General environment, content of the thesis
The Vietnam real estate market is gaining significant attention from global investors due to strong domestic demand and a recovering economy Key factors driving this interest include robust economic growth, rapid urbanization, and the emergence of a new middle class Despite facing various challenges in the investment landscape, Vietnam continues to attract interest from international investment organizations.
Since the 2008 economic downturn, numerous projects have emerged across various sectors, leading to a significant increase in office space availability in Hanoi and Ho Chi Minh City, along with residential and resort developments However, since early 2011, concerns about a potential new global economic crisis have arisen, particularly due to rising public debts in developed nations like Greece, Ireland, Spain, Italy, and possibly Japan and the USA.
In 2001, our economy faced significant challenges, with public debt reaching alarming levels and a reduction in public investment Credit financing became more restricted, leading to a sharp increase in the Consumer Price Index (CPI) and a decline in both exports and foreign direct investment (FDI) Consequently, the stock and real estate markets, crucial to our economy, were severely impacted, resulting in a "frozen" market where customers shifted to alternative investment options Project owners struggled to execute their plans due to a lack of capital.
To succeed in Vietnam's real estate market, businesses must establish clear and effective strategies while defining professional directions aligned with their goals In a rapidly evolving business environment, characterized by swift changes and intense global competition, it is essential for companies to remain proactive and innovative to adapt to these constant shifts.
Researching objects and scale
Housing and Urban Investment and Development Joint Stock Compant HUD8 (HUD8) is operating in real estate field which owns some large projects.
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The company's goal is to establish itself as a leading player in Vietnam's real estate and property sectors, with a focus on urban and industrial zone development To achieve this, the research will analyze HUD8's business environment and develop strategies for future growth.
Researching method
Utilizing a combination of primary and secondary data, along with direct investigation methods and economic statistics, the team employed the SWOT matrix and I.E matrix to analyze and determine the optimal strategy for HUD8.
Layout of the thesis
Layout of the thesis is as follows:
Introduction Chapter 1 BASIC THEORY ON CONSTRUCTING STRATEGY FOR
Chapter 2 ANALYZING BUSINESS ENVIRONMENT OF HOUSING
AND URBAN INVESTMENT AND DEVELOPMENT JOINT STOCK COMPANY HUD8 (HUD8).
Chapter 3 SELECTING BUSINESS STRATEGY FOR HUD IN THE
Mission and main targets
A company's mission outlines its purpose and core responsibilities, serving as a foundation for strategic development Meanwhile, the main targets establish the long-term goals that guide the organization in fulfilling its mission and achieving customer satisfaction.
Strategy constructing process
Building a business strategy enables enterprises to clearly define their purpose and direction, serving as a foundational guideline for all operational activities The strategic planning process can be broken down into several key steps.
- Selecting mission and main targets of the company
- Analyzing external environment: Find out opportunities and challenges.
- Analyzing internal environment: Show strengths and weaknesses.
- Selecting strategies: Use up core abilities and abilities, reduce threats, take full advantages of opportunities from external environment.
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Analyzing external environment
External analysis aims to identify opportunities and threats in a company's environment, taking into account macroeconomic factors, societal influences, government regulations, legal considerations, and technological advancements that may impact the organization.
Political institutions, laws, and politics significantly impact all business sectors within an economy, shaping the growth or decline of various industries Companies operating within a specific administrative region must adhere to the local institutional and legal frameworks to ensure compliance and success.
Economic factors have influences such as: economic growth, rate of inflation, economic period, interest increasing or decreasing, stock market, GDP growth rate, tax systems and tax levels…
Cultural values vary significantly across nations and regions, influencing the administration and trading operations of enterprises To identify potential opportunities and threats, businesses must analyze cultural and social factors Changes in cultural dynamics can create new business avenues or eliminate existing ones Successful enterprises cannot overlook these cultural influences; instead, they should leverage them to enhance their business strategies By researching the market, companies can evaluate social factors such as lifestyle, income, population demographics, psychology, and education levels, all of which play a crucial role in shaping decisions related to products, services, markets, and consumers.
Technological advancements significantly impact enterprises by providing opportunities to enhance product and service quality, thereby improving competitive capacity However, failure to timely innovate can lead to a decline in competitiveness As businesses strategize for development, they must recognize that advanced technology serves as both an opportunity and a threat.
Infrastructure significantly impacts business activities, particularly in sectors like agriculture, food production, hotels, and tourism, where natural factors play a crucial role To mitigate adverse effects from these influences, enterprises must actively analyze and forecast environmental conditions, often relying on professional evaluations Common strategies include preparation, smoothing, and predictive methods Additionally, businesses face challenges such as noise and environmental pollution, which require collective solutions Therefore, recognizing the impact of natural factors is essential for informed business decision-making.
3.2 Analyzing environment of business line
Use the model of 5 competition forces of Michael Porter to study, analyze competition pressure for the enterprise.
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Figure 1.1: Model of five competition forces of M Porter
According to Michael Porter, competition intensity on the market in any production line is affected by following 5 competition forces:
Michael Porter emphasizes that existing competitors have established their market positions, leading to heightened competition It is crucial to identify these competitors and analyze their strengths, weaknesses, threats, objectives, and strategies.
Customer is a competition pressure which can directly affect the whole producing, trading operation of the line.
Customers are divided into 2 groups:
Two key groups exert significant pressure on businesses regarding pricing, product quality, and accompanying services, ultimately influencing competition through their purchasing decisions Nevertheless, customers remain the crucial element for every enterprise, necessitating that each business strategy be customer-oriented.
