1 CAPSTONE PROJECT REPORT THE COMPLETION BUSINESS STRATEGY OF PKF VIET NAM AUDITING LIMITED COMPANY PERIOD 2010 TO 2014 Bui Van Vuong GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT 2 THE COMPLETION BUSINESS STRATEGY OF PKF VIET NAM AUDITING LIMITED COMPANY PERIOD 2010 TO 2014 Group No: 10 Student’s name: Bui Van Vuong Mac Hoai Duc Le Viet Phuong Le Thi Bich Diep (N01) HANOI, 2009 TOPIC The completion business strategy of Vietnam PKF Auditing Limited Liability Company in the period 2010 to 2014 OUTLINE Preface 04 General Introduction 05 3 1. The context of Vietnam’s economy 05 2. The necessity and significance of strategy construction 08 3. The structure of the report 11 Chapter I: The basic theoretical issues on strategic administration and 12 business strategy 1.2 The process for establishing the business strategy 12 1.3 Mission and vision of a business 13 1.1 Analysis of competitive environment 15 1.2 Macro environmental analysis 21 1.3 Analysis of the business’s current situation 25 1.5 Construction and selection of strategies 29 1.2 Business strategy for small and medium enterprises 30 1.3 Selecting best-suited business strategies for small enterprises 32 1.6 Implementation, examining and evaluation 33 1.3 Control and evaluation system 34 Chapter II: Situation of búiness strategy of PKF Vietnam auditing Co.1 Introduction to PKF Vietnam Auditing Co.
History and Development of PKF Vietnam Co. Characteristics of business operation of PKF Vietnam 38 4 2. Organizational and management structure PKF Vietnam 41 2. Information on Executive Board of PKF Vietnam 45 2.2 Strategic commitments of Vietnam PKF in recent years 46 2.1 Mission of PKF Vietnam 46 2.2 Vision of PKF Vietnam 46 2.3 Core value of PKF Vietnam 46 2.3 Macro environmental analysis 47 2.4 Analyzing the competitiveness of PKF Vietnam 50 2.2 Analysis of opportunities and challenges for PKF Vietnam 52 2.3 Analysis of main competitors 53 2.4 Analysi of internal environment of PKF Vietnam 56 2.5 Current business strategy of PKF Vietnam 60 2.1 Performance analysis of PKF Vietnam in 2006, 2007, 2008 60 2.2 Business plan of PKF Vietnam to 2014 62 2.3 Specific analysis of products and services of PKF Vietnam 64 2.4 Business strategy of PKF Vietnam 65 2.5 Review and comments on the advantages and disadvantages of the current 67 business strategies 2.6 General comments 70 Chapter III: Solutions to complete the business strategy of PKF Vietnam 71 Limited Company for the period 2010-2014 3.1 Suggestive Strategy for PKF Vietnam in 2010 – 2014 71 3.2 Human Resource Development Plan 72 3.4 Technology Development Plan 73 3.6 Business Diversification plan 74 3.
Financial capability and audit technology 75 3.2 Service quality and the diversity of provided services 82 3. Personnel and organizational strategy 82 3. Developing marketing solutions 85 3.5 Strengthening the relationship with PKF international 88 3. Capacity building organization and corporate governance 89 3.3 Conditions for application and assessing the effectiveness of solutions 90 3.1 Conditions for application 90 3.2 Assessing the effectiveness of solutions 94 Conclusion 95 List map, diagram, chart and table 96 Reference 97 Data resources for charts 98 PREFACE Along with the development of increasingly powerful organizations and enterprises on the scale and the level of labour, the issue of effective business strategic construction and implementation is becoming essential to all enterprises, which requires all businesses to be concerned.
Not spinning out of the market economy, the Board of directors of the Ltd Auditing PKF Company of Vietnam (hereinafter abbreviated as PKF Vietnam) has developed business needs to apply effectively the resources of the organization. 6 Most of the leaders are aware of the importance of strategic planning, but only few of them are successful when putting the strategies into business performance. For the significance of the business development, the group chose the topic: “The completion of business strategy of Vietnam PKF Auditing Limited Company in the period 2010 to 2014” to evaluate, analyze and find out solutions to improve and strengthen the business strategy of the company. The topic is carried out within the scope of reviewing the existed issues to find solutions for organizational completion from 2010 to 2014.
Because of limited time and capacity, unexpected shortcomings are inevitable. Therefore, the authors would like to received comments and advices from the supervisors for better outcomes and practical application not only within Vietnam PKF but also in other auditing companies. Our sincere gratitude. The context of Vietnam’s economy In 2007, Vietnam became an official member of WTO and performed the PNTR commitment to the United States, leading to the expansion of export markets and the removal and reducing trade barriers between Vietnam and WTO members.
As the result, Vietnam’s position in the international arena is enhanced through the last APEC Summit in 2006. Diplomatic relations, economic cooperation, investment, and expanding export markets activities are consolidated and strengthened through the visits of senior Party and state leaders with the participation of businesses. Stable political situation and national security and defense have created a favorable environment to attract foreign investors as well as domestic enterprises. The context have direct and comprehensive impact on the production process and business outcomes of business sectors and enterprises.
