Business strategies for the Can Tho Power Company in period 2013-2018
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CAPSTONE PROJECT REPORT


TOPIC
BUSINESS STRATEGIES FOR
CAN THO POWER COMPANY
PERIOD 2013- 2018




Class: GaMBA01.D0111
Group 2:
1. Tran Quyen Du
2. Trac Thanh Dien
3. Tran Vi Duc
4. Vo Quoc Tuan



HCMC – 03/2013

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Index Page
Index 1

Introduction 6
1. The current economic context 6
2. The necessity to choose topic 7
3. Objectives and name of the topic 8

Chapter 1: Theoretical basis for building strategy 9
1/ Overview on strategy and strategic management 9
a. Definition of strategy and strategic management 9
b.The strategic level of businesses 9
c. Strategic management process 10
2/ Business strategy management process 10
Step 1: Identifying vision, mission and objectives of the business; 10
a. Vision 10
b.Mission 11
c. Objectives 14
Long-term objectives 14
- Short-term objectives 14
Step 2: Analyzing environment 14
1. Analyzing the external environment 14
a. Macro environment 15

Business strategies for the Can Tho Power Company in period 2013-2018
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b. Micro environment 16
2. Analyzing the internal environment 18
3. Use and collaboration tools to review and set forth business strategy:19
a. External Factor Evaluation – EFE Matrix 19
b. Internal Factor Evaluation – IFE Matrix 21
c. SPACE Matrix 22
d. SWOT Matrix 24

e. QSPM Matrix 26

Chapter 2: Production-busiess analysis of the Cantho power Company 28
I/ Overview on the Can Tho Power Company (PCCT) 28
1/ The PCCT’s Formation and Development 28
2/ Business lines 31
a. Main business lines 31
b. Other business lines related to the main business lines 31
c. Another business lines 31
3/ Organizational structure of the Can Tho Power Company 32
II/ Analysis of the business environment of the PCCT: 37
1/ External Environment 37
a/. Macro environment 37
a1. Economic environment 37
a2. Cultural, social, geographic and demographic environments 40


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a3.
Political, legal environments 41

a4.Technological environment
42
b/. Micro-environment 42
b1. Competitors 42
b2. Customers 42
b3. Suppliers 43
b4. Alternative products 43
b5. Barriers to entry

43
2/ The internal environment 44
a. Production activities 44
b. Marketing 44
c. Finance and Accounting 44
d. Human resources 45
e. Research and development 47
f. Information system 47
III/ Results of operations and business of PCCT in the years 48
1. Analysis the implementation of revenue 49
I.1 Revenue for electricity bussiness 50
I.2 Revenue for other business 50
2. Analysis the implementation of expenditures 53
IV/ Apply the tools for analysis and strategic choice for PCCT 55

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a. External factors environment – EFE for PCCT 55
b. Internal factors environment – IFE for PCCT 55
c. SWOT matrix for PCCT 57
e. QSPM matrix for PCCT 64
V/ Summary of chapter 2. 72
Chapter 3: Proposals and recommendations 73
I/ Development strategy of PCCT from now until 2018: 73
1/ Engagements 73
a. Vision 73
b. Mission 73
c. Core values of PCCT 74
d. Goals 75
e. Commitments 75

2/ Build business strategy of PCCT 76
a. According to the results of the SWOT analysis,we can propose 76
strategies as following.
b. Analysis of the proposed strategies 76
c. Strategic choices by the QSPM matrix
78

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II/ Some solutions to strategy implementation 79
1. Solutions to production activities 79
2. Solutions to Marketing activities 82
3. Solutions to human resources 84
4. Solutions to technology, research and development 86
5. Solutions to information system 87
6. Solutions to Financial and Accounting 88
III/ Organize the performance 92
1. Strategy implementation 92
2. Assess the implementation of strategy over the years 92
3. Compare performance with targets and adjust strategy 92
IV/ Recommendations 93
1. For the Government 93
2. For Southern Power Corporation 93
3. For the Power Company of Can Tho City 93
V/ Conclusion 94
Refrences 96






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INTRODUCTION
1. The current economic context:
In this era, the rapid development of science and technology, information
technology into a social life is so powerful and the global trade has made the
competitive environment which is constantly change and increasingly fierce;


Businesses are dealing with the capital and human resources; caring for
technology innovation, seeking the sources of raw materials; building appropriate
strategy production, distribution, communication and trade promotion to survive
and develop;
Specifically, the context of the world and Vietnam economy is facing
difficulties and challenges. Vietnam's economic growth is low, production and
business activities and market are facing many difficulties, having more inventories,
the ability to access capital of companies is limited;
The majority of Vietnamese enterprises are small-scale and less capital, the
majority of business owners and private enterprise directors have not been trained
basically on business knowledge, management of socio-economic, culture, law,
business administration skills especially business skills in the context of

