NĂNG LỰC CẠNH TRANH – NGHIÊN
CỨU TÌNH HUỐNG CÔNG TY CỔ
PHẦN ĐẦU TƯ VÀ XÂY DỰNG SỐ 18
(LICOGI 18)
THESIS

COMPETITIVE CAPPABILITIES
- CASE STUDY OF CONSTRUTION AND
INVESTMENT JOINT STOCK
COMPANY NO.18 (LICOGI 18)

( Au g u s t ) 2 0 1 4


ACKNOWLEDGEMENT
The thesis “Competitive Capabilities - Case Study of Constructon and
Investment Joint Stock Company No.18 (LICOGI 18) ” is my own research. The
data and the thesis result is of my own work with collecting, using learned
knowledge and exchanging ideas with my instructor to finish.

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TABLE OF CONTENTS

ACKNOWEDGEMENT………………………………………………………….ii
LIST OF FIGURES ……………………………………………………..…..……iii
LIST OF TABLES ……………………………………………………………….iv
LIST OF CHARTS ………………………………………………………………v
INTRODUCTION ………………………………………………………………...1
CHAPTER 1: THEORICAL BASIC OF FIRM COMPETITIVE

1.3.2.

Capabilities................................................................................................13

1.3.3.

Core competencies.....................................................................................14

1.3.4.

Superior competencies...............................................................................14

1.3.5.

Sustainable Competitive Advantage..........................................................15

1.4.

Functional domains - the keys to sustainable competitive advantages
...................................................................................................................19

1.4.1.

Operation production.................................................................................19

1.4.2.

Marketing..................................................................................................20

1.4.3.

advantages................................................................................................29

Summary of chapter 1
34
CHAPTER 2: THE CURRENT SITUATION OF COMPETITIVE
CAPABILITIES AT CONSTRUCTION AND INVESTMENT JOINT STOCK
COMPANY NO.18 (LICOGI 18)….. 35
2.1.
About Construction and Investment Joint Stock Company No.18......35
2.1.1.

History and Development..........................................................................35

2.1.2.

Organizational structure and Business activities........................................36

2.1.2.1. Organizational structure.............................................................................36
2.1.2.2. Business activities......................................................................................38
2.1.3.

Business results in the period of 2011-2013..............................................38

2.2.

The current situation of competitive capabilities at Construction and
Investment Joint Stock Company No.18................................................41

2.2.1.



iv


CHAPTER 3: THE SOLUTIONS TO ENHANCE COMPETITIVE
EFFICIENCIES OF CONSTRUCTION AND INVESTMENT JOINT STOCK
COMPANY NO.18 (LICOGI 18)
81
3.1.
Development orientation of LICOGI 18 Joint Stock Company to
2015, vision to 2020..................................................................................81
3.1.1.

Gerneral orientations.................................................................................81

3.1.2.

Specific objectives.....................................................................................82

3.2.

Some solutions to enhance competitive capabilities of the company.........83

3.2.1.

Increase charter capital, balance capital structure and optimally use capital
efficiency...................................................................................................83

3.2.2.


VINACONEX 1
PHUC HUNG

: Construction and Investment Joint Stock Company No.18
: Construction Joint-Stock Company No.1
: PhucHung Holdings Construction joint stock company

/CONSTREXIM
PHUC HUNG
SONG DA 12

: Song Da No.12 joint stock company

vi


LIST OF FIGURES
Figure 1.1. How to identify sustainable competitive advantage............................10
Figure 1.2. Origin of sustainable competitive advantage.......................................11
Figure 1.3. The curve of long-term unit cost.........................................................19
Figure 1.4. Experience curve.................................................................................20
Figure 1.5. The relationship between the average cost per unit of product and the
percent of customers leave..................................................................22
Figure 1.6. Human resources management content...............................................25
Figure 2.1. Chart of organizational managemeny of LICOGI 18..........................37
Figure 2.2. The Process of economic and technical management of LICOGI 18. .48
Figure 2.3.

Summary and comparison of assets and capital structure, 2012 - 2013....65


Business results of the parent company 2011-2013.............................39

Table 2.3.

The detailed cost analysis of products sold in 2012, 2013...................56

Table 2.4.

Summary of competing tool comparison among companies...............61

Table 2.5.

Indicators of assets – capital sources of the Parent company in 2011-2013
............................................................................................................65

Table 2.6.

Revenue, Price, Net profit in 2012, 2013............................................67

Table 2.7.

Summary table of labor structure........................................................70

Table 2.8.

Financial indicators against competitors.............................................75

Table 2.9.

