OVERVIEW ABOUT STRATEGIC PLANNING AND STRATEGIC MANAGEMENT
Theories about building and managing strategy
1.1.1 Concept about strategy and strategic management
The term "strategy" has evolved significantly over time, originally emerging in the military domain before transitioning to politics Since the 1950s and 1960s, the concept has found application in socio-economic contexts as well Generally, strategy refers to the approaches and methods employed to address specific tasks with a comprehensive and long-term perspective, as noted by the United Nations Industrial Development Organization (UNIDO).
A development strategy serves as a blueprint for achieving specific goals over a 10 to 20-year period, guiding planners in the effective mobilization and allocation of resources It outlines a vision for the anticipated development process and ensures consistency in implementation methods Additionally, a strategy can form the basis for a comprehensive development plan, whether for the short term, midterm, or as a general framework, without imposing strict obligations on stakeholders regarding future outlooks, challenges, and satisfaction levels.
Generally, concepts and definitions about strategy, despite being different in expression, always cover following contents:
+ To define short term and long term goals of enterprise.
+ To propose and select predetermined plans.
+ To conduct and distribute resources aimed at implementing those goals.
Effective leadership in a company requires not only a solid understanding of strategy but also the ability to manage it and make informed decisions When executed properly, this approach is referred to as strategic management Strategic management encompasses a series of decisions and actions that arise from planning, implementing, and evaluating strategies, all aimed at achieving long-term success.
1.1.2 The role of building strategy for enterprise
Research indicates that enterprises with a clear business strategy are more likely to develop effective action plans compared to those without a defined strategy A business strategy serves as a guiding framework, enabling companies to achieve their predetermined goals while aligning short-term objectives with long-term vision The development of a business is both compatible and comprehensive, and the benefits of strategic management have been studied across various countries, industries, and companies of different sizes In summary, there are three key features of successful business strategies.
- Business strategy and strategic management help enterprise have specific action program to gained predetermined goals.
- Business strategy helps enterprise define central goals.
- Business strategy helps enterprise have specific and in time measures meeting changes in business environment.
To achieve significant gains, enterprises must conduct a comprehensive analysis of their position, role, internal characteristics, and the opportunities and threats present in their business environment.
In addition to remarkable gains brought by business strategy, business strategy and strategic management also hide certain risks.
Strategic managers face the risk of misallocating time and resources, which can disrupt the balance of enterprise operations When they prioritize extensive planning and implementation of strategies, they may neglect other critical activities, ultimately affecting overall performance It is essential for strategic managers to effectively manage their time to ensure a well-rounded approach to both strategy development and operational tasks.
Enterprises pursue various goals, and relying solely on one strategy is insufficient for achieving success Consequently, businesses often implement multiple strategies simultaneously However, some of these strategies may conflict with one another; for example, a focus on lowering costs can negatively impact product quality Therefore, it is essential for administrators to integrate these strategies effectively to prevent any potential conflicts and ensure cohesive progress.
Strategic management carries the risk of errors made by strategic managers, as the effectiveness of a well-defined strategy is crucial for driving growth and market expansion A strategy grounded in objective and rational analysis may fail to align with the broader goals of the enterprise, which can significantly impact the company's long-term development.
Steps of researching strategy
Macro environment factors such as economic, political, social, and technological elements significantly influence a company's operations, either independently or in conjunction with one another In the context of the banking sector, these factors play a crucial role in shaping industry dynamics and performance.
The economic environment significantly affects a bank's operations, with key influences including interest rates, the economic cycle, CPI inflation, GDP, balance of payments, and fiscal and monetary policies Given the broad nature of these factors, businesses should focus on identifying the specific economic elements that have the most direct impact on their activities.
The bank serves as a crucial financial intermediary, significantly impacting the national financial system and therefore facing stricter state regulations compared to other sectors Political factors increasingly influence banking operations, including government policies, legal frameworks, diplomatic trends, and broader political events both domestically and internationally.