The number of providers in a market significantly influences competition levels and negotiating power for businesses When multiple large-scale providers exist, they create increased competitive pressure, which can impact the overall production and trading activities within the industry.
The ability to replace products of providers: In this point, we study the ability to replace input materials by the providers and providers switching cost.
In today's fast-paced business environment, access to reliable information about providers is crucial, as it significantly impacts the decision-making process for enterprises when selecting input suppliers.
Latent competitors are businesses that have not yet entered the market but have the potential to influence it in the future The number of these competitors and the strength of their impact on the market depend on various factors, including the appeal of the industry, barriers to entry such as technology, capital, commercial aspects, and unique resources.
Main competition pressures of alternative products are:
The ability to meet consumer demands relative to competing products is crucial, as factors such as price, quality, and environmental influences—including culture, politics, and technology—significantly impact the threat posed by alternative products.
+ Incidental, unpredictable characteristics of alternative products: Even in internal line, the development of technology can also create alternative products for their own line.
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4 Analyzing environment inside the enterprise.
Target of internal analysis is to find out strengths and weaknesses of the company, including some following factors: Resource, finance, business administration…
Enterprise resources are essential input factors that drive a company's success They encompass both tangible assets, such as personnel, talent, and material resources, as well as intangible assets like time, knowledge, and information This combination of visible and invisible resources is crucial for achieving desired outcomes in business.
Financial capacity is a crucial factor in competitive evaluation and is essential for attracting investors A clear understanding of financial strength is necessary to choose the right and most effective strategies.
Enterprise administration involves effectively utilizing limited resources to maximize outcomes Decision-making is a crucial aspect of this process, requiring that decisions be grounded in scientific principles, unified in approach, and aligned with general regulations and institutional guidelines Additionally, these decisions should have clear orientations, be time-specific, and meet requirements promptly.
Selecting business strategy method
A well-defined strategy is crucial for an enterprise's future success, as it determines its ability to maintain a competitive edge in the market Each business unit must choose an effective business strategy, focusing on its competitive approach and product offerings within the specific market landscape.
SWOT, which stands for Strengths, Weaknesses, Opportunities, and Threats, is an essential analytical tool for strategic planning It helps businesses assess their position and direction by evaluating internal and external factors This model is particularly effective for group analysis and is widely used in business planning, strategy development, competitor evaluation, marketing, and product and service enhancement.
- O1: Listing opportunities according to the order of importance
- T1: Listing threats according to the order of importance
- S1: Listing strengths according to the order of importance
1 Use strengths to exploit opportunities
1 Use strengths to avoid threats
- W1: Listing weaknesses according to the order of importance
1 Restrict weaknesses in order to exploit opportunities
1 Minimize threats and avoid risks
Strategy analysis involves evaluating both internal and external environmental factors related to a company's mission and objectives This thorough examination enables businesses to identify opportunities and implement more effective methods to enhance their overall performance efficiency.
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After using SWOT matrix to formulate suitable strategies, managers will make a list of feasible strategies that enterprise can implement in the coming time.
In this stage, Quantitative Strategic Planning Matrix (QSPM) can be used as a strategic tool to evaluate and select the best strategy
The QSPM matrix leverages insights from the Internal Factor Evaluation (IFE) and External Factor Evaluation (EFE) matrices to enable strategists to objectively identify the most appealing and suitable strategies for an enterprise to pursue in order to successfully achieve its goals The development of the QSPM matrix involves a series of structured steps.
To effectively analyze the enterprise's strategic position, create a comprehensive list of key external opportunities and threats, alongside internal strengths and weaknesses, and place them in column (1) of the matrix These critical factors should be directly derived from the External Factor Evaluation (EFE) matrix and the Internal Factor Evaluation (IFE) matrix, ensuring a clear representation of the organization's current landscape.
− In the column (2) of the matrix, complete weights which are corresponding to each factor in the categorized column of the EFE matrix and the IFE matrix
To enhance strategic planning, organizations should analyze SWOT matrices to identify potential alternative strategies for implementation These strategies should be documented in the top row of the QSPM matrix, allowing for a structured comparison Additionally, it is beneficial to categorize these strategies into mutually exclusive groups when feasible, facilitating clearer decision-making and prioritization.
− Determine the attractiveness scores: not attractive = 1, somewhat attractive = 2, reasonally attractive = 3, highly attractive = 4 These numerical values indicate the relative attractiveness of each strategy in a given set of alternatives
− Calculate the total attractiveness scores of each strategy, considering only each critical success factor in the column (1) by multiplying the weights by the attractiveness scores in each row.
− Calculate the sum total attractiveness score of each strategy (considering all the relevant external and internal factors that could affect the strategic decisions) Higher scores indicate more attractive strategies.
The QSPM matrix is designed to evaluate alternative strategies within specific groups, allowing for any number of strategies to be included in each group For instance, a group may consist of various diversification strategies, such as concentric and aggregated diversification, while another group may focus on vertical and horizontal integration strategies It is important to note that the QSPM matrix only assesses strategies that belong to the same designated group, ensuring a coherent evaluation process.
5.2 Constructing total table of internal – external factors.
The IE matrix is a strategic management tool developed from the EFE and IFE matrices, designed to analyze the strategic condition and position of an enterprise.
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Duy trì VI Maintain và V And
Xây dựng III Build và II And
This is a quantitative analyzing technique, which is applied in parallel with SWOT matrix I.E matrix is usually based on the results of business environment analysis and internal enterprise analysis.
Creating a competitive image involves assessing and comparing a company against its rivals within the industry This evaluation is grounded in various factors that influence the company's competitive capabilities As a result, businesses can identify their competitive advantages in relation to their competitors.