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international integration, to cope with the uncertainties in the global business
environment;
Currently, the majority of our enterprises are using outdated technology
compared to the world average of 2 to 3 generations, and most businesses have to
import materials for production. In recent years, many export products and high-

growth product (footwear, textiles, food processing, beverages, steel and non-
ferrous metal products, plastic products, electronic products, cars, motorcycles, etc.)
are dependent on imported raw materials and semi-finished products from abroad,
while the prices of raw materials in the world tend to increase, making the product
group with proportion of the cost of raw materials is high, accounting for over 60%
of production costs; Especially when high inflation in the world, oil prices
continued to reach new records made for businesses falling into a very difficult
situation, forced to downsizing the production scale to be able to survive.
Distribution strategy, communication strategy and trade promotion are
limited. Trade promotion activities are simple, sketchy and have no practical effect.
The new business focused on production of products that did not pay much attention
to the stages of creating added value, such as research and development (R & D),
promotion and marketing (P & M) Most of the businesses are not properly aware
of the value and significance of trade promotion, advertising Therefore,
investment of funds, manpower and other resources for advertising is very low, only
less than 1% of overall sales (percentage of foreign enterprises accounted for about
10% to 20% of sales). Vietnamese businesses do not exploit the combination of
traditional competitive method (competitive prices) with modern style competition
with consultancy & services. It also demonstrates the spread power of Vietnamese
goods to each consumer is still very weak, especially consumers in rural,
mountainous and remote areas. Vietnamese goods are considered lost in its home.
In the current conditions, besides the advantages the Can Tho Power
Company has faced challenges in the general context, requiring the constant
construction, consolidation and improvement of the company management system,

Business strategies for the Can Tho Power Company in period 2013-2018
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overcoming constraints to complete the task, plan and economic and technical
targets.
2. The necessity to choose topic

Along with the development of science and technology, particularly the
development of information technology and communication, the process of
international economic integration with rapid speed, competition among enterprises
become more fierce, and diversified without borders, so the only constant is the
change; business’s success or failure depends on the management of the change that
is good or not, want to be successful, businesses must constantly adapt from office
work to the strategies, systems, products and culture to overcome these changes of
environment and development come up with its power.
The need for adapting to the changes that have led businesses to key issues in
strategic management as: Are we trading in the right field or not? Should we
reshape business operations? What new competitors are entering the industry? What
strategies are we pursuing? How did our customer change ? Can these technologies
which are being developed make us bankrupt?
From the above necessity, when considering the Can Tho Power Company
(PCCT), our group found that the company does not have a specific strategy that
only very general direction, the annual short term plan (this part will be stated in the
introduction of the Company)
3. Objectives and name of the topic :
To exploit these opportunities, cope with challenges, turn these challenges
into opportunities, exploit and promote the strengths and overcome the weaknesses
of the company, the power company must have specific strategies and be adjusted
continuously through each period in accordance with objective reality and tend to
the goals:
- Being efficiency in manufacturing and trading (increase revenue,
price and reduce the cost)
- Improving the labor productivity;

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- Making sure the stable, safe power supply

- Improving quality of service;
- Raising the income, ensuring the life for employees .
Due to Electric Power Co. of Can Tho City existence and sustainable
development in today's business environment, the Group decided to: Build business
strategies for the Can Tho Power Company in period 2013-2018
Can Tho Power Company is a governmental company, which manages,
operates the electricity network (medium and low voltage below 22kV) and sell
electricity to individual household.
The company’s main business activities are to manage, operate and sell
electricity. In addition, the Company also has other extra activities such as repairing
transformers, building electricity network, performing experiment relating to
electricity for customers.
In Vietnam, the government plays the monopoly role in power industry. It is
true in case of Can Tho Power Company and many other companies. However, it’s
not always the case and the exception is made at some provinces as An Giang, Tra
Vinh, Binh Thuan, The power companies at these provinces still have to compete
to take market shares from the existing competitors as rural electricty institution
established long time ago at the rural areas. According to the rule of the power
industry, the existence of these rural electricty institutions is legal. They purchase
electricity in large quantities with low price setting by the government from the
governmental power company, then they invest to develop their own electricity
network after the distribution substations and sell electricity to individual household
with the same price as the governmental power company.
These non-govenrmental rural electricty institutions have various types and
compete rigorously with the governmental power company in rural area of the
province. For instance, An Giang Water-Power Company operates in most of the
rural area of An Giang province, Tra Vinh Rural Power Company operates in many

