Improving the competitivenes capacity of vietnamese postal enterprises in the process of international integration

ofia DAVID, Lecturer Ph.D (2008), etc. 1.1.2. Studies in Vietnam "Strengthening the competitiveness of Vietnam Posts and Telecommunications Group in the context that Vietnam joins the World Trade Organization" by Tran Thi Anh (2012). "Completing the Service Quality in current Vietnamese Postal Enterprises” by Ngo Phuc Hanh (2008). “Developing the marketing strategy of Vietnam Post in the current period" by Tran Thi Thap (2011). 4 "Product & Service Development Policy of Vietnam Post in the current period" by Tran Thi Hoa (2012). 1.1.3. Factors affecting the competitiveness There are some studies on such factors like "Competitiveness of firms: Review of theory, frameworks and models” by Ambastha & Momaya (2004); “Crafting and executing strategy” by Thompson, Strickland & Gamble (2007); “Enhancing competitiveness of Vietnamese securities companies” by Nguyen Duy Hung (2016), and so on. 1.1.4. Research gap There is lack of research on the competitiveness criteria of Vietnamese postal enterprises and a model that measures the impact of internal factors on competitiveness of Vietnamese postal enterprises. 1.1.5. The main problems addressed in this thesis: Firstly, a theoretical research on the competitiveness of postal enterprises and a clarification of the factors influencing the competitiveness of Vietnamese postal enterprises in the process of international integration, selecting typical criteria for assessing the competitiveness of Vietnamese postal enterprises. Secondly, a real situation analysis of the competitiveness of Vietnamese postal enterprises; pointing out the reasons, limitations and problems that need to be addressed in order to improve the competitiveness of Vietnamese postal enterprises in the process of international integration. Thirdly, interpreting and proposing feasible orientations and solutions to improve the competitiveness of Vietnamese postal enterprises in the process of international integration. 5 1.2. Orientation to solve all the matters in the thesis 1.2.1. Research objectives and questions (i) Objectives: Assess the competitiveness of Vietnamese postal enterprises; propose orientation and solutions to improve the competitiveness of Vietnamese postal enterprises in the process of international integration. (ii) Research questions: What criteria used to assess the competitiveness of postal enterprise? Which factors affect to the competitiveness of postal service? What is the real situation of the competitiveness of postal enterprises over the past few years? What solutions are available to improve the competitiveness of Vietnamese postal service? 1.2.2. Research subject and scope Research subject: competitiveness, criteria and factors that influence the competitiveness of Vietnamese postal enterprises in the process of international integration. Research scope: - Content: The research focuses on studying competitiveness criteria, which measure the impact of internal factors on the competitiveness of Vietnamese postal enterprises in the process of international integration. - Place: Vietnamese market. - Time: data analysis and the real situation evaluation of the competitiveness of Vietnamese postal enterprises in the period of 2008-2019. 1.2.3. Approaches and Methodology 6 Approaches used in the research: Historical/logic approach; Approach from the perspective of development economics; Approach from the State; Approach from the Enterprise side. Methodology: (1) Data collection: Primary and Secondary data collection; interview and investigation; (2) Data processing: statistic, qualitative and quantitative analysis. CHAPTER 2: THEORETICAL BASIC 2.1. The competitiveness and competitiveness of the postal enterprises 2.1.1. Definition of competitiveness Competitiveness is the ability to create better and more appropriate products or services than its competitors, thus creating an advantage over its competitors. 2.1.2. Definition of business competitiveness Business competitiveness demonstrates the organization's capabilities and advantages over its competitors in meeting the best customers’ requirement in order to earn higher profits, by exploiting its strength and opportunities to create appropriate products or services, to attract consumers and develop further, to get higher profits and improve its position in the market. 2.1.3. Competitiveness of the postal enterprises in the process of international integration The competitiveness of postal enterprises is the ability to provide services efficiently, to expand market share and earn higher profits than its competitors. An enterprise is considered to have good competitiveness is when it holds no.1 position as the market leader or its market position belongs to the top leading group. 7 2.2. Criteria for evaluating the competitiveness of the Postal Enterprises in the process of international integration The thesis selects the following criteria to assess the competitiveness of Vietnamese postal enterprises: Ability to maintain and expand market share; quality of services; service prices; branding, trust and corporate image; business efficiency. 2.3. Factors affecting the competitiveness of the postal enterprises in the process of international integration 2.3.1. External factors Macro-environment factors are economic factors, political and legal forces, demographic forces, social and cultural forces, technological factors, integration factors. The elements of microenvironment are competitors, customers, marketing intermediaries, suppliers and publics. 2.3.2. Internal factors The internal factors of the enterprise are: financial capacity; service capacity; network development capacity; integration capacity; organizational, management capacity; equipment and machinery capacity and technological application. 