design

Strategy
Strategy Change
Change

Figure 2: Basic model of business strategy management
(Source: Strategic Management – Associate Prof. Le The Gioi)


many parts of society including enterprises. They are changes on creating new
knowledge and the transition to the knowledge into products, processes and new
materials... Technology changes include creation and destruction, the risks and
threats. It also can shape new structure for industry.
In the global space, opportunities and threats of technology to all the
enterprises by buying out or self-created new technologies.
2.1.2.3.

Sociocultural environment

Sociocultural environment related to social attitudes and cultural values - the
foundation of society. Social changes also create opportunities and threats for
enterprises, especially for tourism enterprises.

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2.1.2.4.

Demographic environment

Demographic segments in the macro environment related to: population; age
structure; geographic distribution; community of nations; income distribution etc
2.1.2.5.

Political - Legal environment

Political - Legal factors also impact significantly to level of opportunities and
threats from business environment for enterprises and mostly in how the interaction
between enterprises and the government. This segment will affect significantly to

price, quality products, services by continue bargaining. They are the persons who

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control competition in the industry through their decisions of purchasing products
and services.
When analyzing the distributors, enterprise need to pay attention to
importance of customers, they can directly go deep into internal environment of the
enterprise.
2.1.3.2.

The Bargaining power of suppliers analysis

Number of suppliers and the size of the providers will decide competitive
pressure, the power to negotiate their industries and enterprises. If the market only a
few vendors have a large scale will create competitive pressure, affects the entire
production and business activities of the sector. So in the current era where
information is a factor promoting the development of the commercial information
providers have a large impact on the selection of suppliers in the business.
2.1.3.3.

Rivalry among competing firm analysis

Current competitors are competitors are doing production and business
activities similar with enterprise. Analyzing current competitors need to analyze
strategies, objectives, evaluate strengths, weaknesses ... of competitors to select
suitable strategy for enterprise.
2.1.3.4.


"before the leaders can shape a new strategy, they need to reach a common
understanding about the current location of their enterprises" - W. Chan Kim and
Renee Moubourgne. Therefore, the purpose of internal environmental analysis is to
find the strengths and weaknesses of enterprise and from which to combine the
external business environment to create appropriate strategies and solutions for the
enterprise.

2.2.

SWOT Matrix Tool
To identify and select business strategies often use SWOT matrix. SWOT is

the abbreviation of the collection of the first letter of the English words: Strengths,
Weaknesses, Opportunities and Threats.
(i) Strengths: What are the advantages of enterprise? What kind of work the
enterprise is doing best? Which resources that enterprise need and can use? What
are te advantages that others see in your business? Problems from the business
aspect itself and other enterprises must be considered. Advantages are usually
formed when compared to competitors. For example, if all the competitors offer

21


products of high quality, quality manufacturing process will not be advantage that it
is essential to have to survive on the market.
(ii) Weaknesses: Anything can improve? Is task of business worst? What
should avoid? Problems on the basis of inside and outside of the enterprise must be
considered. Others may see weaknesses that do not see themselves. Why
competitors can do better than them? Recognize and face with the truth.
(iii) Opportunities: Where are good opportunities? What are concerned

(ii) W-O Strategies: overcome weaknesses to pursue opportunities;
(iii) S-T Strategies: determine how companies can use their advantages to
reduce damage to the external challenges;
(iv) W-T: set up a defense plan to prevent weaknesses of the business from
the effects from the outside environment.

2.3.

External Factor Evaluation Matrix (EFE Matrix)
EFE matrix method is a strategic-management tool often used for assessment

of current business conditions. The EFE matrix is a good tool to visualize and
prioritize the opportunities and threats that a business is facing.
External factors assessed in the EFE matrix are the ones that are subjected to
the will of social, economic, political, legal, and other external forces
The EFE matrix method conceptually relates to the Balanced Scorecard
method of external factors.

2.4.

Internal Factor Evaluation Matrix (IFE Matrix)
IFE matrix is a strategic management tool for auditing or evaluating major

strengths and weaknesses in functional areas of a business. IFE matrix also provides
a basis for identifying and evaluating relationships among those areas. The Internal
Factor Evaluation matrix or short IFE matrix is used in strategy formulation.
The IFE Matrix together with the EFE matrix is a strategy-formulation tool
that can be utilized to evaluate how a company is performing in regards to identified
internal


combined into one suggestive model. The IE matrix is a continuation of the EFE
matrix and IFE matrix models.
The IE matrix is based on the following two criteria:
Score from the EFE matrix -- this score is plotted on the y-axis
Score from the IFE matrix -- plotted on the x-axis
The IE matrix works in a way that you plot the total weighted score from
the EFE matrix on the y axis and draw a horizontal line across the plane. Then
you take the score calculated in the IFE matrix, plot it on the x axis, and draw a
vertical line across the plane. The point where your horizontal line meets your
vertical line is the determinant of company’s strategy. This point shows the strategy
that the company should follow.
The IE matrix can be divided into three major regions that have different
strategy implications.
Cells I, II, and III (horizontal) suggest the grow and build strategy. This
means intensive and aggressive tactical strategies. Your strategies should focus on
market penetration, market development, and product development. From the
operational perspective, a backward integration, forward integration, and horizontal
integration should also be considered.
Cells IV, V, and VI suggest the hold and maintain strategy. In this case,
your tactical strategies should focus on market penetration and product
development.
Cells VII, VIII, and IX are characterized with the harvest or exit strategy. If
costs for rejuvenating the business are low, then it should be attempted to revitalize
the business. In other cases, aggressive cost management is a way to play the end
game.

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CHAPTER II: COMPANY’S BUSINESS ENVIROMENT

VIETTRAVEL’s customers are not just customers at the Northern of Vietnam but
nationwide. To meet customer requirements at that time, VIETTRAVEL also
established representative office in Ho Chi Minh and its operation with
effectiveness nowadays.
Also from outbound activities are growing, VIETTRAVEL leaders realize
the potential to develop MICE outbound tours for Vietnamese is very high due to
demand to learn foreign experience in the integration period is increasing. Thus, in
2006 the company focused on exploiting customers is agencies, companies who
wished to go abroad for learning experience combined with tourism. Also in 2006,

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