Tóm tắt Luận văn Competitive neutrality: Challenges and recommendations for competitive renovation of State - Owned enterprises

competition of enterprises. - Core competency theory: According to Prahalad & Hamel (1990), core competency is at the heart of business strategy, ability to build, develop, renovate competition, and create profit of the enterprise. - Dynamic capacities theory: That dynamic capabilities-based view emerged has overcome the shortcomings of ignoring the market dynamic process of the classic economic model. According to Leonard-Barton (1992), dynamic capacities reflect the capacities to build, develop and renovate competition under a new and more creative form in historical conditions and current market position. 2.1.2.4. Competitive marketing approach According to theoretical view of competitive marketing approach, enterprises need to rely on the market, must understand customers and well satisfy customer needs; that is the decisive factor to create success in building, developing and renovating competition. Under this perspective, building, developing and renovating competition mean winning, retaining and attracting customers. To compete effectively, the enterprise must consider the systems and the competition, including its own characteristics as a business. 2.2. Overview of competitive neutrality and SOEs 2.2.1. Overview of competitive neutrality 2.2.1.1. The emergence of competitive neutrality Until now, the scientific idea of competitive neutrality has undergone a process of remarkable development in research and legal practices in many countries. Modernizing, harmonizing national economic policies and competition policies cannot go without theoretical points of competitive neutrality at the present time. 2.2.1.2. Concept of competitive neutrality In this thesis, competitive neutrality implies legal regulations on environmental reform in which SOEs and the private sector participate and aims to promote effective competition among economic sectors by minimizing the competitive advantages that SOEs can enjoy over private enterprises. 2.2.1.3. The role of competitive neutrality The role of competitive neutrality is shown in the following aspects: Firstly, ensuring fairness and equality of the competitive environment. Secondly, improving the efficiency of resource allocation. Thirdly, increasing the harmony in the business environment. Fourthly, competitive neutrality not only plays an important role for enterprises but also brings benefits to consumers. Fifthly, contributing to perfecting competition policy. Sixthly, contributing to domestic economic development. Seventhly, increasing the competitiveness of enterprises. 2.2.1.4. Key aspects of competitive neutrality OECD (2012) expressly states that the challenges are also principles in applying competitive neutrality, specifically: Firstly, Streamlining the operational form of government business. Secondly, Identifying the costs of any given function. Thirdly, achieving certain Commercial rate of return. Fourthly, Accounting for public service obligations. Fifthly, Tax Neutrality. Sixthly, Regulatory Neutrality. Seventhly, Outright subsidies and Debt neutrality. Eighthly, Public Procurement. 2.2.2. Overview of SOE competition in a competitive neutrality environment 2.2.2.1. Concept of SOEs In this thesis, we approach SOEs as enterprises where the State holds 100% of the charter capital or shares, the equity capital is dominant and the State controls to a certain extent the decision-making process of the enterprise. 2.2.2.2. Characteristics of SOEs under the perspective of competitive advantage SOEs, under the perspective of competitive advantage, are basically characterized by being equipped with and holding important resources of the State; being entitled to use land, natural resources, even in many areas, being identified as monopoly; to profit maximization in many cases, they are not necessarily be required to perform 2.2.2.3. Factors influencing the competition of SOEs The group of external environment factors includes: economic environment; legal and political environment; and industrial environment. The group of internal environment factors includes: financial capacity of the enterprise, science and technology level; and human resources. 2.2.3. Impact of applying competitive neutrality policy on competition of SOEs The application of competitive neutrality policy has a fundamental and important impact on the competition of SOEs, thereby creating challenges for SOEs in the context of competitive innovation. Specifically, the application of competitive neutrality policy affects the competitiveness of SOEs. In addition, it also affects the production and business activities of SOEs. It is noteworthy that the application of competitive neutrality affects the management apparatus of SOEs, thereby impacting on the competition of these enterprises. At the same time, competitive neutrality policy has an impact on senior human resources/leadership of SOEs. Further, applying competitive neutrality policy also affects the quality of human resources at SOEs (Tang Van Nghia, 2017). 