8 2.4. Theoretical Models of Business Competitiveness Analysis Based on theoretical basic of studied models, this thesis identifies the research model of internal factors affecting the competitiveness of Vietnamese postal enterprise as follows: Theoretical model of measuring internal factors affecting the competitiveness of Vietnamese postal enterprises Financial capacity Service capacity Network development capacity Integration capacity Management & organizational capacities Competitiveness of Vietnamese postal enterprises Machines, equipment, science and technology 9 The research hypotheses given are: Hypothesis H1: Financial Capacity has a positive impact on competitiveness of Vietnamese postal enterprises. Hypothesis H2: Services Capacity has a positive impact on the competitiveness of Vietnamese postal enterprises. Hypothesis H3: Network development capacity has a positive impact on the competitiveness of Vietnamese postal enterprises. Hypothesis H4: Integration capacity has a positive impact on the competitiveness of Vietnamese postal enterprises. Hypothesis H5: Organizational and management capacities have a positive impact on the competitiveness of the Vietnamese postal enterprises. Hypothesis H6: The ability to apply science & technology, machinery & equipment utilization have a positive impact on the competitiveness of the Vietnamese postal enterprises. Official Quantitative Research: Sample size: 316 units. Sampling Method: The sample is selected among postal enterprises in Hanoi and Ho Chi Minh City. Data analysis: data is collected and analyzed through Statistical analysis; Valuation Scale; Analysis of EFA elements; CFA analysis; Determination of Model adequacy with SEM analysis and bootstrap analysis. 10 CHAPTER 3: COMPETITIVENESS SITUATION OF VIETNAM POSTAL ENTERPRISES IN THE PROCESS OF INTERNATIONAL INTEGRATION 3.1. Overview of current situation of Vietnam postal enterprises in the process of international integration According to the global ranking by UPU, Vietnam was ranked 50/172 for the 2IPD postal development index (2018), and 45/172 countries (2019). There is an increase of 5 levels in ranking and of 0.06 points in 1 year. Regarding the number of enterprises: Up to 15.9.2019, the number of postal enterprises licensed to operate in Vietnam market was 431 with full economic components. Regarding revenue: The demand for postal services is increasing, the number of enterprises participating in Vietnam's postal market is increasing, and thus the revenue of this sector continuously increases over the years. In 2019, the revenue is VND 34,311 billion. Regarding labor scale: The number of employees in the postal business fluctuates continuously over the years. In 2019, the number of employees in postal business is about 74,500 employees. 3.2. Actual competitiveness analysis and assessment of Vietnam postal enterprises in the process of international integration 3.2.1. Ability to maintain and expand market share Based on above analysis results, the most efficient level of operation belongs to state-owned postal enterprises and such enterprises are taking the lead in Vietnam post market, and then followed by private enterprises. 3.2.2. Service quality 11 In general, the quality of postal services has improved years by years, which proves that postal enterprises have gradually perfect their services. According to the assessment of institutional and individual customers, the service quality of the state postal enterprises is higher than that of private postal enterprises. 3.2.3. Service prices Each enterprise has built and applied a specific price list. In case customers have great demand, the enterprises have their own policies to ensure benefits for customers. 3.2.4. Brand, reputation and business image All enterprises focus on building their brand image. However, it seems that the state postal enterprises are more prestige and better known than private postal enterprises. 3.2.5. Business performance Among of all, private enterprises have the least revenue comparing to state-owned enterprises and FDI enterprises. The level of labor productivity of FDI enterprises is much higher than that of domestic enterprises. The labor productivity level of state-owned postal enterprises is higher than that of private postal enterprises. 3.3. Analysis of external factors affecting the competitiveness of Vietnamese postal enterprises in the process of international integration 3.3.1. Macro-environmental factors Economic factors: Vietnam economy continued to change positively in the first six months of the year, with gross domestic growth of 6.66%. Macroeconomic was stable, exports made a 12 significant mark, consumers’ belief set a new record, inflation remained the lowest in three years 2017-2019. Legal forces: The Government has been working very hard to improve the policy regime, issue postal laws, resolutions, commitments and guidelines. However, there are no legal documents or law relating to e-commerce. Political forces: Vietnam has a stable politics, which guarantee consistent economic policy implementation. Vietnam has always been an attractive investment point for foreign postal enterprises also thanks to political stability. Demographic forces: Vietnamese workforce is estimated to be around 48.8 million people, which will be a good source for postal enterprises. Socio-cultural forces: Post office transaction via Internet are becoming a popular trend in Vietnam, forcing enterprises to develop services in a way that serves the needs of society. Technological factors: Due to the development of technology, instead of taking and recording orders manually, postal enterprises need to apply new software and convenient applications. Integration factors: Vietnam joins WTO, ASEAN, APEC, etc, and actively participates in negotiations and signs the free trade agreements, which eliminates tariff barriers and creates opportunities for non-commercial delivery of goods. 