Factors affecting Effectiveness of Petroleum Market Development of CAGICO in Ho Chi Minh City and the Neighboring Provinces, Vietnam : Masters of Business Administration

MEIHO UNIVERSITY

Graduate Institute of Business and Management

MASTER THESIS

Factors affecting Effectiveness of Petroleum

Market Development of CAGICO in Ho

Chi Minh City and the Neighboring

Provinces, Vietnam

In partial fulfillment of the requirements for the degree of

Masters of Business Administration

Advisor: Dr. Kuo-Hung Tseng

Co-advisor: Dr. Nguyen Trung Truc

Graduate Student: Nguyen Duc Thao

December, 2010

I

ACKNOWLEDGMENTS

At first, I would like to say many thanks so much to the Boards of Rector of both

Meiho University, Taiwan and Ho Chi Minh City University of Industry, Vietnam for

giving me the opportunity participating EMBA program in the last two years.

Secondly, I would like to express my great thanks to Prof. & Dr. Kuo-Hung Tseng,

Chair of Graduate Institute of Business and Management, Meiho University, Taiwan; Dr.

Nguyen Trung Truc, Professor of Business Administration Faculty, Ho Chi Minh City

University of Industry, Vietnam for useful guide and advice to finish the thesis.

Special thanks to Associate Prof. & Dr. Nguyen Minh Tuan, lecturer of Department

of Business Administration, Ho Chi Minh City University of Industry; Dr. Wei-Shuo Lo,

Head of Department of Finance, Meiho University for much valuable remarks and

evaluation on my thesis.

Many thanks to Professors and Administrative Staffs of both of universities, EMBA2

classmates, and colleagues at CAGICO for helps, supports and encouragement throughout

the study duration.

Sincerely thank to Mr. Nguyen Quang Vinh, PhD candidate at the National Sun Yat￾sen University, College of Management, Taiwan for consulting and sharing experience of

doing research.

Finally, a deep thanks to my wife, my children and family’s people for all things

sacrified to my study during the last two years, when I was in Vietnam and in Taiwan. So

much appreciation to all of you!

II

Factors affecting Effectiveness of Petroleum

Market Development of CAGICO in Ho Chi Minh

City and the Neighboring Provinces, Vietnam

ABSTRACT

Can Gio Trading Services Joint Stock Company (CAGICO) is a 40 percent-state￾owned company. However, 96 percent of total sales revenues were from doing petroleum

business. Innovation process accompanying with global integration and national

economic development have created fierce competition among enterprise doing

petroleum business. The Company 2009 Annual Report has clearly identified some

strategic and managerial problems in which petroleum market development strategy was

paid much attention by top management.

By clarifying such effects via Internal Factor Evaluation (IFE) matrix and external

factors via External Factor Evaluation (EFE) matrix as well as via SWOT matrix, the

research findings showed that external factors as Economy, Social-Cultural￾Demographic-Environmental, Political-Governmental-Legal, Technology and

Competition have positive significant effect on the development of petroleum market of

CAGICO. The research also showed that internal factors as Personnel Management,

Marketing, Finance/Accounting, Production/Operation, Research & Development and

Management information system have positive significant effect on the development of

petroleum market of CAGICO. However, only the external factors including

Society/Culture Demography/Geography and Competition caused significant effects on

Effectiveness. Furthermore, only two internal factors including Management and

Research & Development caused significant effects on Effectiveness. In conclusion, there

are four factors have a significant effects on the Effectiveness of petroleum market

development. The corresponding strategies designed according to the analysis of TOWS

matrix are 1) Implying good management to take advantages of current Society-Culture￾Demography-Geography; 2) Implying good management to against competition; 3)

Society-Culture-Demography-Geography promotes the development of R&D; and 4)

Investing more to R&D to other product and service that other competitors do not offer.

Keywords: CAGICO, petroleum business, strategy, market development, SWOT analysis

III

Factors affecting Effectiveness of Petroleum

Market Development of CAGICO in Ho Chi Minh

City and the Neighboring Provinces, Vietnam

Contents

ACKNOWLEDGMENTS .........................................................................................................I

ABSTRACT..............................................................................................................................II

Contents .................................................................................................................................. III

Tables....................................................................................................................................... V

Figures....................................................................................................................................VII

Chapter 1 Introduction .............................................................................................................. 1

1.1 Research Motivation ....................................................................................................... 1

1.2 Research Purpose............................................................................................................ 2

1.3 Research Scope and Limitations..................................................................................... 2

1.4 Definition of Terms ........................................................................................................ 3

Chapter 2 Literature Review..................................................................................................... 4

2.1 Strategic Management and Market Development Strategy ............................................ 4

2.2 External Environment ..................................................................................................... 5

2.2.1 Vietnam economic environment.............................................................................. 7

2.2.2 Vietnam social, cultural, demographic, and environmental forces.......................... 8

2.2.3 Vietnam political, governmental, and legal forces. ................................................. 8

2.2.4 Vietnam technological forces. ................................................................................. 9

2.2.5 Vietnam competitive forces. .................................................................................. 10

2.3 Internal Environment .................................................................................................... 12

2.3.1 Personnel Management.......................................................................................... 13

2.3.2 Marketing............................................................................................................... 14

2.3.3 Finance/Accounting. .............................................................................................. 15

2.3.4 Production/Operation............................................................................................. 16

2.3.5 Research and Development (R&D). ...................................................................... 17

2.3.6 Management Information System.......................................................................... 17

2.4 Threats – Opportunities – Weaknesses – Strengths (TOWS) Matrix........................... 18

2.5 Effectiveness of Development of Petroleum Market.................................................... 20

Chapter 3 Research Methodology........................................................................................... 21