2.3. Specific competitive activities of SOEs under the conditions of applying competitive neutrality policy Activities of implementing competitive strategy that SOEs need to renovate include: 2.3.1. Researching and choosing target markets - Market research: The market renovation research process consists of 3 steps: (i) renovating information collection, (ii) processing information, and (iii) making the right, appropriate strategic decisions, policies and plans. - Market targeting: Market targeting involves market segmentation and market targeting. 2.3.2. Product strategy Product values ​ ​ are expressed in five levels (Kotler and Keller, 2006): (i) core benefit; (ii) basic product; (iii) expected product; (iv) augmented product; and (v) potential product. In SOEs’ competitive renovation under the conditions of applying competitive neutrality policy, their product strategy will have to focus on (i) product quality or core benefit, (ii) product design, packaging, (iii) building brands, trademarks, and (iv) researching and developing new products. 2.3.3. Pricing strategy Under the conditions of applying competitive neutrality policy, SOEs can apply one or a combination of the following three basic methods: Customer value-based pricing; Competition-based pricing; and Cost-based pricing. In order to renovate competition in the context of competitive neutrality, SOEs will have to: (i) implement a corrective strategy for the market segmentation through 4 phases, (ii) implementing a discount strategy, (iii) conducting a discount, (iv) conducting penetration pricing, and (v) managing output to predict purchasing behavior by customers and competitors. 2.3.4. Accompanied Service strategy Under the conditions of applying competitive neutrality policy, SOEs will have to: (i) renovate and develop accompanied services on the basis of supplementing and improving capacities, features or perfecting key products and services; (ii) have a deeper understanding of customer shopping behaviour; (iii) diversify accompanied services and upgrade existing services to bring better customer experience; and (iv) increase the training of staff, especially frontline staff - who have direct contact with customers, instead of production staff (Frei, 2008). 2.3.5. Channel strategy According to Wright (1999), there are three approaches to making formal decisions on the goals of the distribution channel, i.e.: mass distribution (or intensive distribution); selective distribution; and exclusive distribution. To renovate competition in the context of competitive neutrality, SOEs will be more proactive in product distribution to penetrate deeper into the market, expand market share and improve corporate reputation. Fundamentally, in order to compete with private companies, SOEs, when building a distribution system, will have to define 3 geological limits: general limit (defined for the enterprise as a whole), area limit (defined for distribution units), and location limit (defined for points of sale). In terms of distribution form, in the context of competitive neutrality, SOEs will have to constantly renew distribution channels to suit the needs and tastes of customers as well as changes in the market. 2.3.6. Trade promotion strategy In the context of competitive neutrality, SOEs often consider the two-way trade promotion strategy of "pull" and "push". In the context of competitive neutrality with private firms, according to Kerin et al. (2003), in order to build an effective trade promotion strategy, SOEs need to identify the following factors: (i) target audience, (ii) objectives of the trade promotion program, (iii) budget for Marketing, (iv) selection of Marketing form, (v) location and means of running the trade promotion program, (vi) time for running the trade promotion program, (vii) execution of trade promotion program, and (viii) promotion assessment. 2.3.7. Communication strategy In the context of competitive neutrality, SOEs will have to renovate from thinking to the way of implementing communication strategy. Specifically as follows: (i) defining the target public group, (ii) defining the communication goals, (iii) design the communication message, (iv) choosing the media, (v) defining the budget for communication, and (vi) assessing the results of communication activities. 2.3.8. A number of complementary issues In the context of competitive neutrality, SOEs will have to pay attention to a number of complementary issues to improve their competitiveness in the marketplace, specifically: management and governance capacity; production and operation technology level; human resource management and development; development of core competencies; and building dynamic capacity. 