The chosen strategy should be the most effective and appropriate for the specific conditions and circumstances of the enterprise By applying established principles and standards, the business can evaluate various strategic options against its objectives to identify the most suitable strategy for implementation.
When choosing a strategy, an enterprise must take into account several key factors that influence its selection These include the strategic goals of the organization, the perspective of the General Executive Director, available financial resources, the capabilities and expertise of management, and the competitive strength of the company relative to its rivals.
INTRODUCTION ABOUT THE ENTERPRISE
Name: Housing and Urban Investment and Development Joint Stock Company HUD8
Address: Lot CC3 – My Dinh II new urban area – Tu Liem – Hanoi Website: http://www.hud8.com.vn
Business registration license No 0103018830 issued by Department of Planning and Investment of Hanoi on August 02 nd , 2007, modified for the 2 nd time on December 31 st , 2008.
Charter capital: VND 50.000.000.000 Stock code: Has not been posted in stock market yet.
1.1.1 Group of Real estate investment and trade
HUD8's primary business focus is real estate trading, where the company invests in the development of urban areas, industrial zones, buildings, offices, and business centers for sale or lease This endeavor requires a range of professional skills to ensure successful project execution and management.
1 Establishing and managing construction investment projects, trading residential areas, urban areas and industrial zones
2 Trading and exploiting services on housing, urban areas and industrial zones
3 Consulting technical design, planning urban areas and industrial zones in detail; consulting designs for civil and industrial works.
4 Trading real estate and other services.
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After 5 years of establishment and development, HUD8 has had good projects, products of HUD8 are highly evaluated and the brand name of HUD8 is gradually affirmed on real estate market HUD8’s products mainly are investment, construction and housing business (apartment block, low-rise apartment Target customers are low- and middle- income people, location of the project is far away form the center of the city It can be said that this is the crucial field for HUD8’s development and immortality.
1.1.2 Group of construction materials erection, production, trade:
Although this activity contributes only 2% to 5% of the Company's revenue, it plays a crucial role in enhancing the Company's operational capabilities By supplying essential input factors, it strengthens overall production and business activities, showcasing the importance of specialized professional skills.
1 Producing and trading construction materials, interior equipments
2 Trading, importing, exporting machinery equipments
1.2 Organization structure of the Company.
Figure 2.2: Diagram of organization structure and management mechanism of HUD8
The real estate industry in Vietnam demands substantial capital investment and has a lengthy payback period, heavily influenced by government land management policies Despite its potential for high profits, this sector also carries significant risks Success in real estate requires not only financial resources but also strong relationships with state management agencies, banks, and financial institutions.
HUD8 is trying to become a leading company in the field of real estate, real property business, urban area, industrial zone investment and development in Vietnam.
Play the role of orienting, implementing the strategy of developing urban areas and houses in Vietnam.
Participate in real estate regulation, focus on developing houses for objects of average and low income.
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Orient multisectoral business, focus on developing urban areas and houses,closely connect to the fields of civil works and technical infrastructure construction,construction materials production.
ANALYZING EXTERNAL ENVIRONMENT OF HUD8
2.1 Analyzing macroscopic environment: Analyzing the influences of environment to HUD according to groups of factors.
2.1.1 Analyzing influences of political and law environment
The real estate market plays a crucial role in a nation's overall development, significantly impacting economic stability To ensure this market remains balanced, government intervention through policies and regulations is essential.
Vietnam boasts a stable and secure political environment, making it an attractive destination for investment This stability fosters confidence among both foreign and domestic investors, encouraging them to invest boldly in production and business ventures within the country.
Political factors significantly influence the real estate market through various policies, including land use planning, compensation and land clearance strategies, and regulations on the participation of individuals from different localities and foreign investors Additionally, policies that extend, upgrade, merge, or split localities play a crucial role, alongside tax regulations designed to manage the real estate sector Furthermore, encouraging external investment in localities is essential for fostering growth and development within the real estate market.
The legal system of a nation plays a crucial role in defining property ownership, land usage, and the rights to buy, sell, lease, and mortgage real estate This legal framework can significantly influence the real estate market, either promoting, restricting, or even eliminating its existence Given that real estate is intrinsically linked to land, which has historically been governed by state authority, the impact of law on real estate is profound and enduring.
In Vietnam, the law defines that lands belong to the whole people;individuals, organizations can only use land, Land Law was issued according to following periods:
1 Land Law in 1987 defined “strictly forbid land trading, encroaching, renting land and getting land rent in any forms”, which means forbidding land business.
2 Land Law in 1993 defined in item 2 clause 3 “Households, individuals who were delivered with land by the state can change, transfer, lease”.
3 Land Law in 2003 and implementation instruction documents defined the rights and obligations of land users, order, procedures to establish rights, obligations and order of transferring, changing, leasing, giving to inheritance, mortgaging land use right This created legal frame for goods exchanging activity in the market.
4 Real estate business law No 63/2006/QH11 on 29/06/2006 defined the regulations for real estate business; right, obligation of organizations, individuals who are trading and real estate transaction relating to real estate business.
5 Law on Houses No 56/2005/QH11 valid since 1/7/2006 defined the regulations for owning houses, developing, managing use, business of houses and state management on houses The law allowed overseas Vietnamese people to buy and own houses in Vietnam, this extended estate market for the objects of overseas compatriots who have the demand for owning houses in Vietnam.