Stability of politics Labor law Tax law…
The socio-cultural environment encompasses the norms and values upheld by a society or culture, and its changes occur more gradually than those of other macroeconomic factors due to their long-term impact Administrators should be aware that the influence of socio-cultural factors is often subtle and challenging to identify, yet it significantly shapes how individuals live, work, produce, and consume products and services.
The technological landscape presents both opportunities and challenges for banks, as the rapid introduction of new technologies enhances competitive advantages for alternative products while jeopardizing traditional offerings This technological explosion renders existing solutions obsolete, compelling banks to innovate in order to maintain competitiveness Additionally, the accelerated pace of technological advancements shortens the technology life cycle, intensifying the pressure on banks to reduce depreciation periods and adapt swiftly to evolving market demands.
Source: Strategic Management, Fred, David
The micro environment is characterized by specific sectors that influence enterprises within an industry In the banking sector, key factors include rivals, buyers, suppliers, new entrants, and substitute products, all of which play a crucial role in shaping the competitive landscape.
In today's landscape of increasing integration, competition among banks and financial institutions, including insurance companies and finance firms, is intensifying Understanding competitors is crucial for banks, as it influences the nature and extent of competition and provides strategic insights for gaining a competitive edge.
The intensity of competition in the banking sector is influenced by several key factors, including the number of participating banks, the industry's growth rate, and the fixed cost structure alongside product diversification These elements heighten banks' motivation to attain and safeguard their market share, resulting in increasingly fierce competition.
In a competitive landscape, buyers play a crucial role as their trust becomes one of a bank's most valuable assets This trust is built upon the bank's ability to meet customer demands and preferences effectively, distinguishing itself from competitors.
Suppliers: Banks must have relationship with organizations supplying different resources such as material, equipment, labor and finance
New entrants in the banking industry can contribute to declining profits as they leverage new production capacities to gain market share and essential resources Their strategy often includes acquiring other firms to enhance their market presence, highlighting their aggressive approach to competition.
Substitute products: Pressure from substitute products controls earning potential of industry since the highest price is under control Most of the new substitute products are
Bargaining power of buyers Bargaining power of suppliers
Substitute products resulted from technological break out In order to have success, banks must pay attention and spend suitable resources to develop or apply new technologies into their strategy.
Source: Strategic Management, Fred, David
Figure 1.2: Michael Porter’s five force model
Analyzing the internal environment of a bank involves examining the factors and systems that influence its operations and strategic feasibility Key internal elements include human resources, technology, organizational structure, policies, services, and financial conditions To ensure the effectiveness of a strategy, it is essential to assess the current situation, identify strengths and weaknesses, and recognize the bank's competitive advantages This internal analysis focuses on various aspects of the bank's activities to inform strategic decision-making.
Human resources are a crucial and irreplaceable element in any organization, significantly influencing competitiveness through factors such as training, qualifications, motivation, and employee engagement The effectiveness of human resources is vital at every stage of strategy development, implementation, and monitoring, highlighting their essential role in organizational success.
The financial status of an organization, particularly in the banking sector, is crucial as it reflects both past performance and future development potential Key financial indicators used for analysis include the current ratio, quick liquidity ratio, leverage ratios, operational efficiency metrics, and profit capacity indicators These metrics are essential for assessing the effectiveness and capability of banks, guiding strategic decisions and ensuring sustainable growth.
The facilities include transaction office and transaction point system, equipments serving customers, internal equipments such as payment system and computer network system
Technology is a critical component of banking infrastructure, enhancing operational efficiency and service accuracy Automated machinery and equipment significantly reduce processing times, leading to improved customer convenience Additionally, technology serves as the backbone for modern banking services, encompassing management information systems and risk reporting systems that optimize internal operations.
Organizational culture is vital for shaping the identity of banks, as it helps members understand shared goals and perspectives By fostering a strong culture, banks can motivate their employees to work collaboratively towards achieving common objectives.