Business strategies for the Can Tho Power Company in period 2013-2018
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districts of Tra Vinh province, many non-governmental companies operate in five
districts of Binh Thuan province.
Also according to the decision of the Prime Minister approving the master
plan on national electricity development for 2011-2020 are to 2030 (Master Plan 7),
after 2022, the State will form a competitive market in the electricity distribution
sector. An investor can invest in power plants, then signed a power purchase
agreement with the individual consumer, by renting the transmission grid 220,
500kV of electricity Transmission Company and the distribution grid 110 , 22, 0.4
kV of Power Company in the form of payments costs for leasing grid.
Thus, the building of business strategies for the electricity distribution sector
of the Power Company of Can Tho city is essential for the following reasons:
1. Helping the Company to build clear strategies to complete itself, enhance
its strengths and minimize its weaknesses, try to take opportunites,
overcome the threats and challenges to grow strongly in the future.
2. Enlisting the opportunites to widen and take over market shares in
preparation for joining into competitive market in power distribution
sector after 2022.
Hence, the main purpose of this assignment is to focus on buiding business
strategies for Can Tho Power Company in electricity distribution sector.


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CHAPTER 1
THEORETICAL BASIS FOR BUILDING STRATEGY
1/. Overview on strategy and strategic management:
a. Definition of strategy and strategic management: there are many
definitions of strategy, our group selected the definition of strategy in view of
Michael Porter (Source: “What is the strategy”. Havard Business review, 1996) as
follows:

” Strategy is creating fit among a company's activities”;

It means that the competitiveness is gained from the operating system rather
than its parts, and the compatibility between the operation occurs when the activities
contribute to strengthening and enhancing the effectiveness of other activities in the
chain value of the business.
Strategic Management: According to Fred David: “ Strategic management
is , an art and science of formulating, implementing and evaluating cross functional
decisions that enable of an organization to achieve its objectives”.
b. The strategic level of businesses:
Strategy should be at the following levels in the enterprises:
Corporate straregy: The whole purpose and scope of the enterprise is built to
meet the expectations of stakeholders. This is core level because it is strongly

Business strategies for the Can Tho Power Company in period 2013-2018
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influenced by the investors within the enterprise and acted to guide strategic
decision-making throughout the enterprise. Corporate strategy is usually evident in
the company's mission statement.
Strategic Business Unit -SBU: Strategic Business Unit -SBU (referred to as
business strategies) is related to how the company successfully competes on the
specific market. It relates to the strategic decisions about the selection of products to
meet customer needs, gain an advantage over competitors, exploit or create new
opportunities, etc.
Functional strategy: How each division of businesses is organized to bring
the strategic direction to the corporate and business unit level. Thus, the functional
strategy focuses on issues of resources, processes, people, etc.
c. Strategic management process:
i. Strategy formulation: it is the process of setting up business tasks,
conducting survey to identify defective elements inside and outside, setting long-

term goals and selecting alternative strategies;
ii. Strategy implementation: This phase mobilizes administrators and staff to
implement the strategy that has been set up, three main activities are to set up
annual objectives, make policy and allocate resources, this phase is the most
difficult phase in the strategic management process;
iii. Strategy evaluation: Strategy evaluation is the final step of strategy
management process. The key strategy evaluation activities are: appraising internal
and external factors that are the root of present strategies, measuring performance,
and taking remedial / corrective actions
2/. Business strategy management process:
Step 1: Identifying vision, mission and objectives of the business;
a. Vision:
Definition: Strategic vision is long-term orientations that managers set up the
future of the enterprise based on the forecasts of the volatility of the business
environment; business vision is to answer the question: what do the Businesses

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want to become? It is often the first step, presenting in a short statement to express
the will of the managers;
Requirement: a vision is considered to be effective when it includes the
following features: Inspiration, clearness and liveliness, showing a better future;
Characteristics:
Vision is a picture, a vivid picture of what might happen in the future, cover
the significance of an excellent standard, an ideal, a vision of a unique nature, it
refers to creating something special and vision is a brief message and throughout
business-oriented activities;
b. Mission:
Definition: it is a statement of long-term value about the purpose; it helps
distinguish this company from other companies, such statement is also known as the

business philosophy, business principles, and the beliefs of the company. The
mission statement is a "reason for existence" of a company.
Role of the mission:
According to King & Cleland Organization, Identifying proper mission plays
an important role in the success of a business as:
It guarantees an agreement on internal business purposes, it provides a basis
or standard for distribution of resources of the enterprise; It creates a common
language and it is the center for people to agree with purpose and direction of the
business; It facilitates to change the purpose of the business into appropriate goals,
change objectives into strategies and measures for specific activities; It formed the
basis for the choice of objectives and strategies of businesses; It creates and
strengthens the image of enterprises to the public, makes it attractive to the
stakeholders (customers, suppliers, banks, state ).
The content of a mission statement:
According to Fred David, a mission statement consists of nine contents: Who
will consume the company products? What are the company products/ services?
What technologies does the company use? And the technology is the top concern of

