Researching the competitiveness of Vietnam Post

g competitors' strategies and tactics in a smart way, gain business advantages in trading goods and services to maximize profits” Như vậy, có nhiều quan điểm, cách tiếp cận về cạnh tranh, do đó cũng có nhiều trường phái, tác giả có các khái niệm khác nhau về cạnh tranh. Sau khi nghiên cứu các khái niệm về cạnh tranh của nhiều tác giả, với cách tiếp cận khác nhau. Thus, there are many viewpoints and approaches on competition, so there are also many schools and authors with different definition of competition. After studying the concepts of competition of many authors, with different approaches In the dissertation, the PhD candidate approaches the concept of competition as following: competition is a set of strategies and tactics suitable to the business environment in order to gain advantages and promote competitive advantages for enterprises 5 to exist and develop sustainably. 2.1.2 The role of competition (1) For economy, society; (2) For consumers; (3) For enterprises 2.1.3 Classification of competition There are many criteria for classifying competition, but according to the level of competition, the competition is divided into different levels: (1) Competition between products (2) Competition between enterprises; (3) Competition among industries; (4) Competition between countries. 2.2 Enterprise competitiveness 2.2.1 Definition of enterprise competitiveness The concept of competitiveness was first mentioned in the US in the early 1990s. According to Aldington Report (1985): “A competitive enterprise is the one that can produce products and services with superior quality and lower prices than other domestic and international rivals. Competitiveness means achieving long-term benefits of enterprises and the ability to ensure income for workers and business owners”. However, the concept of competitiveness is sofar not yet understood in an uniform way. Here are some of the concepts of enterprise competitiveness being commonly used. (1) The competitiveness of enterprises is the ability to maintain and expand the market share, to gain profit. This is a quite commonly understood concept nowadays, whereby competitiveness is the ability to consume/sell goods and services compared to competitors and the ability to earn “profit” of enterprises. (2) Enterprise competitiveness is the ability to put up with attacks from other enterprises. (3) Competitiveness is synonymous with labor productivity. According to M. Porter (1990), labor productivity is the only measure of competitiveness. (4) Enterprise competitiveness is an expression of its real capacity and advantages over competitors in best satisfying customers' requirements to earn higher and higher profits, by exploit and use its internal and external capacity and advantages to create attractive products and services for customers. (5) Enterprise competitiveness is the ability to stand firm in the competitive market, expand its market share and increase profits through a number of criteria such as productivity, quality, technology and differentiation of products and services provided, added value, production costs; is the ability of an enterprise to do better than competitors in achieving profit targets (Michael E.Porter, 2009) (6) Competitiveness means maintaining and improving competitive advantage. (7) According to the author Le Dang Doanh: “The competitiveness of an enterprise is measured by the ability to maintain and expand its market share, to make profits for the enterprise in the competitive environment at home and abroad.”. (8) According to the author Ton That Nguyen Thiem: the increase in the endogenous and exogenous value of the enterprise, this is the competitiveness that every business tries to achieve. Synthetizing from the concepts of previous researchers, with the typical research situations of the P h.D dissertation, the candidate approaches and uses the concept of enterprise competitiveness as follows: “Enterprise competitiveness is the ability of an enterprise to maintain and improve its competitive advantage over its competitors in best satisfying customer needs, expanding consumption markets, attracting and effectively using production factors to achieve high and sustainable profits.” 2.2.2 Factors making up the enterprise competitiveness According to Michael Porter approaching from the enterprise side (the business-centric approach), the competitiveness of an enterprise consists of elements/factors belonging to the enterprise's value chain structure over its competitors and the relative position of the enterprise compared to the factors that determine the cost of each activity. Factors include four groups: (1) The factors of the enterprise itself; (2) Customer needs; (3) Related and supporting fields; (4) Strategy of the enterprise, the industry structure and its competitors. According to Michael Porter and Philip Kotler approaching from the customer side (the consumer-centric approach), competitiveness is to create a superior value for customers over competitors. In which the constituent elements of competitiveness are: 1) Factors that increase the customer value are the improvement of the company's products, the quality of products and services, the quality of service provided, the improvement of its image and reputation, and the change of behavior, method to serve customers,.... 