2.3.9. Research model, hypotheses and measurement of variables 2.3.9.1. Research model and hypotheses Research model is built specifically as in the figure below. Proceeding from the research model, 08 research hypotheses are developed. Figure 6: Theoretical research model 2.3.9.2. Research variables and scales In this study, there are 08 independent variables that are related to competitive renovation under the conditions of applying competitive neutrality policy, including: (i) Research and selection of target markets; (ii) Pricing strategy; (iii) Product strategy; (iv) Accompanied service strategy; (v) Channel strategy; (vi) Trade promotion strategy; (vii) Communication strategy; and (viii) A number of complementary issues. These independent variables are measured by the assessment of Vietnamese SOE managers on the status of factors and their impact on the performance of production and business activities of SOEs according to a 5-point Likert scale. 2.4. International experiences and lessons for Vietnam 2.4.1. International experiences The thesis studies the experiences of countries with conditions quite similar to Vietnam's economic characteristics and economic development level (such as China, Malaysia); or having been a pioneer in applying completive neutrality and renovation policies of SOEs (such as Australia). 2.4.2. Lessons for Vietnamese SOEs Some lessons of experience can be drawn are as follows: Firstly, product strategy is a strategy at the heart of the overall competition strategy of SOEs. Secondly, under the conditions of applying competitive neutrality policy, most SOEs have consciously formulated and selected product distribution strategies, diversified distribution channels and established The production and business performance of the enterprise H2 H3 H4 H5 H6 H8 Pricing strategy (X2) Product strategy (X3) Accompanied service strategy (X4) Distribution strategy (X5) Trade promotion strategy (X6) Communication strategy (X7) Complementary factors (X8) H7 H1 Research and selection of target markets markets(X1) distribution networks themselves both at home and abroad. Thirdly, SOEs of these countries regularly organize training courses for their officials and employees, enabling them to improve their knowledge and skills to serve their jobs. CHAPTER 3: THE SITUATION OF COMPETITIVE RENOVATION OF SOES UNDER THE CONDITIONS OF APPLYING COMPETITIVE NEUTRALITY POLICY IN VIETNAM 3.1. Overview of SOEs and the issue of competitive neutrality in Vietnam 3.1.1. Overview of Vietnamese SOEs - About the operations of Vietnamese SOEs: Up to now, Equitization of State-owned enterprises has still been at a low speed. The total capital of SOEs increased from VND 3,702 trillion in 2010 to VND 9,089 trillion in 2018. Despite an increase of 2.46 times in the total production capital of SOEs during the period 2010-2018, the growth rate of revenue and profit was not commensurate with the extent of asset value expansion. In the period 2010 - 2018, the total number of employees working in SOEs decreased remarkably. - About type: The first type includes Vietnamese SOEs established in one of the two forms: (1) Corporations 91 and (2) State-owned enterprises (also known as Corporations 90). The second type includes SOEs established under the State Enterprise Law (2003). - SOEs’ advantages: SOEs have certain advantages such as access to capital sources, state-guaranteed corporate bonds or foreign exchange with lower interest rates; to be allocated or leased land with a lower interest rate - State management over SOEs: As the owner of SOEs, the State has the right to decide on the establishment of SOEs; the decision to merge, split or dissolve SOEs in compliance with the principles and time limit prescribed by the government 3.1.2. Issue of competitive neutrality in Vietnam With the aim of creating an environment free and equal for competition, the State has promulgated a competition law policy to regulate competition activities of entities participating in the market. Broadly, the system of legal documents all refers to a certain competition aspect of competitive neutrality. However, these are not the issues that have been systematically regulated and can ensure that SOEs will operate in accordance with market rules. Eliminating of the unreasonable competitive advantages of SOEs over private enterprises has not been set out as these enterprises still have to implement many strategic orientations of the State. 