In 2007, the GDP growth of Vietnam is 8.44%, ranking third in Asia (after China 11.3% and India about 9%). This is an essential premise and a favorable factor for sectors and levels to complete the objectives and plans in 2007. Besides, in 2007 Vietnam also suffered from some adverse conditions such as major natural disasters, unpredicted epidemics and the disadvantages of fluctuating world market price which caused serious consequences and nonstop rise in domestic consumption prices. In 2008, the situation of socio-economic development is impacted by the interaction between the process of international economic integration with the variety of objective and subjective factors.
The global economy varies unpredictably with sharp increase in oil prices, long escalation in food prices till August 2008 and the global financial crisis broke out in September 2008 causing the world economy into deep recession. Vietnam economy revealed the instability, escalating inflation, big trade deficit of goods and current balance and increased risks of banking and financial systems. To confront the rising inflation, from April 2008, the government made a turning point in the policy to change from promoting 8 growth to curbing inflation. From October 2008, the economy has been struggling to resist the negative impacts of the global crisis and recession.
Again, the government diverted its policy, focusing on propping up the economic recession and maintaining the macroeconomic stability and social security. Monetary policy was gradually loosened; in December 2008 an economic stimulus package was officially launched to support enterprises in production, business, and infrastructure development, stimulating consumption and minimizing social difficulties. In the context of the world fluctuations, the economic growth was slowed down in 2008 to 6. This is the lowest growth rate since 2000, even worse, the growth of the fourth quarter was only 5.5% of the first three quarters in 2008.
However, the achievement of 6.2% growth is still worth noting, especially when compared to many developing countries and the region. In particular, while the growth of industry and construction experienced a remarkable decline (from 6.2% in 2007), agriculture, forestry and fishery saw the rising growth (4. The rising shows great significance of the sector in the country’s economic development as well as in solving social problems at the difficult situation. The social investment capital in 2008 still accounted for high proportions of 40.9% of GDP, though lower than the rate of 46.5% of GDP in 2007.
The high investment rates were due to the high investment capital in FDI and non-state sectors (respectively up to 48.3 % compared to that of 2007). The investment capital in state sector was significantly reduced (-11.9%) in 2008, which is also the first year the state sector has the smallest proportion in the total capital of social investment. The investment of public sector, especially by state-owned corporations and enterprises (SOEs) with large scale is inefficient. After more than two years FDI capital massively flew into Vietnam, the economy has revealed many inadequacies, which hindered the ability to efficiently absorb capital and created potential risks and challenges.
Planning and decentralization of state management on investment still face many difficulties. Macroeconomic situation has been more stable since August 2008; inflation rate 9 reduced rapidly in the fourth quarter of 2008 and the total inflation rates in 2008 was nearly 20%. The social security was particularly concerned, the government supported to minimize the damages and difficulties for the poor and more vulnerable social groups. In 2009, the third year marked the comprehensive integration of Vietnam’s economy with the world economy; Vietnam will continue to implement bilateral, regional commitments and commitments in the WTO as an official member.
In this year, also the fourth year of the period of 2006 to 2010, the socio-economic plans for the phase is carried out with the demand stimulating package under the effects of global financial crisis and economic downturn. The world economy is forecast to continue decline and slower growth, adversely affecting the economy of Vietnam, which is based heavily on foreign investments and exports. On the other hand, the implementation of economic stimulus policies, to a certain extent, will put pressure on inflation to increase. Therefore the goal of economic growth set out by Congress for 2009 will be difficult to attain, especially if the negative impacts on Vietnam’s economy become true and the implementation of stimulus policies do not reach the desired results.
Overall, predictions made from the model of macro economy show that, the growth rate of Vietnam’s economy is lower than in 2008 with high inflation and relatively large budget deficits, which is partly resulted from the implementation of demanding stimulus package policy by the government. Some targets, of which is the target of GDP growth rate, are far lower than the targets set out for the socio- economic development in 2009. Even with the optimistic scenario, the economy will only increase at the rate of about 5.56%, while the budget deficit up to 9.4% of GDP, which proves that the GDP growth rate should be carefully reviewed to adjust the implementation of socio-economic plans for 2009, and to suit the current situation in both domestic and international setting by the national Assembly and the government. 10 The forecast of international organizations show that the growth rate of Vietnam’s economy is much lower than the rate of 2008.
IMF (2009) and WB (2009) predict the rates in 2009 are respectively 3. The prediction by ADB (2009) and EIU (2009) also show that in 2009, Vietnam will achieve an average growth rate, respectively, are 4. Thus, the ability to achieve the targeted GDP growth rate of above 5.5% in 2009 seems hard to become a reality. In conclusion, Vietnamese economy has experienced high growth rates and created expansion in different industrial sections in recent years.
However, since 2007, inflation and excessive imports increased, macroeconomic suffered from frustration. However, since 2007, increasing inflation and trade deficit and irregularly varied macro economy and negative impacts from the world markets have affected the economic growth in Vietnam and exposed weaknesses of the institutions, economic structure, development, operating capacity and competitiveness of the nation. The necessity and significance of strategy construction Business strategy is the most important part of the overall strategy of a business and an essential for the existence and operation of the business. Business strategy determines the main goals to mobilize long-term and short terms accordingly.
Business strategy keeps plans carried out in right direction. Business strategy with good construction helps business earn more profits, firmly secure its position in the markets and proactively adapt to the business environment. For these reasons, the auditing company Vietnam PKF needs to build its business strategy based on the conditions and circumstances for its business operation. This is necessary requirements for any business.