2) Factors that reduce the cost of the customer include: reduce the purchase price of the product, reduce the waste of time and effort, reduce the mental cost of the customer,.. According to the approach of the researcher about the customer perceived value, Creating customer perceived value is improving the competitiveness of enterprises. The customer perceived value is made up of the following factors: (1) Behavioral price 6 (2) Monetary price; (3) Emotional responses; (4) Production quality (5) Reputation. Synthesizing from the perspective of the business-centric approach, the consumer-centric approach and the customer perceived value, the candidate proposes the factors creating the competitiveness of enterprises divided into 3 groups: (1) Group of factors showing the competitive position in the market includes 3 criteria: Market share of the enterprise, quality of products and services, reputation and brand image. (2) Group of factors showing the business capability of an enterprise compared to a competitor includes 5 criteria: Financial capacity, Management and leadership, Technology level and service process performance, distribution (Marketing), Human resource management and business skill. (3) Group of business efficiency factors of the enterprise compared with competitors includes 4 criteria: growth rate of market share, unit cost, promotion performance, R&D performance. Figure 2.1 Model of factors that create competitiveness of an enterprise Source: The candidate collects 2.2.3 Criteria reflect the enterprise competitiveness The 3 groups of factors that make up the competitiveness of an enterprise, are concretized by 12 criteria. Each criterion has a certain importance which creates the competitiveness of each enterprise in the market. 2.2.3.2 Measure criteria reflecting the enterprise competitiveness For postal enterprises in Vietnam's market, the candidate measures the impact of each criterion (weight) on the overall competitiveness of postal businesses through giving a score and discussion of specialist group, those who understand the postal market of Vietnam currently. Besides that, the Ph.D candidate has referenced from the monographs of the authors: P.Kotler, Day & Winsley, Reed, Jain and applied to the characteristics of the postal enterprises, the conditions of Vietnam, the Ph.D candidate set up the paramgeter system to determine the competitiveness of our postal service companies as shown in Table 2.2. Method of determining (see Annex 2, 2.4). Through 12 criteria and (weight) the influence of each criterion on the overall competitiveness of Vietnam post enterprises, the candidate has applied 5-point scale technique (of which: 5- excellent; 4 - good; 3- fair; 2- weak; 1- poor), formulated the questionnaires by each subject, to evaluate and measure competitiveness according to each criteria and overall competitiveness of enterprises currently dominating the Vietnam Postal market today. Each criterion reflecting the competitiveness of Vietnam postal enterprises is assessed by the relevant representatives (the business administrator, the direct public of the business) and the average score. The competitiveness of postal enterprises is determined and ranked through the overall evaluation point according to the following formula : Of which : Pi- The average score of parameter i of the assessed enterprise ; Ki- The importance factor of the parameter i Table 2.2 Criteria reflecting the competitiveness of Vietnam Postal enterprises Criteria Symbol Importance Group of factors showing the competitive position in the market Group of factors showing the business capability compared to a competitor Group of business efficiency factors of the enterprise compared with competitors Enterprise competitiven ess Financial capacity Management and leadership Technology level and service process performance Market share Quality of products and services Reputation and brand image Distribution (Marketing) HR management and business skill Growth rate of market share Unit cost Promotion performance R&D performance ∑ = = 12 1i SCTDN KiPiD 7 (Pi) factors (Ki) 1. Market share of enterprises 2. Market share growth and profits 3. Financial capacity 4. Management and leadership 5. Quality of products and services 6. Technology level and service process performance 7. Reputation and brand image 8. Unit cost 9. Distribution (Marketing) 10. Promotion performance 11. R&D performance 12. HR management and business skill P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 0.05 0.05 0.05 0.1 0.1 0.1 0.1 0.1 0.1 0.05 0.1 0.1 Overall competitiveness of Vietnam postal enterprises 1,0 Source : the candidate collects 2.3 Factors affecting the enterprise competitiveness The competitiveness that enterprises have is considered to be due to their enduring and long-term efforts. It is the result of many practical activities carried out according to a competitive strategy set out and dependent on many internal and external factors. 