3.1.3. Research approach on the competitive situation of SOEs in Vietnam 3.1.3.1. Quantitative research In this study, quantitative methods were conducted through questionnaire survey. The survey questionnaire was designed to gather opinions of SOE managers who are carrying out competitive renovation activities in Vietnam. The questionnaire was delivered directly and via email to the survey participants. We delivered 220 questionnaires to the SOE managers in Vietnam. The number collected was 212, of which 04 invalid due to missing questions. So, the total number valid for the study was 208. - Survey sample Broadly, Vietnamese SOEs participating in the survey have mainly operated between 05 and less than 15 years, accounting for 34.62%. Most of these enterprises are 100% State- owned (59.62%); enterprises operate principally in the areas of commerce and service (37.50%), industry and construction (28.37%). The number of key employees in Vietnamese SOEs ranges between 50 &299 people, accounting for 31.25%. The revenue of the most recent fiscal year of these enterprises is mostly from VND 50 to less than 200 billion. - Tested through EFA & CFA The results of EFA analysis showed that coefficient KMO value was 0.853 and Sig. less than 0.05, proving that the EFA factor is practically significant and appropriate. Cumulative % has the value of 80.929 > 50%, showing that 80.929% of the analyzed data identifies 08 independent variables, including: (i) Research and selection of target markets; (ii) Pricing strategy; (iii) Product strategy; (iv) Accompanied service strategy; (v) Channel strategy; (vi) Trade promotion strategy; (vii) Communication strategy; and (viii) A number of complementary issues. The study continues using the method of analyzing the reliability of the scale through Cronbach's Alpha tool to test the reliability of the independent variables identified. Table 3: Testing Cronbach’s Alpha coefficients and Bartlett’s Test Cronbach’s Alpha KMO and Bartlett's Test Research and selection of target markets 0.899 0.776 Pricing strategy 0.840 0.778 Product strategy 0.933 0.788 Accompanied service strategy 0.803 0.745 Channel strategy 0.937 0.738 Trade promotion strategy 0.939 0.775 Communication strategy 0.919 0.722 A number of complementary issues 0.930 0.837 Performance 0.883 0.723 Source: Processing survey data using SPSS 22 It can be seen that the Cronbach’s Alpha value of the independent variables is in the range (0.8: 0.9), showing that the scale has good reliability. The value of KMO and Bartlett's Test is greater than 0.5, proving that the CFA test in this study is practically significant. The observed variables weighted CFA results all meet the allowable standard (>= 0.5) and are statistically significant, p values = 0.000. Thus, it can be concluded that the observed variables used to measure 08 competitive renovation contents of SOEs under the conditions of applying competitive neutrality policy in Vietnam achieve convergent value. - Correlation analysis Table 4: Correlation analysis between the independent variables in the research model X1 X2 X3 X4 X5 X6 X7 X8 X1 1 0.419** 0.494** 0.025 0.518** 0.078 0.194** 0.475** X2 1 0.564** 0.039 0.631** 0.081 0.182** 0.611** X3 1 0.071 0.580** 0.035 0.082 0.509** X4 1 0.018 0.073 -0.014 -0.111 X5 1 0.212** 0.092 0.595** X6 1 0.054 0.057 X7 1 0.092 X8 1 Note: ** The correlation is significant at 0.01 Source: Processing survey data using SPSS 22 The results above show that Pearson's correlation coefficient is statistically significant between pairs of fluctuations in the range of -0.111 to 0.631 (<0.7), allowing to confirm the differential value between the independent variables or research concept achieved with 95% confidence; multicollinearity between independent variables in the research model can be eliminated. - Results of regression analysis and hypothesis testing The detailed results of regression analysis are shown in the following Table: Table 5: Results of regression analysis Model Unstandardized Coefficients t Sig. Collinearity Statistics B Std. Error Tolerance VIF (Constant) 0,000 0,037 0,000 1,000 Research and selection of target markets 0.249*** 0,046 5,405 0,000 0,633 1,581 Pricing strategy 0.110** 0.054 2.046 0.042 0.470 2.128 Product strategy 0.125** 0.050 2.518 0.013 0.545 1.833 Accompanied service strategy 0.102** 0.038 2.718 0.007 0.951 1.051 Channel strategy 0.297*** 0.055 5.357 0.000 0.438 2.283 Trade promotion strategy 0.093** 0.038 2.453 0.015 0.933 1.072 Communication strategy 0.096** 0.038 2.527 0.012 0.936 1.069 A number of complementary issues 0.230*** 0.052 4.448 0.000 0.503 1.987 R = 0.856 R Square = 0.732 Adjusted R Square = 0.721 F = 67.935 p value = 0.000 * statistically significant at 5%; ** statistically significant at 1%; *** statistically significant at 0.1% From the results of regression analysis, the study analyzes the impact of factors related to competitive renovation of SOEs under the conditions of applying competitive neutrality policy in Vietnam on the production and business operation of SOEs as follows: Research and selection of target markets has a direct positive impact on the performance of production and business activities of SOEs with the confidence threshold of 99% (with B value = 0.249, Sig. = 0.000). This result allows to confirm that hypothesis 1 is correct. Pricing strategy has a direct positive impact on the performance of