Value of business operation and market share of construction field in

Vietnam is no exception, Vietnam is still a country with impressive economic growth,
accompanied with increasingly rapid urbanization speed. As forecasted by Vietnam’s
Ministry of Construction, the housing market demand in the period of 2015-2020 is newly
construction of 425 million square meters of floor area, with about 3 million newly built
apartments/ houses; and investment in construction of 12.5 million square meters of social
housing in urban areas. The annual growth of the construction industry is 8%-9%,
illustrating that the demand of the construction market in Vietnam is still very huge.
The construction industry is indispensable to the socio-economic
development of every country. In Vietnam, it is significantly important because of
the country’s ongoing industrialization and modernization. Therefore, the
development of construction enterprises in order to meet the industrialization and
modernization is an urgent task.
LICOGI 18 Joint Stock Company (JSC.) is a privatized state enterprise. By
promoting its advantages and achievements gained during 50 years of growth and
development, and quickly adapting to the mechanisms, the Company has gradually
established and improved its competitiveness in the marketplace. As the
competition in the construction industry these days is increasingly fiercer, LICOGI
18 JSC. is likely to encounter a large number of strong competitors, and what it has
achieved is always threatened in the future, hence enhancing the Company’s
competitiveness is a must.
For the ability to preserve and promote the achieved successes, it is essential
for LICOGI 18 JSC. to take measures to retain and increase its market shares and
dominate the market. Proceeded from the reality and the competition status of
LICOGI 18 JSC., the thesis named “Competitive Capabilities - Case Study of
Constructon and Investment Joint Stock Company No.18 (LICOGI 18)" is
selected by the author as one of measures for the goals above.
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2. Aims and objectives



Corporation and leaders, some experts of the Department of Enterprise Management
under MOC.
The research process consists of the following steps: Determining research
objectives, developing research model, selecting scale, designing questionnaire,
conducting survey, collecting and processing data, analyzing and conclusion.
Research Process
Research objectives

Research model

Designing questionaire

Conducting survey

Collecting and
processing data

Analyzing and
conclusion

The detailed questionnaire is prepared with the aim of collecting information
related to the research.
With the intention of understanding the knowledge of LICOGI 18’s leaders
about competitiveness, the importance of competitiveness and comparison of
competitors, two separate questionnaires were designed.
The questionnaire content basically consists of two parts as follows:

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their own. The second one is closed questions, i.e. multiple choices on levels of
understanding such as don’t know, know a little, know, know well, know very well
are available for the respondents to choose.
For the questionnaire relating to the survey, closed questions are prepared to
collect data from construction businesses on scale, human resources, finance,
machinery, brand, corporate culture, business production outcomes and so on.
(For details of questionnaires, see the Appendix)
Data collection and result analysis method
In order to do the survey, the author first made attempts to build friendly
relationships with respondents to gain their trust and assure of use of their
information only for research, not for any other purposes.
In terms of the secondary data source, a search for materials such as books,
newspapers, professional journals was conducted on websites, reports and
regulations before classified. Then, relating must-read issues were identified.
During the process of studying materials, all significant and essential data was
marked and sumed up for the future lookup and reference. Some data was quoted

4


directly in the paper, while the rest was generalized or rephrased to help the author
express his personal opinions and assessments. In terms of collection of the
company information through secondary data sources, as the author himself used to
work at the company, most of the information can be accessed. By studing materials
and documents, combined with observations, the author managed to integrate
essential information as well as judgements and comments in his research.
The analysis of results was conducted with methods of statistics, comparison,
analysis and collection of real data.
Research process
After the detailed research proposal was approved, the author collected

In addition to the introduction, conclusion, list of tables, references and
appendices, this thesis consits of 3 chapters, including:
Chapter 1: Theorical Basic of firm competitive cappabilities
Chapter 2: The current situation of competitive capabilities at Construction
and Investment Joint Stock Company No.18 (LICOGI 18)
Chapter 3: The solution to enhance competitive capabilities efficiencies of
Construction and Investment Joint Stock Company No.18 (LICOGI 18)

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CHAPTER 1
THEORICAL BASIC OF FIRM COMPETITIVE
CAPABILITIES
1.1. The concepts of competition, competitive capabilities and advantages
1.1.1. Competition
In the business world, competitors do not compete face to face as in military,
but in a sectoral environment towards a target market segment and efforts to attract
customers.Through purchasing, customers will decide who is the “winner” or
“loser”. The competition results are demonstrated by the achievement of each
competitor in the market, which must be recognized by customers. In the
consumers’ eyes, the "winner" seemingly stands out with important features
satisfying their needs.1
Competition, in the enterprise level, is fighting for or grabbing from
opponents customers, market share and business resources. However, the nature of
competition today is not destroying opponents; it is the businesses themselves
which must create and provide customers with new or higher value added than their
competitors, so that customers would choose them instead of their opponents. 2
1.1.2. Competitiveness
During the research on competition, people introduced the concept of

information systems...
Therefore, it is obvious that the concept of competitiveness is a dynamic one,
which is constituted by various factors and is subject to the impact of both micro
and macro environment. A product can be considered competitive this year, but no
longer in the next year or the year after next if it is unable to maintain its
advantages.
1.1.3. Competitive Advantage
Competitive advantages, in the broad sense, are those enabling an enterprise
to be superior to its rivals. Competitive advantage brings enterprises the ability to
retain its success in the long term.3
Competitive advantage is the value provided for customers by enterprises,
which exceeds the cost to create it. This is the value for which customers are willing
to pay and what preventing requests for lower prices, compared to that of
competitors, for equivalent benefits or provision of unique benefits rather than a
higher arisen price.4
When a business gains competitive advantages, it will have things which its
3
4