2.3.1 Internal factors 2.3.2 External factors CHAPTER 3: ACTUAL SITUTATION OF COMPETITIVENESS OF VIETNAM POST 3.1 Analysis of factors affecting the competitiveness of Vietnam Post 3.1.1 General introduction about the business situation of Vietnam Post On January 6th, 2015, Ministry of Information and Communications issued the Decision No. 09/QĐ-BTTTT on reorganizing the parent company of Vietnam Post under which the organization and management model of VNPost includes the Board of Members and the Board of General Directors, in accordance with the Decree No. 69/2014/NĐ-CP of the Government. The executive management apparatus of the enterprise under the new organizational model has also been strengthened (Organization model, see Appendix 1c). Table 3.1 The business results of VNPost (2013 -2017) Unit: VND billion Criteria 2013 2014 2015 2016 2017 Total revenue 8035,7 6893,3 9529 12681 17277 - Parent company 7474,2 6179,9 8544 11578 15826 + Delivery postal services 2398,4 2677,4 3862,4 4553 5691 + Postal financial services 862,7 1244,3 1585,6 2419 3358 + Media distribution service 2959,6 1590,2 2773,8 4606 6777 - Subsidiaries 661,5 743,1 985 1103 1451 Total costs 7968,4 6823,1 9344 12489,9 16974 - Parent company 7433,4 6109,7 8456 11341,9 15991 - Subsidiaries 535 713,4 888 1058 1387 Total profits 67,3 99,3 185 191,1 299 - Parent company 40,8 70,1 88 130 235 - Subsidiaries 26,5 29 97 61,1 64 Source: VNPost's Report on business activities 3.1.2 Analysis of factors belonging to the internal environment of 3.1.2.1 Factors of material facilities After splitting VNPost, the charter capital of VNPost is 8,122 VND billion. Fixed asset cost is 4,388 VND billion. Fixed assets are mainly means of transport, offices of transaction points, Culture commune Post Office.... Table 3.2 VNPost's service network in 2015 - 2017 No. Criteria 2015 2016 2017 1 Total points served 12642 Points 13017 Points 13177 Points Post office (level 1,2,3) 2332 POs 2359 POs 2672 POs 8 Culture commune Post Office 8085 Points 8185 Points 8201 Points Delivery post office 680 POs 705 POs 749 POs Public mail box 1548 boxes 1382 boxes 1179 boxes 2 Exploitation system 680 Points 683 Points 720 Points International exploitation post office 5 POs 5 POs 5 POs Exploitation post office level 1 78 POs 78 POs 77 POs Exploitation post office level 2,3 597 POs 603 POs 638 POs 3 Average serving radius 2,82 Km/ Points 2,80 Km/ Points 2,79 Km/ Points Source: VN Post 3.1.2.2 Human resource factor Table 3.3 Statistics of VNPost's labor force (2015 -2017) Number of employees: Person No. Criteria 2015 2016 2017 1 Long-term labor 21.319 21.563 22.386 2 Labor delivering in communes 11.450 11.420 11.279 3 Labor at Culture commune POs 8.085 8.256 8.318 Total 41.685 42.657 42.777 Source: VN Post The current workforce of VNPost is 42,777 persons, of which university and post-graduate employees account for only 11%, college and intermediate employees account for 27.6%, employees at primary level, workers and untrained employees account for 61%. This data shows that the labor force of VNPost is crowded but the labor quality is still low, which is a huge obstacle for VNPost in developing its business in the current competitive conditions. About applying Information technology (IT); building a contingent of officials; applying science and technology in management, administration and control of production and business activities; about technical equipment and technology. 3.1.2.3 Factor on the ability of applying science and technology to production and business 3.1.2.4 Factor on trategies and structure of VNPost By 2017, after nearly two years of organizing its operations under the new model, the management and administration of production and business activities of the Company from the level of the Board of Members, the Board of General Directors and the management levels at units has been in order, ensuring compliance with the provisions of law, and at the same time creating the initiative and flexibility to meet the requirements of production and supply throughout the network. 