Tools used to analyze and select strategy
The analysis and selection of a strategy involves making informed decisions based on subjective information to identify the most effective operational processes for a bank By aligning current strategies, objectives, and the bank's mission with both internal and external data, a solid foundation is established for developing and evaluating feasible strategic options.
In today's strategic analysis landscape, various popular matrices are utilized, including the BOSTON matrix, G.E matrix, GS matrix, and SWOT matrix This capstone project will specifically concentrate on the Internal and External Evaluation Factor Matrix (I.E) and the SWOT matrix for in-depth analysis.
1.3.1 Internal Factor Evaluation Matrix (IFE)
Internal evaluation factor matrix (IFE) summarizes important strengths and weaknesses of business departments as well as overall enterprise IFE matrix is developed in five steps:
Step 1: Make a list of factors crucial to the competitiveness of enterprises in an industry (usually from 10 to 20 factors).
Step 2: Assign a weight from 0.0 (not important) to 1.0 (most important) for each factor It should be noted, the importance assigned to the factors show relative importance of those for the success of the enterprises in industry Thus, for enterprises in the industry, the importance of factors listed in step 1 is the same.
Step 3: Assign a rating from 1 to 4 for each factor (actually point to a wider range) Mark the biggest weakness when sorting by one, the smallest weakness when sorting by 2, the minimum strength as classified by 3 and biggest strengths when sorting by 4 So, this is the point of reflecting competitiveness of each factor in enterprise against rivals’.
Step 4: Calculate weighted score for each factor by multiplying the weight of that factor with the corresponding rating.
Step 5: The total weighted score for all factors in the matrix is given by summing the number of relevant factors of each enterprise The total score shows that, this is the absolute competitiveness of enterprises.
The total weighted scores in the Internal Factor Evaluation (IFE) matrix indicate a company's competitiveness: a score of 4 signifies absolute competitiveness, while scores between 2.50 and 4 reflect above-average competitiveness Conversely, a score below 2.50 indicates that the enterprise's competitiveness is below average.
1.3.2 External Factor Evaluation Matrix (EFE)
The External Factor Evaluation (EFE) Matrix is a valuable tool for summarizing and quantifying the impact of external environmental influences on a business To effectively analyze the EFE, we follow a structured five-step process, similar to that of the Internal Factor Evaluation (IFE) Matrix.
Step 1: Make a list of factors crucial to the competitiveness of enterprises in an industry (usually from 10 to 20 factors).
Step 2: Assign the a weight from 0.0 (not important) to 1.0 (most important) for each factor It should be noted, the importance assigned to the factors show relative importance of those for the success of the enterprises in industry Total importance of factors listed is 1.
Step 3: Assign a rating from 1 to 4 for each factor (actually point to a wider range) Mark the biggest weakness when sorting by one, the smallest weakness when sorting by 2, the minimum strength as classified by 3 and biggest strengths when sorting by 4 So, this is the point of reflecting the adaption of enterprise to threats and opportunities from environment.
Step 4: Calculate score for each factor by multiplying the importance of that factor with the corresponding classification scores.
Step 5: The total weighted score for all factors in the matrix is given by summing the number of relevant factors of each enterprise.
In the IFE matrix, a total weighted score of 4 indicates absolute competitiveness for an enterprise Scores ranging from 2.50 and above suggest that the enterprise is competitively strong on average Conversely, if the total score falls below 2.50, it signifies that the enterprise's competitiveness is below average.
SWOT, which stands for Strengths, Weaknesses, Opportunities, and Threats, is a strategic analysis model developed from a study of over 500 high-revenue enterprises by Fortune and conducted at the Stanford Research Institute during the 1960s and 1970s This research aimed to uncover the reasons behind the failure of many businesses in executing their plans, with contributions from experts such as Marion Dosher, Ts Otis Benepe, Albert Humphrey, Robert Stewart, and Birger Lie The SWOT model outlines four key strategies: (1) SO (Strengths-Opportunities) leverages an enterprise's strengths to capitalize on market opportunities; (2) WO (Weaknesses-Opportunities) focuses on overcoming weaknesses to seize market opportunities; (3) ST (Strengths-Threats) utilizes strengths to mitigate market threats; and (4) WT (Weaknesses-Threats) aims to address or control weaknesses to avoid potential market threats.
