BANKING ACADEMY FACULTY OF INTERNATIONAL BUSINESS BACHELOR’S THESIS IMPROVING COMPETITIVE ADVANTAGE IN THIRD-PARTY LOGISTICS COMPANIES IN VIETNAM Student : La Thuy Linh Class : K21KDQTB Course : 2018 – 2022 Student ID : 21A4050230 Supervisor : Dr. Tran Ngoc Mai Hanoi, May 2022 BANKING ACADEMY FACULTY OF INTERNATIONAL BUSINESS BACHELOR’S THESIS IMPROVING COMPETITIVE ADVANTAGE IN THIRD-PARTY LOGISTICS COMPANIES IN VIETNAM Student : La Thuy Linh Class : K21KDQTB Course : 2018 – 2022 Student ID : 21A4050230 Supervisor : Dr. Tran Ngoc Mai Hanoi, May 2022 i DECLARATION I assure that my Bachelor’s thesis with the topic "Improving competitive advantage in Third-party logistics companies in Vietnam" is my personal research with the guidance of Dr. Tran Ngoc Mai – Lecturer of Faculty of International Business at Banking Academy in Vietnam.
Data sources and information used during the study are collected and processed in accordance with regulations. Research results in the thesis topic serve for self – study and objectively analysis. I take all responsibility for my thesis. Ha Noi, May 23rd, 2022 Student La Thuy Linh ii ACKNOWLEDGEMENTS Foremost, I would like to send my thanks to lecturers of Banking Academy and the Faculty of International Business who have always accommodated me with the most favorable conditions and have also offered me the best learning environment so far.
The knowledge that you have imparted not only helps me to complete this graduation thesis but also helps me to have more lessons to step forward on my career path in the future. Especially, I would like to express my sincere gratitude to my advisor Dr. Tran Ngoc Mai, who wholeheartedly helped, guided, and instructed me during the course of the thesis. Due to limited knowledge, it is inevitable that there will be shortcomings in the understanding of the problem as well as errors in presentation.
I look forward to receiving your comments and suggestions. Finally, I wish you good health and success in your teaching career. Thank you sincerely! iii TABLE OF CONTENTS DECLARATION .vii LIST OF FIGURES. viii LIST OF TABLES.
The urgent of the study. Research subject and scope. 6 CHAPTER 1: THEORETICAL BASIS OF COMPETITIVE ADVANTAGE OF THIRD-PARTY LOGISITICS COMPANIES. OVERVIEW OF LOGISTICS.
Definition of logistics. Characteristics of logistics. Classification of logistics. Role of logistics.
OVERVIEW OF THIRD-PARTY LOGISTICS SERVICES. Definition of Third-party logistics services. Types of Third-party logistics services. Role of Third-party logistics services.
Factors influencing Third-party logistics performance. Criteria for evaluating the effectiveness of Third-party logistics services. OVERVIEW OF THE COMPETITIVE ADVANTAGE OF THIRD- PARTY LOGISTICS COMPANIES. Definition of competitive advantage.
Criteria for measuring competitive advantage of Third-party logistics companies. 22 SUMMARY OF CHAPTER 1. 26 CHAPTER 2: THE CURRENT STATUS OF COMPETITIVE ADVANTAGE OF THIRD-PARTY LOGISTICS COMPANIES IN VIETNAM. CURRENT OPERATION OF THIRD-PARTY LOGISTICS COMPANIES IN VIETNAM.
General situation of Third-party logistics companies in Vietnam. Legal policy and state management of Third-party logistics in Vietnam. Logistics infrastructure in Vietnam. Third-party human resources in Vietnam.
SITUATION OF COMPETITIVE ADVANTAGE OF THIRD-PARTY LOGISTICS COMPANIES IN VIETNAM. ASSESSMENT THE COMPETITIVE ADVANTAGE OF THIRD-PARY LOGISTICS BUSINESSES IN VIETNAM. Achievements and limitations. 55 SUMMARY OF CHAPTER 2.