3.1.3 Analysis of factors belonging to the external environment of VNPost 3.1.3.1 Environmental factors of Vietnam Postal Industry (1) About customers using postal services; (2) About the main competitors with VNPost in the current Vietnam Postal market; (3) About providers; (4) About substitute product; (5) About the potential rivals 3.1.3.2 Factors of macroeconomic environment (1) Economic environment; (2) Environment of science and technology; (3) Socio-cultural environment; (4) Natural environment; (5) Political and legal environment: (6) Political-legal environment From analyzing the business environment and factors affecting VNPost's competitiveness, it is possible to gather strengths, weaknesses, opportunities and challenges in improving VNPost's competitiveness in the market of Vietnam nowadays in (table 3.7) below. Table 3.7 SWOT analysis of VNPost's competitiveness in Vietnam market today Internal factors of VNPost Strength Weakness (1) VNPost has clear goals and business strategies. (2) VNPost has a broad network of providing services. (3) VNPost always pays attention, invests and applies technology in business activities. (4) VNPost provides a variety of services. (5) VNPost has a team of rich experienced employees. (6) VNPost has the largest market (1) Organizing the operational system is still cumbersome. (2) Service providing process lacks flexibility. (3) The equipment in postal exploitation is outdated. (4) Crowded workforce, large labor costs. (5) Employee qualifications are uneven. (6) Marketing activities are still limited. (7) The management 9 share in Vietnam postal market. (7) VNPost has a long tradition (8) VNPost has built a good reputation and a good image in Vietnam market. mechanism has not promoted the full potential of abundant human resources. (7) R&D activities have not been synchronized, unified from the corporation level to the member units. Environm ental factors Opportunity Threat (1) The development trend of science and technology so that VNPost can develop new types of services. (2) The scientific and technological revolution is taking place strongly so that VNPost can apply advanced science and technology to the service provision process. (3) The deeper and deeper economic integration of Vietnam is an opportunity for VNPost to strengthen cooperation and joint venture. (4) Policies on public interest services help VNPost have a competitive advantage. (5) The development of e-commerce is an opportunity for postal businesses. (6) The introduction of the Postal Law has created an opportunity of equal business operations. (7) The broad service network is an opportunity for VNPost to promote its ability to meet customers' needs. (1) International integration makes Vietnam postal market become more and more competitive. (2) The development trend of science and technology creates many new substitute products and services and the changing needs of customers. (3) Postal enterprises not only compete directly with each other but also with other enterprises in providing logicstic services of Vietnam economy. (4) State assurance policy on quantity and quality for public interest services. (5) The labor market has many changes. (6) To operate business effectively on the nationwide postal network is a big challenge for VNPost. Source: The candidate collects 3.2 The competitiveness of VNPost in the current Vietnam postal market Assessing the competitiveness of VNPost and its main competitors in Vietnam postal market through criteria reflecting the enterprise competitiveness (Table 2.2). 3.2.1 Market share of current postal enterprises; 3.2.2 Market share growth of Vietnam Postal enterprises; 3.2.3 Financial capacity of postal enterprises in Vietnam market; 3.2.4 Management and leadership capacity of postal enterprises in Vietnam market; 3.2.5 About the service quality of postal enterprises in Vietnam market; 3.2.6 About the technological level and service process efficiency of postal enterprises in Vietnam market; 3.2.7 About the reputation and brand image of postal enterprises in Vietnam market; 3.2.8 About the unit cost of postal enterprises in Vietnam market currently; 3.2.9 About the marketing and distribution capacity of postal enterprises in Vietnam market; 3.2.10 Regarding the promotion capacity of postal enterprises in Vietnam market; 3.2.11 About the research and development (R&D) capacity of postal enterprises in Vietnam market currently; 3.2.12 About the management and business skills of the leadership team in postal enterprises in Vietnam market today. Of which: Pi- The average score of parameter i of the assessed enterprise Ki- The importance factor of parameter i The result of the overall competitiveness of postal enterprises is shown in Table 3.18 below. Table 3.18 A summary of competitiveness assessment based on 12 criteria reflecting the overall competitiveness of