Use strengths to make use of opportunities
Overcome weaknesses by making use of opportunities
Use strengths to avoid threats
Minimize weaknesses and avoid threats
Source: Strategic Management, Griggs University 1.3.4 QSPM matrix
The Quantitative Strategic Planning Matrix (QSPM) is a strategic tool designed to assess various alternative strategies By systematically organizing earlier stage information, the QSPM calculates scores for multiple strategies, helping organizations identify the most suitable strategy for their needs.
The QSPM comes under the third stage of strategy formulation which is called
The Decision Stage is the final phase of the QSPM process, which uniquely avoids relying on assumptions by extracting data from the Input Stage and the Matching Stage The Input Stage utilizes tools like the EFE Matrix, IFE Matrix, and CPM, while the Matching Stage incorporates the TOWS Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and Grand Strategy Matrix By integrating intuitive managerial insights with a structured analytical approach, QSPM enables organizations to identify the most effective strategies for success.
Table 1.2: Quantitative Strategic Planning Matrix
Chosen strategies Base of score
Source: Strategic Management and Competitive Advantage: Concepts, Prentice
The QSPM (Quantitative Strategic Planning Matrix) consists of four primary columns The leftmost column lists key internal and external factors, mirroring those found in the EFE (External Factor Evaluation) and IFE (Internal Factor Evaluation) matrices Next to these factors is the Weight column, which represents the relative importance of each factor, derived from the corresponding weight values in the EFE and IFE matrices Following the Weight column is the Attractive Score (AS), where factors are prioritized numerically from 4 (most important) to 1 (least important) The final column, Total Attractive Score (TAS), is calculated by multiplying the Weight by the AS It is crucial to note that while the AS and TAS values may differ for each strategy, the Weight remains consistent across all strategies listed in the QSPM The top section of the matrix facilitates the comparison of strategies, while the table below exemplifies the QSPM structure.
Strategy building and choosing key strategies
A well-defined strategy encompasses a set of policies and effective solutions that enable a company to coordinate its actions and achieve its objectives Each business has the potential to establish a competitive advantage through various operational routines, such as delivering superior quality, providing exceptional service, minimizing costs, or targeting specific market segments.
A company can adopt various strategies over time, focusing on specific areas while reducing efforts in others These targeted activities are designed to effectively achieve the company's overall objectives during the strategy implementation phase.
The selection of the most suitable business strategy is influenced by the company's capabilities and environmental factors By analyzing the SWOT and QSP matrices, the company can identify and adopt the optimal strategy that aligns with its strengths and market conditions.
ANALYZING BUSINESS ENVIRONMENT OF PETRO VIETNAM
Overview of PVEP Song Hong
Petro Vietnam Exploration Production Song Hong (PVEP Song Hong) originated from PVEP Thai Binh, established under decision no 2011/QD-DKNV on August 22, 2007, by the President of Petro Vietnam to restructure PVEP Thai Binh as a member of Petro Vietnam Exploration and Production PVEP Song Hong is a state-owned company operating as a limited liability company, fully funded by Petro Vietnam Exploration and Production, and is located in Thai Binh city, Thai Binh province.
With over 25 years of experience, PVEPP Song Hong has successfully enhanced the exploration capabilities of its parent company in Northern regions In light of industrialization and globalization, the company recognizes the necessity for a new business development strategy and has already taken proactive steps toward establishing this strategy by 2015.
The company currently manages and explores 7 gas wells and 4 petro wells, reaching exploration depths of 400-450 meters With a highly experienced team in gas and oil exploration, the company is committed to becoming a key player in PVEP and expanding its operations throughout the North Additionally, it offers petro services, including consulting for exploration and exploitation, as well as pipeline installation.