3.3.2. Micro-environmental factors Competitors: So far, Vietnam has more than 400 companies operating in the postal business with full economic components. The growing presence of more foreign firms, with large investments and 13 professional practices, is a positive sign for the market. However, it also means that Vietnamese firms will have to compete more fiercely. Customers: organizations or individuals. The customers create the market; the size of the customers creates the market size. Marketing Intermediaries: assist postal enterprises to focus on their main business, as they will be in charge of logistics for customer marketing campaigns. Suppliers: provide postal equipment, hardware, software, logistic, etc. Publics: Financial public and internal public. Enterprises should pay attention to public attitudes toward their activities and services. 3.4. Analysis of internal factors affecting the competitiveness of Vietnamese postal enterprises 3.4.1. Qualitative research Qualitative research methods include in-depth interviews, developing scaling factors that affect the competitiveness of Vietnamese postal enterprises, designing preliminary questionnaires. 3.4.2. Quantitative research The scale of factors affecting the competitiveness of Vietnamese postal enterprises consists of 6 factors with 32 variables and 1 factor with 5 variables for assessing the competitiveness of Vietnamese postal enterprise, will be included to design the questionnaire. Formal quantitative research: After statistical analysis of descriptions, the thesis evaluated the value of the scale with the Cronbach's Alpha confidence coefficient of 6 independent variables 14 and 1 dependent variable in the EFA for analysis. The results of the EFA analysis show that 7 measures with 33 variables satisfy the conditions used in the CFA analysis. Factor analysis confirms that CFA of 7 measures with 33 variables that satisfy the conditions of implementing AMOS 21 software. The SEM model tests showed that the most powerful factors affecting the competitiveness of postal enterprises were: (1) Service capacity (29.5%); (2) Equipment and machinery capacity, science and technology capacity (27.4%); (3) Organizational and management capacity (24.5%); (4) Network Development Capacity (23%); (5) Integration Capacity (22%), and lastly the weakest influence is (6) Financial capacity (15.2%). 3.4.3. Verification of the research hypotheses The author examine the research model with 06 independent variables and 01 dependent variable, hypotheses H1, H2, H3, H4, H5, H6 are accepted. Completing these factors will increase the competitiveness of postal enterprises. 3.4.4. Discuss the results of the inspection The average value of the scale of the factors affecting the competitiveness of Vietnamese postal enterprises ranges from 2.88 to 3.59. Integration capacity has the lowest average value and financial capacity has the highest average value. In general, the competitiveness of Vietnamese postal enterprises currently stands at a moderate level and is still quite low. State-owned postal enterprises are more competitive than private-owned one. Regarding financial capacity, state-owned postal enterprises always lead the market in terms of revenue, market share and charter 15 capital. Thus, state-owned postal enterprises are more competitive than private-owned postal enterprises. Regarding service capacity, state-owned postal enterprises are more competitive than private ones. Regarding network development, state-owned postal enterprises are more competitive because they are leading in the infrastructure system with more postal service points and transport networks. Private enterprises have to depend on the state’s postal infrastructure. Regarding integration capacity, state-owned postal enterprises are more competitive than private one. Only two largest State-owned postal enterprises are working with foreign partners, the remaining private postal enterprises only focus on domestic market. Regarding organizational and management capacity, state- owned postal enterprises are more competitive than private-owned postal enterprises. Regarding the capacity of machines, equipment and the ability to apply science and technology, state enterprises are also more competitive than private one. Private enterprises with limited financial resources are unable to invest in upgrading modern technology to serve the business process; thus, it is difficult to compete with enterprises with state capital. 3.5. Conclusions on the factors affecting the competitiveness of Vietnamese postal enterprises Firstly, financial capacity of private postal enterprises is mostly weak. Secondly, service quality remains low. Thirdly, organizational and managerial capacity of most postal enterprises is poor. Fourthly, labor qualification is poor. Fifthly, postal enterprises 16 are weak in their ability to integrate. Sixthly, there are some shortcomings in postal infrastructure. Seventhly, postal legal system is incomplete and asynchronous. CHAPTER 4: SOLUTIONS TO IMPROVE THE COMPETITIVENESS OF VIETNAMESE POTAL ENTERPRISES IN THE PROCESS OF INTERNATIONAL INTEGRATION BY 2030 4.1. The context and forecast of how international integration affect the competitiveness of Vietnamese postal enterprises by 2030 4.1.1. International and domestic contexts International context: In this digital era, postal business becomes an important supplier of global e-commerce. It plays a major distribution partner for online retailers through its global network. Domestic context: In 2019, Vietnam’s point increased by 3.5 points (from 58 to 61.5), higher than the global average (60.7) and increased by 10 levels (from the 77th position) according to WEF ratings The year 2019 also marks an important step of Vietnam's integration into global economy with the EVFTA free trade agreement and EVIPA investment protection agreement. 