56 CHAPTER 3: SOLUTIONS TO IMPROVE THE COMPETITIVE ADVANTAGE OF THIRD-PARTY LOGISTICS COMPANIES IN VIETNAM BY 2030. DEVELOPMENT TREND OF THIRD-PARTY LOGISTICS COMPANIES IN VIETNAM. Global and domestics context. Opportunities and challenges for Third-party logistics companies in Vietnam.
SOLUTIONS TO IMPROVE COMPETITIVE ADVANTAGE FOR THIRD-PARTY LOGISTICS COMPANIES IN VIETNAM BY 2030. Promoting links between Third-party logistics companies and commercial enterprises. Improving the quality of human resources. Investing in the development of material and technical facilities.
Building brand and business strategy. SOME PROPOSES AND RECOMMENDATIONS TO DEVELOP THIRD-PARTY LOGISTICS SERVICES IN VIETNAM TO 2030. For the Government. For Vietnam Logistics Business Association.
For universities, colleges and training centers. 65 vi SUMMARY OF CHAPTER 3. 68 vii ABBREVIATIONS Abbreviation Full meaning 1PL First-party logistics 2PL Second-party logistics 3PL Third-party logistics 4PL Fourth-party logistics 5PL Fifth-party logistics APAC Asia Pacific Accreditation Cooperation ASEAN Association of South East Asian Nations Comprehensive and Progressive Agreement for Trans-Pacific CPTPP Partnership CSCMP Council of Supply Chain Management Professionals EVFTA EU-Vietnam Free Trade Agreement EDI Electronic Data Interchange LPI Logistics performance index LSP Logistics service provider MTO Multimodal Transport Operator RBV Resource-Based View UNCTAD United Nations Conference on Trade and Development VLA Vietnam Logistics business Association viii LIST OF FIGURES Figure Page Figure 1. Classification by forms of logistics 10 Figure 2.
The level of logistics human resources in logistics companies 44 Figure 2. Evaluation of the quality of technical staff - field operation 45 compared to business requirements Figure 2. Evaluation of the quality of administrative - office staff 46 compared to business requirements Figure 2. Evaluation of personnel quality Coordinator - Supervisor and Management - Operating personnel compared to the requirements of the 48 business Figure 2.
Information technology applications and development trends that businesses are planning or planning to provide to customers using 51 logistics services LIST OF TABLES Table Page Table 1. International LPI index 20 Table 1. Domestics LPI index 21 Table 1. Simplified VRIO Model 24 Table 1.
Relationship between the VRIO model and its implications 25 Table 2. LPI index in Vietnam period 2012-2018 27 Table 2. Current status of road infrastructure in Vietnam and planning 32 targets to 2030 Table 2. Top 10 reputable companies in the logistics industry in 2021 - 42 international freight forwarding, warehousing, 3PL, 4PL Table 2.
VRIO framework of financial capacity 43 Table 2. VRIO framework of human resources 49 Table 2. VRIO framework of brand 50 Table 2. VRIO framework of technology 53 1 INTRODUCTION 1.
The urgent of the study In recent years, the logistics service industry has become a spearhead industry with significant influence on the entire world economy. Along with the development of international trade, e-commerce is also developing rapidly. These have led to the trend of outsourcing logistics services, which has helped business activities become more professional, more efficient, and meet the market's needs. Third-party logistics (3PL) services play an essential role in the fastest and most efficient storage and distribution of goods to domestic and foreign customers, helping to boost the economy.
In particular, the use of 3PL services helps import-export or manufacturing businesses to specialize their processes and operations, focus more on the production and development of goods, helping businesses save time and money. That is why 3PL is an area that will develop in Vietnam in the future. Although 3PL services in Vietnam are being paid attention to by the State and facilitated development, the 3PL service industry in Vietnam is still relatively young. The scale of 3PL companies in Vietnam is still relatively small.