PEVPPVEP Song Hong is the only company in the North which can manage all processes of exploration and production gas and oil Recently, company’s main responsibilities are:
The Tien Hai industrial Zone in Thai Binh is set to benefit from the exploration and provision of natural gas, aimed at enhancing the production of glass ceramic and construction materials This initiative involves sourcing gas and oil from several key mines, including Tien Hai “C”, D15-STL, and Dong Quan D.
- Manage projects and cooperate to explore and exploit oil and gas in Mien Vong Hanoi.
- Provide petro services: consulting to explore and exploit petro company, consulting to install pipelines, etc.
PVEP Song Hong effectively manages its responsibilities by organizing operations in an efficient and logical manner The organizational structure promotes safety and connectivity among sections while fostering independence and creativity within teams This clear organizational chart is detailed in Table 2.1 below.
Source: General Affair section, PVEP Song Hong
Figure 2.1: PVEP Song Hong’s organization chart
PVEP Song Hong operates as a state-owned enterprise, adhering to company regulations, business laws, and relevant legal standards With a streamlined and efficient organizational structure, the company is poised to implement a new development business strategy.
Analyzing PVEP Song Hong business environment
2.2.1.1 Macro environment analysis (PETS model)
Vietnam is currently experiencing a period of integration and development, marked by high political stability that fosters a favorable business environment for enterprises The Vietnamese government recognizes the crucial role of small and medium enterprises (SMEs) in the economy and consistently implements supportive policies to promote their growth and development.
Small and medium enterprises (SMEs) are crucial to economic and social development, representing 97% of registered businesses They significantly contribute to job creation, enhance employee income, mobilize social resources for development investments, and play a vital role in boosting the State budget.
Small and medium enterprises (SMEs) require minimal initial investment but play a crucial role in fostering development across urban and rural areas by engaging diverse industries They leverage available resources, enabling significant participation from the population and promoting a competitive market Consequently, government support policies are in place to enhance the growth of SMEs, encompassing assistance with policy frameworks, access to capital, and legal guidance for business operations.
Petro Vietnam recognizes the pivotal role of the petrochemical industry in national development and has established a clear development orientation to foster a supportive environment for its members Key initiatives include the implementation of a human development program initiated in 2008 and the establishment of Petro University, alongside specific development targets set for achievement by 2015.
In searching and exploring: The volume will reach to 35-45 million tons oil/years in the period of 2011 to 2015 In which, domestic exploration: 25-30 million tons and foreign 10-15 million tons/year
The focus is on enhancing oil recovery factors and maximizing exploration volume, with investments directed towards international exploration efforts The goal is to increase exploration volumes to between 25-38 million tons per year, comprising 18-20 million tons of crude oil and 8-19 billion cubic meters of gas annually This strategy is part of a broader initiative that began in 2012.
2015 the company will maintain about 20 gas and oil mines with the exploration volume of 18-19 million tons oil and 9-14 billion m 3 gas
By 2015, the company aims to complete the construction of 3-5 oil refineries, achieving a production capacity of 26-32 million tons per year, along with 1-2 basic petrochemical plants By 2025, the company is projected to meet approximately 50% of the country's oil demand.
By 2015, the petro services group aims to achieve an annual turnover growth rate of 15-20% From 2016 to 2025, this sector is projected to experience an even more significant increase, with turnover expected to rise by 20-25% each year.
In recent years, global political dynamics have experienced significant fluctuations, particularly regarding territorial disputes in the Eastern Sea involving China and nations like Vietnam This situation poses substantial challenges for the country and enterprises engaged in activities such as oil and gas exploration, as well as fishing, in the continental shelf area.
Economic statement of the country: Viet Nam’s economic situation in recent years has many deep changes Two main transforms that affect the development of enterprises are:
The trend of global economic integration is becoming increasingly significant, highlighted by Vietnam's accession to the World Trade Organization in 2007, which marked a pivotal moment in the integration of the world economy.