6 Decree No 71/2010/NĐ - CP on 23/6/2010 closely tightened the activity of raising internal capital of customers According to Decree 71, real estate owner can raise capital from individuals and organizations to invest in houses construction and get profit share, or divided with goods of houses according to agreement and contribution rate, without trading floor, but this rate does not exceed 20% total products of each component project. Simultaneously, Decree 71 also affirmed that the investor can raise advanced capital of customers when the foundation has been completed.
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In recent years, the State and National Assembly have made efforts to enhance the business environment and attract investment through the construction and modification of key laws, including the Real Estate Business Law, Investment Law, Land Law, Tendering Law, and Law on Houses While these initiatives have clarified real estate business activities, challenges persist, such as the prevalence of unregulated businesses, unclear planning information, and a market skewed towards speculators rather than genuine consumers Consequently, property prices often fail to reflect their true value.
In 2011, the global economy faced significant risks of financial crisis and economic depression, with rising public debts in developed countries like Greece, Spain, Italy, and potentially the USA and Japan In response, the Vietnamese government aimed to tighten credit, reduce public investment, and restructure enterprises, including the banking system, throughout 2011 and into 2012.
So, the economy in 2011 and 2012 is very difficult, unstable including real estate market
Politics and law factors give real estate trading enterprises in general and HUD in particular following opportunities and challenges:
1 Political situation is stable, which creates good conditions for strong, long- term development strategy.
2 Law system is gradually perfected which makes real estate market healthier.
3 The government has policies to encourage real estate business investment, mechanism, policies to stabilize real estate market in cases of displacement, ensure profits for investors and customers.
1 Administrative procedures order is still prolix with many levels which obstruct the operation and takes back opportunities of enterprises.
2 Land use management mechanism, real estate investment, business management are tightened, which makes the activities of developing land, compensating and clearing spaces, mobilizing investment capital of investors more and more difficult.
3 Legal documents in land management, real estate investment and business do not match the reality, overlap that make it difficult for the enterprise to participate and implement.
2.1.2 Analyzing influences of economic environment:
Table 2 4:5 Overview of Vietnam economy
Growth speed of GDP/year 8.46% 6.31% 5.32% 6.3% 6.5%
(Source: Data from General Statistics Office and BMI report 2001)
Between 2006 and 2010, the economy experienced an average growth rate of 7.01% per year Although the number of foreign investment projects decreased by 18 in 2010 compared to previous years, the registered capital saw a significant increase of 54.9% since 2006 During this period, a total of 1,253 foreign investment projects were licensed annually, with an average registered capital of $29.4 billion.
In 2010 and 2011, engaged capital reached a substantial 17 to 18.6 billion USD, with 6 to 6.8 billion USD specifically allocated to the real estate market This indicates that the domestic real estate sector remains highly attractive and possesses significant potential for growth.
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In today's economic climate, businesses are compelled to raise prices due to rising costs both domestically and internationally, even as consumer purchasing power and income levels remain stagnant.
Since 2010, the credit market has experienced significant tightening, leading to high lending interest rates Monitoring statistics suggest that credit growth may reach 17% in 2011; however, the real estate and stock markets have seen the most considerable declines This situation has adversely impacted business operations, making it challenging for enterprises to secure bank loans Additionally, there are no positive signs for real estate credit, hindering project implementation as planned.
ANALYSIS OF INTERNAL ENVIRONMENT OF HUD8
3.1 Analysis of Strong points and weak points of HUD8.
3.1.1 Financial capacity of the Company
Figure 2.6: Equity structure of HUD8
Founded in 2007, the Housing and Urban Development and Investment Joint Stock Company (HUD8) operates as a subsidiary of the Housing and Urban Development Corporation, now known as the Housing and Urban Development Group The equity structure of HUD8 is clearly defined, reflecting its integral role within the larger organization.
1 HUD Group: 51% of charter capital.
2 HUD1 Investment and Construction Joint Stock Company: 10% of charter capital.
3 HUD3 Investment and Construction Joint Stock Company: 10% of charter capital.
4 Hop Phu Investment and Construction Joint Stock Company: 10% of charter capital.
HUD Group, holding 51% of HUD8's charter capital, plays a crucial role in the company's growth and sustainability As a leading pioneer in the Vietnamese real estate market, HUD Group, alongside other specialized shareholders in construction and services, empowers HUD8 to swiftly and effectively integrate into the market This strong backing is a significant advantage for HUD8's development.
Short-term borrowed fund (55,471,045,000) and long-term borrowed fund (178,048,000) of HUD8 are relatively small, may indicate that HUD might take the initiative in its business operation.
Table 2.2223: Cash balance and bank deposit
HUD8 demonstrates a solid financial foundation and high liquidity despite its relatively small equity This positions the company to engage in new projects, although its limited capital in the real estate sector may pose operational challenges Many companies face capital shortages despite profitability, often due to rapid growth and extensive investments Nevertheless, HUD8 is well-equipped to maintain its competitive edge.
MBA GRADUATION THESIS OF GROUP 12 55 position by managing cash flow, key investment This is an important factor for the development of HUD8.
HUD8 is a real estate company with a modest charter capital that demonstrates effective operations, achieving a Return on Equity (ROE) of 82.01% and a Return on Assets (ROA) of 16.71%, both of which surpass industry averages Although HUD8's gross profit margin stands at over 14%, which aligns with the industry average, the company faces higher costs due to entering the real estate market later than most competitors.
Ratio of debt over total property of HUD8 achieves 75.90% , mainly due to the mobilization in advance from customers, so according to our assessment, this is safe debt.
As of 2010, HUD8's current ratio stands at 1.2, indicating sufficient capital to meet its existing loan obligations, in contrast to the real estate industry's average current ratio of just 0.55.