4.1.2. Forecasting the impact of international integration on the competitiveness of Vietnamese postal enterprises by 2030 For period 2020 - 2030, competition for delivery orders from e-commerce is forecasted to increase sharply. The revenue of the post and delivery industry will reach over USD10 billion in 2020, of which many enterprises will have high growth rates of 60-200% per year. According to a strategy until 2025 recently published by the Ministry of Information and Communications, the growth rate of postal 17 business still maintain at a high level, and revenue of postal services increases by 3-4 times (reaching USD 3-4 billion). It continues to contribute to the national GDP of at least 0.5%. The whole sector will develop a nationwide network. By 2025 and 2030, it is expected that 85% and 90% of communes will have post offices. Vietnam will also improve its ranking in the postal development rankings published by Universal Postal Union (UPU). By 2025, Vietnam will be in the top 40 of the world. 4.2. Orientation of developing and improving the competitiveness of Vietnamese postal enterprises in the process of international integration until 2030 To develop postal infrastructure towards promoting digital transformation; shifting from traditional postal services to digital one; focusing on e-government services and supporting industry/logistics services for e-commerce; building a database on postal enterprises and digital transformation orientations. By the end of 2020, Vietnam will be in the group of 40-45 leading countries in postal services of UPU. 4.3. Solutions to improve the competitiveness of Vietnamese postal enterprises in international integration by 2030 4.3.1. For Vietnamese postal enterprises Improving financial capacity: Vietnamese postal enterprises need to develop an intelligent financial strategy with many guaranteed mobilization channels such as mobilizing internal capital from the stock, capital, funds and external capital sources such as commercial credit, bank credit, and advance customers. On the other hand, postal enterprises need to identify exactly the need for each capital type: 18 market, equipment and technology investment, labor and salary, financial plan, etc. Improving service quality: Domestic postal enterprises need to implement many key solutions to improve their service quality such as application of IT in the postal services; equipping a camera system to monitor the process of transportation exploitation as well as the attitude and communication of employees to customers. Performing good customer care, classifying customers by each object: big customers, loyal customers, special customers, potential customers. Improving organizational and management capacity: Firstly, business owners often update their knowledge and necessary skills such as leadership skills, management skills, presentation, negotiation and communication skills, etc. Secondly, business owners should regularly monitor, analyze, evaluate and adjust each production process and strategy of the business. Thirdly, flexible application of modern management and organizational models instead of traditional models. Fourthly, business owners need to be fully equipped with knowledge and capacity to approach international standards. Training and developing human resources: Firstly, completing the system of unified and professional training and vocational training programs nationwide at all educational levels. Secondly, encouraging and facilitating the development of socialized models, market-driven training models, business-university-institute-linked training models, joint venture models, and international links, etc. Thirdly, promoting training activities to improve the qualifications of officials and employees. Fourthly, there are special policies and remuneration to attract talents and encourage domestic and foreign experts. 19 Integration capacity: Postal enterprises need to coordinate and link strongly with supporting and related enterprises in the field of machinery, information technology or logistics supply chains. Exploiting the advantages of the parties. 4.3.2. For the State Completing the legal system: The Government needs to synchronize the legal normative document system in postal business. Preparing documents under the law of uniform instructions including mandatory enforcement and sanctions on administrative violations. Completing the regulations related to e-commerce or adding new regulations on price policies and certification requirements on transportation routes. Establishing a postal association: Establishing a postal association will support, ensure the interests of enterprises, and joining the association will provide them with many opportunities for interaction. Other solutions: The Ministry of Information and Communication should direct the construction of postal codes to each address so that postal enterprises can adopt digital and information technology in the selection, transportation and mail delivery; and expand the transportation vehicles suitable to each area 4.4. Some recommendations to the State Firstly, the State creates an environment of favorable laws and mechanisms, policies for postal enterprises to develop equality and fair competition, contributing more and more to growth and economic development of the country. Secondly, the State removes a number of 20 mechanisms in the field of management to promote the deployment of logistics services. Especially, creating favorable conditions for postal enterprises in the field of land allocation and lease. This is a condition for building a logistics infrastructure, contributing to ensuring a supporting role, reducing costs in the implementation of logistics services in Vietnam. Thirdly, the State continues to improve substantially the business investment environment, consolidate the macro-economic foundation, promote the start-up ecosystem, innovate and create the most favorable conditions to support, promote entrepreneurship development. Fourthly, postal enterprises should be given equal access to policies and participation in government supporting programs. Fifthly, the State supports the linkage between small postal enterprises and large postal enterprises. CONCLUSIONS, RECOMMENDATIONS AND ORIENTATIONS In fact, in the period from 2008-2019, Vietnamese postal enterprises have achieved very impressive results, their revenue h