The global financial crisis, originating from the United States and Europe, has impacted economies worldwide, leading to a slowdown in Vietnam's GDP growth to 6-7% annually Despite these challenges, Vietnam's ability to maintain economic growth demonstrates the concerted efforts of both the government and enterprises in overcoming the crisis and striving for continuous improvement.
Source: Statistical Yearbook in 2000 – 2010, Statistical Publishing House
Figure 2.2: Vietnam’s GDP growth rate in recent years
Amid the challenges posed by the financial crisis, Vietnam's economy remains committed to development, despite facing uncertainties such as inflation, rising interest rates, and budget deficits In response to the global financial crisis, the government is actively working to foster a conducive environment for businesses, aiming to enhance performance and support the goals of industrialization and modernization.
Between 2006 and 2010, despite facing challenges from the financial crisis and fiscal tightening, Thai Binh province maintained an impressive average GDP growth rate of approximately 12.5% per year, with an average income of 20.68 million VND in 2011 Looking ahead, Thai Binh aims to achieve a GDP growth target of 11.5% from 2012 to 2015, while increasing the average income to 25 million VND, aligning with the national industrialization efforts.
In 2012, the growing economy significantly increased the demand for gas and oil, presenting an opportunity for PEVPPVEP Song Hong to expand its operations Alongside the rise in GDP, the province is focused on transforming its economic structure to enhance the proportion of industry and service sectors, as illustrated in the accompanying figure.
Source: Development orientation for Thai Binh till 2015, Thai Binh investment and planning section
Figure 2.3: Economic structure changing in Thai Binh from 2010-2015
Thai Binh province's economic focus on industrial and service development has fostered a conducive environment for enterprise growth, particularly for PVEP Song Hong This business expansion aligns with the province's strategic development orientation during this period.
The Consumer Price Index (CPI) in Vietnam has experienced significant fluctuations, with an annual increase of 18% This instability in prices presents challenges for PEVPPVEP Song Hong as it formulates its company strategy Consequently, managing CPI variations is a crucial aspect that the company must address in its development plans.
SWOT analysis for PVEP Song Hong
InfrastructurInfrastructure facilities and advanced technology and exploiting equipment
With over 30 years of experience in oil and gas exploration, PVEP Song Hong stands out as a leading company within PVEP Corporation, specializing in exploration, consulting, and pipeline construction in South Vietnam Equipped with advanced technology and a robust management system for its wells, the company is well-positioned to tap into the region's significant oil and gas potential, indicating promising future expansion Among the 53 companies in the group, PVEP Song Hong consistently receives substantial support from both PVEP and local government, which is crucial for its development strategy aimed at increasing turnover This backing creates significant opportunities for PVEP Song Hong as it continues to progress in the industry.
Company’s long-term historical development and support from mother PVEP Copporation
With over 30 years of experience in oil and gas exploration, PVEP Song Hong stands out as a leading company within PVEP Corporation, specializing in exploration, consulting, and pipeline construction in South Vietnam Among the 53 companies in the group, PVEP Song Hong benefits significantly from the backing of both PVEP and local government authorities The company’s 2015 development strategy aims to enhance turnover, further solidifying its position with ongoing support from the Group and Government This collaboration presents substantial opportunities for PVEP Song Hong as it continues to grow and evolve in the industry.
Closed and modern production and exploration process
PVEP Song Hong stands out as a pivotal investment for the PVEP group, benefiting from cutting-edge technology provided by its parent company This advanced technology guarantees high-quality exploration products while prioritizing environmental safety Notably, the gaslift method is recognized as Vietnam's most modern technology, enabling the company to enhance its exploration and production capabilities in the coming years.
Stable and experienced human resource
PVEP's human resource policy is a key strength, focusing on training and enhancing the skills of its workforce to align with the company's long-term development goals in gas and oil exploration and services To attract high-quality employees, PVEP implements effective human resource strategies that foster experience and commitment among its staff.