Vietnam's postal enterprises currently Criteria (Pi) Weight Ki VNPost ViettelPo st SPT HNC- Sagawa Express DHL Fedex TNT Other Postal Comp. P1(4) 0.05 3.54 3.595 2.928 3.18 3.72 3.348 3.435 2.838 P2(12) 0.05 3.267 3.965 2.736 3.294 3.769 3.477 3.472 3.144 ∑ = = 12 1i SCTDN KiPiD 10 P3(11) 0.05 2.95 3.85 2.15 3.4 3.8 4 3.75 2.09 P4(10) 0.1 3.361 3.699 3.094 3.41 3.646 3.642 3.482 3.015 P5(7) 0.1 3.454 3.561 3.071 3.392 3.478 3.735 3.565 2.958 P6(6) 0.1 3.474 3.606 3.033 3.228 3.411 3.586 3.608 2.941 P7 (1) 0.1 3.973 3.877 3.544 3.318 3.862 3.898 3.739 3.042 P8(8) 0.1 3.443 3.715 3.387 3.329 3.96 3.889 3.859 3.057 P9(3) 0.1 3.661 3.601 3.33 3.456 3.889 3.784 3.817 3.036 P10(9) 0.05 3.408 3.617 3.116 3.02 3.412 3.594 3.372 3.14 P11(2) 0.1 3.676 3.67 3.168 3.114 3.378 3.51 3.286 2.856 P12(5) 0.1 3.5 3.585 3.07 3.43 3.575 3.535 3.45 2.84 Source: Collecting from the investigation results of the candidate Looking at the overall competitiveness index of some postal enterprises that dominate Vietnam's postal market, we can see that the overall competitiveness of foreign postal enterprises and joint venture companies has higher scores and is more uniform than domestic enterprises. Table 3.19 Overall competitiveness of postal enterprises in Vietnam's market today Criteria (PiKi) VNPost ViettelPost SPT HNC- Sagawa Express DHL Fedex TNT Other postal Comp. P1K1 0.177 0.180 0.146 0.159 0.186 0.186 0.172 0.142 P2 K2 0.163 0.198 0.137 0.165 0.188 0.188 0.174 0.157 P3 K3 0.148 0.193 0.108 0.170 0.190 0.190 0.188 0.105 P4 K4 0.336 0.370 0.309 0.341 0.365 0.365 0.348 0.302 P5 K5 0.345 0.356 0.307 0.339 0.348 0.348 0.357 0.296 P6 K5 0.347 0.361 0.303 0.323 0.341 0.341 0.361 0.294 P7 K7 0.397 0.388 0.354 0.332 0.386 0.386 0.374 0.304 P8 K8 0.344 0.372 0.339 0.333 0.396 0.396 0.386 0.306 P9 K9 0.366 0.360 0.333 0.346 0.389 0.389 0.382 0.304 P10 K10 0.170 0.181 0.156 0.151 0.171 0.171 0.169 0.157 P11 K11 0.368 0.367 0.317 0.311 0.338 0.338 0.329 0.286 P12 K12 0.350 0.359 0.307 0.343 0.358 0.358 0.345 0.284 DSCTDN 3.512 3.683 3.116 3.312 3.655 3.655 3.582 2.935 Source: Collecting from the investigation results of the candidate 3.3 General assessment of the competitiveness of VNPost in Vietnam's postal market currently 3.3.1 Competitive advantages of VNPost in Vietnam's postal market currently Competitive advantages are ranked in order of superior advantage, the most impacted is ranked first, and the least impacted on the overall competitiveness of VNPost is ranked the last. Firstly, About brand image and reputation. Secondly, About research and development R&D. Thirdly, About marketing and distribution network. Fourthly, About market share of services dominating the market. Fifth, About human resource skills and corporate governance. Sixth, About the technological level and service process performance. Seventh, About the quality and price of services provided to customers. Eighth, About the unit cost of products and services. Ninth, About promotion performance. Tenth, About management and leadership. Eleventh, About financial position. Twelfth, About market share growth and profitability. 3.3.2 Limitations and causes of limitations in the competitiveness of VNPost in Vietnam's postal market currently In addition to competitive advantages, VNPost still has certain limitations in its competitiveness. The limitations and causes of the limitations are arranged by the candidate in the order of priority of possibly overcoming before to after. (1) Although VNPost has the largest market share of service provision in Vietnam Postal market today, customers assess the ability of VNPost to provide services lower than its main competitors in the market such as ViettelPost, DHL, TNT. (2) And VNPost is a long-standing postal business, familiar with customers, and the process and service delivery method is less innovative, so the attractiveness of the service is not high. This is a limitation of VNPost compared to new postal businesses. VNPost needs to take corrective measures to strengthen its competitive position in the market. (3) The efficiency of using capital and assets is still modest. The main cause of this problem is that VNPost has invested scatteredly in equipment procurement, many network equipment are too old to operate effectively. (4) The apparatus is cumbersome from the corporation level to its member units, this has made the policies and strategies from the corporation transmit to officers, employees and customers slow, customer feedback to all levels of the corporation was also not quick, leading to a slow adaptation of VNPost to market changes. (5) The quality of VNPost's service compared to its competitors in the market and the changing needs of customers in the postal service in Vietnam market are still limited. Although the services of Vietnam Post are diverse, they lack