In 2010, HUD8 achieved a Quick Ratio of 1.05, indicating sufficient capital to cover its current loan obligations This strong financial position allows HUD8 to maintain its consumption plans for both home and office markets, enabling timely launches of high-priced goods.
HUD8 demonstrates strong financial health, maintaining normal equity levels that align with industry averages and showcasing good solvency This positions HUD8 advantageously against its competitors, allowing it to actively engage in investment activities However, to successfully implement and expand its projects, HUD8 must seek to raise additional capital through an increase in charter capital.
3.1.2 Value of project held by HUD8
HUD8 is spearheading a series of significant projects in Hanoi, Ho Chi Minh City, and various urban centers nationwide These large-scale initiatives are strategically located in central areas or regions undergoing active development, reflecting a high rate of urbanization.
Table 2.2829: A number of typical projects of HUD8
Investment amount (billion Vietnam dongs)
Van Canh Urban area – Hoai Duc Hanoi 3.6 707
Housing area project in Binh Minh
( Section km6+800Tran Hung Dao avenue –
CT2 High building - Van Canh Hanoi 1.2 2,000
CT2 high building - Linh Dam Hanoi 0.9 1,000
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HUD8 is launching several new projects, including a commercial housing area at Km6 +800 between Bac Lenh bridge and Ngoi Duong bridge in Binh Minh ward, Lao Cai city, Lao Cai Province Additionally, they are developing the CT2 high-rise building in Tay Nam Linh Dam and phase II of the Van Canh new urban area in Hoai Duc, Hanoi These initiatives boast significant land resources, high development potential, and are situated on prime accommodation land.
HUD8's projects feature modern urban developments characterized by prime locations, open spaces, and contemporary landscape architecture These include garden villas designed in a villa-combined model, alongside well-planned parks, high-rise residential buildings, offices, commercial centers, supermarkets, and amusement parks This thoughtful arrangement creates a harmonious and convenient environment for residents, contributing to the popularity of HUD8's projects.
HUD8 is currently engaged in synchronous-scale and valuable projects, though it has only partially tapped into their full potential With the recent growth in the real estate market, these projects present significant opportunities for expansion This positions HUD8 with a substantial competitive advantage in the marketplace.
3.1.3 Analysis of advantage in brand of HUD8
Founded in 2007, HUD8 began its journey with the Linh Dam and Van Canh new urban area projects in Hoai Duc While not as prominent as larger companies like SUDICO and VINACONEX, HUD8 has gained recognition among investors and customers With a strategic focus on middle and low-income clients, the Van Canh new urban area is poised to become a key destination for this market segment.
HUD8, backed by the prestigious HUD Group, excels in launching new projects due to the trust it has earned from government and local authorities Leveraging the extensive experience in project management and after-sales services inherited from HUD Group, HUD8 is widely recognized by both customers and competitors as a leader in after-sales support.
HUD8 prioritizes brand development and protection while consistently enhancing customer care Additionally, the company demonstrates a strong commitment to its obligations to the state, partners, and shareholders.
With a robust commitment to customer service, HUD8 is poised to become a prestigious brand in the real estate market, setting itself apart from competitors.
3.1.4 Human resource and administration level
Currently, HUD8 has had a total of 55 staff, especially persons having university degrees and post graduate education making up relatively high: 35 persons
TARGETS OF HUD8 IN PERIOD OF 2011 - 2015
HUD8 company was established with the goal to become a leading company in the field of investment, perform development orientation of the Vietnam Housing and Urban Development Corporation.
- Play orientation to implement development strategy of housing and urban in Vietnam
- Participate in regulating the real estate market, focus on developing housing and urban for those with average income and low income
The multi-industry approach focuses on urban development and housing, ensuring close coordination with civil construction and infrastructure sectors This strategy emphasizes the production of construction materials and environmental considerations to enhance collective strength and promote sustainable growth.
1.2 5-year economic target in period of 2011 - 2015.
Table 3.3435: Economic expenditure for 5 years of 2011 - 2015
Targets Period of 2011 - 2015 Value of 2015
Total investment value 25,000 billion VND 5,000 billion VND
Total business and production value
Income 18,000 billion VND 5,600billion VND
Profit 4,600 billion VND 1,000 billion VND
Taxes 2,550 billion VND 550 billion VND
Charter capital 800 billion VND 1,500 billion VND
Monthly average income/person 20 million VND 25 million VND Average growth: from 20% to 25%.
- Business investment in housing, and urban and technical infrastructure:
This is task and main business line of HUD8 Company; the investment value
Group 12 63's MBA graduation thesis emphasizes that urban housing and technical infrastructure constitute 90% to 95% of the company's total production and business value The company's primary objective is to invest synchronously and comprehensively in modern housing and technical infrastructure, delivering superior quality products to customers, particularly targeting key demographics with average and low incomes.
The company is focused on trading and producing construction materials to diversify its overall industrial portfolio In the short term, it will prioritize selecting relevant and supplementary construction materials that align with its primary business lines Currently, the value generated from construction material production accounts for less than 10% of the company's total business and production value.
- Develop strategies for HUD8 Company to become a leading company in the field of investment, perform development orientation of the Vietnam Housing and Urban Development Corporation.
- Prepare and manage investment projects in developing residential areas, urban areas, economic zones, industrial parks
- Build house and urban infrastructure, residential zones, high technology zones, new economic zones, export processing zones, industrial parks; invest in the renovation and upgrading of buildings.
- Consult, manage, trade real estate, and manage service exploitation in new urban and residential areas.