production and business activities of SOEs with the confidence threshold of 99% (with B value = 0.110 and Sig. = 0.042. Therefore, hypothesis 2 is accepted. Product strategy has a direct positive impact on the performance of production and business activities of SOEs with the confidence threshold of 99% (with B value = 0.125; Sig. = 0.013). Therefore, hypothesis 3 is confirmed. Accompanied service strategy has a direct positive impact on the performance of production and business activities of SOEs with the confidence threshold of 99% (with B value = 0.102 and Sig. = 0.007. This result allows confirming hypothesis 4. Channel strategy has a direct positive impact on the performance of production and business activities of SOEs with the confidence threshold of 99% (with B value = 0.297 and Sig. = 0.000). Therefore, hypothesis 5 is accepted. Trade promotion strategy has a direct positive impact on the performance of production and business activities of SOEs with the confidence threshold of 99% (with B value = 0.093, Sig. = 0.015). On that basis, hypothesis 6 is confirmed correct. Communication strategy has a direct positive impact on the performance of production and business activities of SOEs with the confidence threshold of 99% (with B value = 0.096; Sig. = 0.012). Therefore, hypothesis 7 is accepted. A number of complementary issues have a direct positive impact on the performance of production and business activities of SOEs with the confidence threshold of 99% (with B value = 0.230; Sig. = 0.000). This result allows confirming that hypothesis 8 is correct. 3.1.3.2. Case study We chose 02 typical SOEs: (i) The national airline of Vietnam - Vietnam Airlines in the field of passenger air transport and (ii) Vietnam Military Telecommunications Group (Viettel) in the field of telecommunications for research. 3.2. The competitive renovation situation of state-owned enterprises 3.2.1. Regarding Research and selection of target markets of SOEs In the activities of collecting market information of enterprises, there are positive and effective renovations in the methods and intensity of access, achieving an average score of 3.43/5. Despite the positive and effective renovation processing, analyzing, assessing market information of enterprises in recent times, the average score achieved in these activities has only been restricted to 2.95 points on a 5-point scale. Not only that, the market research of SOEs was not organized and implemented scientifically and methodically, but mainly based on the views and experiences of the staff who conducted the survey. Besides, activities to support market positioning such as market research, customer data banking, information about the market economy, society, the population... also revealed many limitations. 3.2.2. Regarding Pricing strategy of SOEs In the pricing methods at present, up to 46.15% of SOEs apply the method of pricing based on competition. Survey results show that this activity in these enterprises is done by a very simple method, lacking information and passive before price fluctuations in the market. Further, in the matters related to Pricing strategy, the selected pricing method in line with the current situation and is built and implemented in a clear and transparent manner is the matter that got the lowest average score of 2.85/5 points. 3.2.3. Regarding Product strategy of SOEs SOEs have paid attention to the quality of the products they are selling. Besides the positive aspects, the Product strategy of SOEs also reveals many limitations. Currently, quite a few SOEs implement many measures to renovate designs, patterns, packages of their products and services to meet the increasing demand of customers. Therefore, this opinion was given the highest score among the 04 product criteria of 3.4 points on a 5-point scale. SOEs have focused on building brands and trademarks to ensure the competitiveness of their products. 3.2.4. Regarding Accompanied services of SOEs Currently, SOEs' accompanying service strategy is not really good, since this is still taken lightly by many entities. Therefore, the survey results of 208 SOEs show that the Accompanied service strategy of these enterprises is still weak. SOEs have paid attention to renovating and developing the supply of accompanied services on the basis of complementing and improving capacities, features or perfecting the key products and services but the efficiency is not yet high. Due to the lack of financial and economic conditions to improve accompanied services, that SOEs have strengthened training and improved service capacity of frontline staff did achieve initial satisfactory results but still reveal many limitations. 3.2.5. Regarding Channel strategy of SOEs Currently, SOEs mainly use two forms, i.e. indirect distribution channels through intermediaries (accounting for 36.54%) and combined distribution channels (35.58%). Survey results show that SOEs nowaday