The low level of expertise and professionalism and the lack of a diversified service portfolio are why 3PL companies in Vietnam cannot compete with foreign logistics service providers. From the above practice, the author chose "Improving competitive advantage in Third-party logistics companies in Vietnam" as my thesis topic. International research In the world, so far, there are many detailed studies on 3PL service activities to help us have a better overview of this field. Research can be mentioned such as: In 2012, Robert Lieb and Kristin Lieb with the study "The Asia-Pacific Region Third Party Logistics Industry in 2011: The Provider CEO Perspective" (in International Journal of Physical Distribution & Logistics Management, Vol.
This article discussed the 2 results of a 2011 survey of the CEOs of the 10 largest 3PL service providers operating in the APAC market. This survey aims to assess the operational status, find out the factors affecting the business activities of 3PL companies such as the impact of natural disasters, the impact of social networks (Facebook, Twitter) on advertising about promoting the image for 3PL services and how customers react to price fluctuations. In addition, the study also provides an assessment of the achievements, difficulties, opportunities and challenges for the development of 3PL services. However, because this study is based on the survey results on a micro scale including 10 enterprises, it does not have an overview for the entire 3PL service industry.
Sohal and Shams Rahman published the study "Use of Third Party Logistics Services: An Asia-Pacific Perspective" (in the book International Series in Operations Research & Management Science. The study compares the trend of using logistics services in the APAC region, mainly between four countries: Australia, India, Malaysia, and Singapore. The increased use of outsourcing is related to the growth of manufacturing and logistics. 3PL services have favorable conditions for development such as: 3PL costs are at a moderate level, customers appreciate the service quality, employees are responsible at work.
However, 3PL service providers of these countries face challenges such as highly demanding customers, government and legal restrictions, rapidly changing markets, outdated infrastructure not enough to meet the needs of the market. However, this study has not given the 3PL development experience of each country, but only focused on the effects affecting the trend of using 3PL services. In 2017, Hofmann and Florin Osterwalder conducted a study titled "Third-Party Logistics providers in the digital age: Towards a new competitive arena?". This study examines the impact of digitization on 3PL business models.
The author analyzed the problem of digital disruption in service industries built by linking Michael Porter's five forces with insights from research on digitization and innovation. The stool shows that 3PL companies face significant hardship from new technologies such as autonomous vehicles as well as from platform-based business models and the sharing economy. 3 In 2020, Yaw Agyabeng-Mensah and colleagues published the study "Exploring financial performance and green logistics management practices: Examining the mediating influences of market, environmental and social performances". This study refers to a type of trend of the logistics industry - green logistics, assessing the impact of green logistics on social, environmental, market and financial activities to test its ability to achieve sustainable performance.
The study examines the direct effects of green logistics management practices on environmental, social, market and financial performance. Furthermore, the mediating effects of environmental performance, social performance and market performance between green logistics management practices and financial performance are examined. A recently published report titled "2020 Third-party Logistics study - The State of Logistics Outsourcing" shows the growing relationship between shippers and 3PL providers and their suppliers. All parties are aiming for the common goal of completing the stages in the supply chain.
From studying this relationship, the author has shown that the most common activities that shippers can outsource are domestic transportation, warehousing, international transportation, customs clearance and delivery. In general, studies about 3PL services have existed for a long time in the world and the number of quality research works is relatively high and also exploits many aspects of 3PL services. From there, it can be seen that the 3PL service industry is very promising and becoming a spearhead industry, helping to promote development of other sectors in the global economy. Domestic research Although 3PL is an industry that is experiencing strong growth in recent years, the research works in Vietnam are still quite limited.
Some of the research works and prominent articles can be listed as follows: In 2015, the research work of Assoc. Nguyen Xuan Minh and Phan Hong Trang published in Foreign Economic Review No. 70 (February 2015) with the topic: 4 "Promoting the provision of Third-party logistics services of Vietnamese enterprises". The article outlines the current situation of the 3PL industry, then makes recommendations to support the development of 3PL services in Vietnam, specifically: business restructuring in line with 3PL service providers, improve the quality of 3PL service providers, strengthen the application of information technology in logistics activities and strengthen the linkage between enterprises inside and outside the industry.