- Work contract of construction works, industrial works, works of transportation, irrigation, telecommunications, and technical infrastructure for urban areas and industrial parks.
- Create a professional working environment with increasing incomes; offer
- Provide the customers with products and services with the best quality Maintain stability in growth of the company, transparency in management and efficient in using capital.
STRATEGIC SOLUTIONS OF HUD8 IN PERIOD OF 2011 - 2015
1 The stable political situation offers conditions to sustainable and long- term development strategy
2 Legal System is gradually completed to make the real estate market healthier.
3 The government has policies to encourage investment in real estate business, mechanisms and policies to stabilize the real estate market as fluctuations, ensure benefits for investors and customers.
4 Macro economy grows at high level (in
1 The order of the administrative procedures is cumbersome, through multiple levels causing obstruction for operation and loss of enterprise’s opportunities.
2 The management mechanism of land use, investment, real estate business is increasingly tight due to the activities of land fund development, compensation for ground clearance, mobilization of capital from the investors more difficult.
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2012, it is forecasted to grow at 6.1%); increased per capita income makes demand of houses, offices for lease, industrial parks, resorts increased.
5 High-speed urbanization associated with urban expansion needs, so the State concerns the investment in the new urban areas.
6 International integration and globalization trend create opportunities for business development in real estate Attract foreign investment, cooperation, and links and learn.
7 The securities market downturns and the gold market is not stable, so attract cash
3 The legal documents on land management, investment, and real estate business fail to match the reality, overlapping causing difficulties for the
Company as participating as well as implementing.
4 Limitation of credit and high interest rate make difficulty for the mobilization of investment capital
5 The global economic crisis and its consequences continue to affect enterprises.
6 Domestic enterprises should fiercely compete as facing foreign corporations as investors having market.
8 Increased population and urbanization speed increase housing demand of housing
9 The mechanical transformation of the population to urban area increases the demand of housing.
10 Application of new technologies to construction; time for the project is reduced and speed up of investment capital rotation.
11 Application of information technology helps enterprise to reach customers faster and more economically. and financial capability.
7 High population density, land fund for urban development is increasingly scarce.
8 Vietnamese enterprises shall gradually lose the competitive Strong points with foreign companies without updating and application of advanced technologies in the world.
1 HUD8 has healthy financial capacity, low financial risk
1 The market expansion and development strategy
MBA GRADUATION THESIS OF GROUP 12 67 channels to mobilize capital from external sources for production and business
3 HUD8 owns the major and worth real estate projects The projects of HUD8 are only partially exploited or not exploited.
4 The products of houses, offices, etc. of HUD8 have good quality services, high appreciation from the customers.
5 HUD8 is an investor with ability, prestige, highly appreciated by the
State agency competent and trusted by the partner.
6 HUD8 has a prestigious leadership with management strategy
3 Maximize the advantage of prestige brands of HUD8, seize opportunities, and promote investment in new projects to expand area, develop business, and create resources for sustainable growth
4 Promote the advantages of experience, process of customer care service; this is the development orientation of the core values of HUD8 currently and in the future.
5 Promote the collective intelligence, creativity of staff; improve professional background, promote application of new technology to manufacturing, innovate approach relationships and reputation of HUD8, follow up the agencies and departments to solve problems in the procedures on investment and business to accelerate progress and improve the investment efficiency of projects.
3 Maintain a healthy financial background; keep the stability of the company in a crisis environment with the guideline based on domestic resources. Also use the prestige of HUD8 at credit institutions, banks and the securities market to raise capital from external sources for investment and development. vision.
7 HUD8’s staff is qualified, capable and experienced. order to maximize products’ value, maximize business efficiency.
1 HUD8 has not had a policy to build and develop long-term human resources.
2 The Company has no effective measures to prevent "brain drain".
HUD8 still depends on the management mechanism of the
State, leading shareholder as HUD Group.
4 Marketing activity is not professional, not attaching special importance to advertising and marketing to raise value of the projects.
1 Brand advertising and development strategy
The company currently lacks a comprehensive strategy for human resource development, emphasizing the need for focused training to enhance professional and technological expertise By fostering a supportive work environment, the goal is to cultivate a dedicated team of qualified staff committed to the company's growth and success.
3 Attach special importance to improving the quality of marketing,
3 Build and create strong and stable workforce as the key factor to overcome the crisis and the challenges from the external environment.
MBA GRADUATION THESIS OF GROUP 12 69 information technology applications to marketing and sales in order to access potential customers and expand market share of HUD8.
Through the SWOT matrix, we formulated the following strategies for HUD8:
The SO strategy encompasses two key components: the market expansion and development strategy, which involves researching and broadening the scope of projects, and the product centralization strategy, which prioritizes the development of housing products tailored for low- and middle-income customer segments.
ST strategy: including Product Differentiation strategy (focusing on developing services and project progress) and Technology improving strategy ( applying new science and technology).
WO strategy: including Brand Advertising and Development Strategy and Corporate Culture Development Strategy (creating a proactive working environment to restrict brain drain).
WT strategy: including Human Resources Strategy and Joint-Venture Strategy.
After classifying into different groups of matrix from the SWOT matrix, we start to formulate the QSPM matrix
Table 3.38: The QSPM matrix for SO strategy group.