“training people before making products”, suitable salary and commission, to ensure stable income for all employees And the average income is indicated via below figure:
Source: Human resource department, PVEP Song Hong
Figure 2.8: Average income for PVEP Song Hong’s employees
In addition to its competitive salary policy, the company has fostered an environment that encourages creativity and collaboration among its departments As a result, human resources have become a key driver for the company’s growth and development in the coming years.
The growth of sales with strong capital sources
PVEP Song Hong has experienced significant revenue growth in recent years, supported by a wealth of business capital, advanced technology, and skilled human resources, which serve as a strong foundation for its future strategic development.
Low quality of market forecast activities
The Red River company faces challenges due to its low and unstable financial indicators, including a low return on equity (ROE) and return on assets (ROA), as well as poor asset turnover This lack of financial stability hampers the company's ability to utilize retained earnings for growth and makes it difficult to attract external capital from banks or credit institutions Therefore, enhancing financial performance has become a critical objective for the company in the coming years.
The majority of market information is sourced from the parent company, yet its application in operational strategies remains limited Price fluctuations lack detailed analysis and protective measures, leaving the company unprepared for changes in gas and oil prices Although sales activities require minimal investment due to high demand, poor market forecasting creates challenges in implementing plans and meeting targets set by the parent company.
PVEP Song Hong is facing challenges in attracting external capital and bank financing due to low financial performance indicators, with ROE and ROA both falling below 5% The company's current deposits are also impacted by rising interest rates Therefore, enhancing financial metrics is a crucial objective for PVEP Song Hong as it seeks to implement its business strategy effectively.
PVEP Song Hong, a subsidiary of a major corporation, has recently benefited from significant government investment However, the company's outdated operational processes are hindering its ability to adapt to the evolving business landscape shaped by integration Despite these changes, PVEP Song Hong continues to rely on traditional methods without making substantial improvements to align with current global and national conditions As the market continues to evolve rapidly, these outdated practices are likely to impact the company's performance in the coming years.
The demand for oil and gas continues to rise, with no immediate substitutes available In Vietnam, demand for these resources is projected to reach 1.38% of the Asia Pacific region, while domestic supply meets only 4.8% of this demand Recognizing the significant increase in energy needs, the government has implemented favorable investment policies for PVEP, particularly focusing on PVEP Song Hong.
The increasing of energy demand is indicated in below figure
Figure 2.9: Demand and exploration volume for oil and gas in South East Asia in 2001-2015
About the demand for gas for industrial companies increasing gradually in 2001-
2010 and will continue till next years However, the exploration of gas can supply about 85% demand
Figure 2.10: Demand of Gas in the period of 2010-2015
The nonstop increasing trend of gas and oil demand will create the big market for PVEP Song Hong and all related company in next years
In 2008, the Thai Binh People’s Committee implemented a policy to encourage investment in housing construction and office rentals Additionally, the province has outlined a transportation development plan for 2005-2020, aiming to enhance its road system capacity By 2010, the road system is projected to handle 8.6 million tons of cargo, equating to 333 million tons per kilometer, and accommodate 6.15 million passenger trips, which translates to 340,000 passenger trips per kilometer.
In 2020, the province recorded 12.3 million tons of cargo and 11.2 million passenger trips The civil construction sector aims for an annual growth rate of 21% These policies and programs have created favorable conditions for the development of PVEP Song Hong from 2012 to 2016.
The modernization and industrialization of the oil and gas industry, exemplified by PVEP SONG HONG, have been significantly enhanced by advancements in technology The evolution of the mechanical industry has led to the creation of modern machinery that boosts operational efficiency, lowers production costs, and ultimately meets customer demands effectively.
In addition to advancements in the manufacturing sector, communication technologies have also undergone significant renovations The diversification of information and advertising channels enables PVEP SONG HONG to effectively promote its brand image to customers while simultaneously gathering valuable insights into market trends and influencing factors.