Source: Strategic Management – Statistical Publishing House, 2007
Source: Michael Porter, 1998, page 3

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competitors do not own, i.e. the business will perform better than its opponents, or
be able to do things that the others can not. Competitive advantage is needed for the
success and long-term survival of a business. That is why many businesses effort to
develop their own competitive advantages; however, this is easily eroded by
imitation of competitors.

look to resources. It is a fortune that a business is rich in resources. However, if they
are not deployed, they remain resources, otherwise they will become capacity. In the
market mechanism and integration tendency, a business wishing success in
development has to seek out and promote their key capabilities, which are called
core competencies. However, core competencies are good but not sufficient, as the
competitors can have the same advantage. We have to determine what is truly
superior competency to get sufficiently large (safe) distance so that competitors can
not or take very long time to catch up us. From scientific analyses, the sustainable
competitive advantage of a business can be identified.
Figure 1.1. How to identify sustainable competitive advantage
Sustainable
SustainableCompetitive
Competitive
Advantage
Advantagehelps
helpsorganizations
organizations
totogain
revenues
above
gain revenues aboveaverage
average
Short term
Superior
Superiorcompetencies
competencies
The
Thesources
sourcesofofcompetitive
competitive

Source: Dr.Dang Ngoc Su - MBA program materials
A core competence (which makes differences) is the unique strength enabling
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a company to achieve superiority in efficiency, quality, innovation and customer
responsiveness, thereby creating superior value and gaining competitive advantage.
A company with core competencies will be able to differentiate its products or
retain lower costs than its rivals. Thanks to that, the company has created more
value than its competitors and will achieve rates of return above average.
Figure 1.2. Origin of sustainable competitive advantage
Resources

Special
ability

Superiority
Effectiveness
Quality
Innovation
Customer
responsiveness

Difference
Creating
the
superior
value

Higher


Material resources

Technical resources

- Trust
- Management capabilities
- Organization habit
- Ability to borrow
- Ability to self-fund
- Formal reporting relationship structure,
planning system, official joint control
- The complexity and distribution

of

machineries, equipment and factories
- Access to raw materials
- Technical reserves such

as

copyright,

trademarks, patents, trade secrets

Source: Strategic Management – Statistical Publishing House, 2007
Intangible resources include innovation and reputation. In the development of
core competencies, intangible resources are more useful and outstanding, compared
to tangible resources.


Brand name

reliability of products
- Reputation with suppliers in terms of
effectiveness,

efficiency,

support,

interaction and mutually beneficial
relationship
Source: Strategic Management – Statistical Publishing House, 2007
1.3.2. Capabilities
Considered as the origin of abilities, intangible and tangible resources are
basic things resulting in the development of competitive advantage. Potential
capability is the ability of a company to deploy purposely integrated resources in
order to achieve a desired goal. As a re-organized close link, capabilities are
generated over time through the interactions between tangible and intangible
resources. These skills focus on the daily routines of the organization, that is, how to
make decisions and manage internal processes to achieve the organization’s goals.
More generally, the potential capabilities of a company are the products of
organizational structures and control systems. They define how and where decisions
are made in the organization, reward behavior, values and cultural norms of the
company. As essential for competitive advantage, the capabilities commonly rely on
the development, transmission, and exchange of information and knowledge through

13



14


competitors. Consequently, it creates more values than its competitors and gains
possible profits above average.
Superior competencies include short-term and long-term ones. Short-term
superior competencies are the resources and abilities of a company to create its
short-term competitive advantage, for example financial, material, technical
resources, management ability and innovation ability. These capabilities are easily
imitated or caught up by competitors, and the company will lose its sustainable
competitive advantage.
Long-term superior competencies are the resources and capabilities of a
company which are generated during a process of learning, supplementing and
accumulating. These capabilities are difficult for competitors to imitate or take long
time to catch up. They include human resources, reputation with customers, brand,
and company culture...
Long-term superior competencies ensure the standards of preciousness,
rarity, difficulty in imitation, sufficiently large distance and coincidence with
success factors.
1.3.5. Sustainable Competitive Advantage
The sustainable competitive advantage of businesses has four features:
Firstly, it can help businesses create value, reduce costs and enhance business
performance.
Secondly, it is unique and combined with resources in a unique way.
Thirdly, it is endogenous; its production is the result of interactions between the
units and individuals within the organization, through the coordination and organization
of technical resources of the business, creating basic capability of the business.
Fourthly, the competitive advantage of a business is formed during the process
of learning and accumulation of that business; therefore, it can not be purchased in

Difficulty in imitation

function of a capacity are not clear
- The social complexity: international relations,
credibility, and friendship among administrators,
staff, suppliers and customers
- Surpassing the competition in many aspects; it

Sufficiently large distance

takes time and efforts for opponents to shorten the

Coincidence with success

distance.
- No equivalent strategy

factors

Source: Strategic Management – Statistical Publishing House, 2007
Preciousness
The capability enables companies to explore opportunities and reduce threats
from the external environment. By effectively deploying the opportunities,
companies can create values for customers. Sometimes, the capabilities of
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