Alternative strategies The Market expansion and development
2 Good ability of mobilizing capital from external resources
5 Good relationship with State agencies
6 Good relationship with stable suppliers
2 Policy to encourage investment of the Government 3 3 9 4 12
4 Preferential Policy for low-paid housing projects 4 3 12 4 16
5 Opportunity to coordinate from international economics integration trend.
6 Other instable investment channels that attracts cash flow for real estate market.
7 Increasing population and urbanization speed 4 3 12 3 12
8 Mechanical transformation of the population to urban area 4 4 16 3 12
9 Application of new technologies into construction 3 3 9 4 12
The SO strategy group encompasses two primary strategies: market expansion and development, as well as product centralization Analysis using the QSPM matrix indicates that the product centralization strategy has been chosen as the preferred approach.
Group 12 achieved a total score of 191 for their MBA graduation thesis, surpassing the market expansion and development strategy, which scored 185 This strategy is particularly appealing due to the significant customer segmentation in the market, indicating a strong demand for housing.
Table 3.39: The QSPM matrix of ST strategy group
2 Good ability of mobilizing capital from external resources
5 Good relation with State agencies 3 3 9 2 6
6 Good relation with stable suppliers 3 3 9 3 9
1 Mechanism of land fund management more puritan 1 3 3 2 2
2 Financial and currency market instable 2 3 6 3 6
3 Competitive pressure with foreign enterprises 2 4 8 4 8
The ST strategy group focuses on two primary strategies: Product Differentiation and Technology Improvement The QSPM matrix indicates that the Product Differentiation Strategy is favored, achieving a total score of 108, largely due to HUD8's superior customer service, particularly in after-sales support However, the lack of investor attention to social security issues has led to conflicts between customers and investors during product usage.
Table 3.40: The QSPM matrix of WO strategy group
Alternative strategies Brand Advertising and Development Strategy
1 Non-policy on building and developing long-term human resource
2 Existence of situation “brain drain”
3 Business and production activity dependent on State capital management mechanism
2 Policy to encourage investment of the Government 3 2 6 2 6
3 The market is increasingly healthier 2 3 6 2 4
4 Preferential Policy for low-paid housing projects 4 3 12 3 12
5 Opportunity to coordinate from international economic integration trend.
6 Other investment channels instable that attracts cash flow for real estate
MBA GRADUATION THESIS OF GROUP 12 73 market.
7 Increasing population and urbanization speed 4 2 8 2 8
8 Mechanical transformation of the population to urban area 4 2 8 2 8
9 Application of new technologies to construction 3 3 9 3 9
The WO strategy group encompasses two primary strategies: Brand Advertising and Corporate Culture Development The QSPM matrix indicates that the Brand Advertising and Development Strategy is favored, scoring 100 compared to the 95 for Corporate Culture Development This preference highlights the importance of brand identity, especially in the context of the ongoing WTO integration process, making it a crucial focus for businesses.
Table 3.41: The QSPM matrix of WT strategy group
1 Non-policy on building and developing long-term human resource
2 Existence of situation “brain drain”
3 Business and production activity dependent on State capital management mechanism
External factors management more puritan
2 Financial and currency market instable 2 3 6 4 8
3 Competitive pressure with foreign enterprises 2 3 6 4 8
The WT strategy group comprises two key strategies: Human Resources Strategy and Joint-Venture Strategy The QSPM matrix indicates that the Joint-Venture Strategy is favored, scoring 36 compared to the Human Resources Strategy's 34 This preference stems from the intense competition in the real estate market, highlighting the importance of leveraging partnerships for success.
Therefore, through the QSPM matrix, attractive strategies include:
- Brand Advertising and Development Strategy
2.3 HUD8’s strategy selection in the 2011-2015 period
Using the SWOT and QSPM matrices, we identified four feasible strategies for HUD8 to consider Given its current limitations in financial resources and workforce, pursuing a comprehensive strategy with multiple simultaneous initiatives would be ineffective Therefore, HUD8 should concentrate its efforts on the most impactful strategy Based on previous analyses, we recommend the "Product Differentiation Strategy" for HUD8 during the 2011-2015 period, as it aligns best with the company's capabilities and market needs.
− In the situation of real estate market like today, many projects are deployed tardily, which results in losing customer’s trust and affecting pressing and necessary
MBA GRADUATION THESIS OF GROUP 12 75 needs of the people Therefore, the progress of the project will affect customer’s decisions of selecting products
− Real estate business is durable and sustainable one directly related to customer’s lives Therefore, customer services, especially after-sales service are very critical
− Proving advantages of experience, customer service process is HUD8’s orientation in developing its core value in the present and in the future as well
Thus, Product Differentiation Strategy is not only suitable to HUD8’s current competition position, helps HUD8 bring more benefits for its customers but also creates a sustainable competitive advantage for HUD8
From the above EFE matrix and IFE matrix:
- From EFE matrix – mark on y axis of 3.09
- From IFE matrix – mark on x axis of 3,05
Duy tri VI Maintain va V And
Xay dung III Build va II And
The Blue Ocean Strategy allows for a comprehensive evaluation of the expansive market, emphasizing the importance of convenience through rich products, synchronized projects, after-sales service, and swift implementation It also focuses on reducing prices and costs by minimizing advertising expenses, avoiding brand promotion, and selecting project locations away from central areas This strategy can be effectively applied to HUD8 in the real estate market from 2011 to 2015, necessitating a reevaluation of value factors.
2.4 Strategy selection of HUD8 in period of 2011- 2015.
By integrating the SWOT and IE matrices, the group identifies the SO strategy for HUD8, focusing on leveraging its strengths to capitalize on opportunities This strategic approach aims to achieve targeted objectives during the period from 2011 to 2015.
MBA GRADUATION THESIS OF GROUP 12 77
Maximize the advantage of prestige brands of HUD8, seize opportunities, and promote investment in new projects to expand area, develop business, and create resources for sustainable growth
Promote the advantages of experience, process of customer care service; this is the development orientation of the core values of HUD8 currently and in the future.
To enhance business efficiency and maximize product value, it is essential to foster collective intelligence and creativity among staff This can be achieved by improving their professional skills, embracing new technologies in manufacturing, and innovating customer engagement strategies.
STRATEGIC SOLUTIONS FOR PERIOD OF 2011 - 2015
A market solution encompasses researching, developing, and organizing programs that assess the market impact of a specific product This process includes evaluating its performance, designing and implementing effective advertising strategies, and ultimately establishing a strong brand presence in the market.
At the end of 2011, the real estate market faced significant challenges that persisted into 2012, necessitating HUD8 to adopt strategic solutions aligned with market trends Training programs and consultancy efforts revealed that many real estate companies were reactive rather than proactive in their marketing and sales strategies, lacking targeted communication plans for different customer segments and long-term brand development solutions Additionally, there were deficiencies in effective marketing for sales, systematic selling strategies, and business planning, prompting HUD8 to prioritize the enhancement of these critical processes.
To enhance business operations and maximize investment, it is essential to develop housing, urban, and engineering infrastructure projects throughout all phases, from the initial advertising and product introduction to the final handover and commissioning stages.
To enhance and refine services internally, it is essential to cultivate a knowledgeable workforce that comprehends state policies and current market conditions This understanding enables staff to swiftly recognize market fluctuations and implement timely and effective adjustments to business strategies.
To enhance brand value and project effectiveness, it is crucial to develop a robust after-sale service process that prioritizes customer satisfaction By actively listening to and addressing customer needs, businesses can align their production and operations with market demands, ultimately delivering exceptional value to their clientele.
To align with the new production and business model, it is essential to enhance and finalize the organizational structure of personnel at HUD8 Company Additionally, restructuring the company's capital will leverage the strengths of the Group Implementing comprehensive decentralization and management regulations will facilitate ongoing improvements across all management aspects and foster a culture of high self-creation capital within the company.
To enhance production and business efficiency, it is essential to build and develop human resources by training all staff in the functional areas of the company Implementing a quality management system in accordance with ISO 9001:2000 standards across the organization will foster a culture of awareness and continuous improvement.
- Enhance staffs for after-sales service and after sales service Capture and analyze customer information fast and accurately to offer solutions for serving customers effectively and quality.
MBA GRADUATION THESIS OF GROUP 12 79
Effective real estate management and sales strategies in Ho Chi Minh City involve comprehensive planning and policy development This includes building and nurturing a skilled real estate sales team, optimizing the trading system for efficiency, and implementing a structured approach to customer visits Additionally, careful preparation and attention to promotional activities are essential for managing business outcomes successfully.
The annual HUD8 event focuses on effective business planning and marketing strategies for the real estate sector It aims to equip enterprises with the tools necessary to navigate challenges and achieve optimal results in 2012, fostering resilience and adaptability in a competitive industry.
- Marketing solution for real estate projects, HUD8 pays special attention to and find new solutions for Marketing helping HUD8 more active in the market situation of 2011 and 2012 with difficulties
- Develop and expand the market and promote to look for projects in Hanoi city,
Ho Chi Minh City and the neighboring provinces such as Lao Cai, Hung Yen, Vinh Phuc, etc Research, develop and invest in improving services and building materials
- Invest and coordinate with business units having strength in searching and finding projects, capable of business fund and so on to implement an investment in project most effectively.
- Invest in renovation and modernization of technological equipment, management facilities, especially information technology for ensuring the fastest access to the newly scientific and technologic achievements
- Strengthen support of the Group to the development of new projects to take advantage and promote available Strong points and experiences of departments, divisions of the company.
To optimize corporate funding and enhance capital management solutions, it is essential to effectively allocate resources for project demands Establishing management regulations and clearly declaring expenditures related to advertising, marketing, promotions, and communication activities—including conferences, transactions, and foreign affairs—will ensure strategic financial planning and accountability.
- Establish the financial investment council of HUD8 Company; decentralize the Management Board and CEO to ensure effective and time of the financial investment.
To secure funding for investment and business operations at HUD8, a strategic plan will be developed to raise capital through methods such as increasing charter capital and issuing convertible bonds Additionally, collaboration with financial institutions and credit organizations will be pursued to facilitate financing for the implementation of investment projects in HUD8's real estate and industrial parks.
- Establish Debt Collection Board to finish withdrawing debt of the customers in the projects, to ensure funds for the activities of the company.
3.5 Solution of product quality management
- Model of service quality management has basically three types: Model of communication, the model of satisfaction level of consumers and the product model.
In recent years, business and management scholars have emphasized that effective communication between customers and service staff is crucial for direct service activities Consequently, managers should leverage communication theory to analyze and enhance service delivery, guiding the design and management of direct services to improve overall service quality.
The customer satisfaction model highlights the importance of customers' subjective perceptions regarding service quality It underscores the relationship between the nature of the service provided and the overall quality experienced by customers in their interactions.
The MBA graduation thesis of Group 12 emphasizes that customer retention and purchasing behavior are influenced by their subjective perceptions of the service process and outcomes It highlights the importance of understanding the interplay between customer personality, service time, and specific service cases Consequently, management should focus not only on improving service quality but also on recognizing the psychological, social, and environmental factors that affect communication between customers and service staff.
The product model emphasizes the importance of service managers in defining quality standards and selecting appropriate inputs and technology to meet these requirements at the lowest possible cost This approach to quality management is highly valued in today's market, ensuring that services are delivered efficiently while maintaining high standards.