Business strategies for the Can Tho Power Company in period 2013-2018
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the company, isn’t it? Concern for survival, growth, and profitability: “Is the
company committed to growth and financial soundness? “What are the basic
beliefs, values, aspirations, and ethical priorities of the company? What is the firm’s
distinctive competence or major competitive advantage? Concern for public image:
“Is the company responsive to social, community, and environmental concerns?
Concern for employees: “Are employees a valuable asset of the firm?”
c. Objectives:
- Long-term objectives:
Long-term objectives can be defined as the result of determining that an
organization seeks to achieve in pursuing task / mission. The strategy indicates

measures to achieve long-term goals. Time frame for objectives and strategies
should match each other, usually from two to five years.


- Short-term objectives:
Short-term objectives are annual goals, specifically with quantitative targets
to know what problems we will focus on.
Step 2: Analyzing environment:
1/. Analyzing the external environment:
External environment of the enterprise can be divided into two levels: the
macro environment and micro environment.

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a. Macro environment:
Macro environment includes the group of the economic, socio-cultural,
demographic, natural, political-legal, technological factors.
+ Economic Environment: Markets require purchasing power and humans.
These important factors directly affect the strategy of enterprises such as gross
domestic product, per capita income, integration policy, international economic
integration;
+ Socio-cultural environment: views on quality of life, ethics, lifestyle, art,
customs, practices, traditions, the level of awareness, education in society,
consumer trends;
+ Demographic environment: total population, the number of people of
working age, the rate of population growth, changes in population structure (age,
gender, ethnicity, occupation, income, ), life expectancy, age structure, marriage,
family structure, education, population movement between areas;
+ Natural environment: including natural resources to ensure the necessary
inputs and the operating environment for businesses, organizations, the factors need

to study: geographical location, natural conditions, climate, mineral resources, and
reserves, energy resources, exploitation situation and use of natural resources,
environmental issues and environmental pollution, the attention of governments and
communities to the environment;
+ Political and legal environment: target of political institutions, political
stability, and prestige, ability to control of governments, international treaties, laws
and legal system govern directly business operations of the organization.
+ Technological environment: the introduction of new technologies,
innovation speed and application of new technologies, incentives and funding of
government for research and development (R & D), the pressure and the cost of
developing new technology.

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b. Micro environment:
Micro environment consists of the internal factors and the external factors
for enterprises, which determine the nature and extent of competition in the
industry. Micro environment consists of five basic elements, which are the current
competitors, potential competitors, customers, suppliers and substitute products.
The relationship between these factors is reflected in the following figure 2.1:














Figure 2.1: General diagram of the micro environment

+ Current competitors: the current competitors are competitors who currently
hold market share in the market; they are main competitors who are competing with
businesses and affecting the business level of enterprise. Based on the analysis of
competitors can form the competitive profile matrix.
Industry competitors

Rivalry among existing
firms













Suppliers
Buyers
Potential Entrants
Substitutes

Bargaining power of
buyers
Bargaining power of
suppliers
Threats of new entrants
Threats of substitute
products/ services

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Table 2.1: Competitive Profile Matrix


No


Critical success
factors
Weight
Enterprise A
Enterprise B
Enterprise C
Rating
Weighted
score
Rating
Weighte
d score
Rating
Weighted

score
1








2








….








Total








(Source: Nguyen Thi Lien Diep and Pham Van Nam (2006), Strategy and business
policies of Labor and Social Affairs Publishing House, Ho Chi Minh City.)
The Competitive Profile Matrix (CPM) identifies a firm's major competitors
and their particular strengths and weaknesses in relation to a sample firm's strategic
position. This matrix is an expansion of the External Factor Evaluation matrix
(EFE) because it includes both internal and external factors of decisive importance
to the success of the enterprise. Also, in the CPM, the competitors will also be
considered and calculated the total weighted scores. The total evaluated scores of
these competitive enterprises are compared with researching enterprises. The
comparison provides enterprises with important strategic information.
+ Potential competitors: potential competitors may be factors that reduce
the profits of companies because they put into operation of new production
capacity, with the desire to gain market share and the necessary resources.
+ Customers: an integral part of the enterprises. Enterprises need to identify
current and future customers to have clear strategic direction. Customer analysis
based on various criteria such as geography, demography, income, customer
psychology. Another important issue related to customers is their bargaining power
+ Suppliers: suppliers include individuals or businesses that provide goods
or services and equipment; financial community; labor sources. Similar to

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customers, while suppliers have advantages, they can cause pressure and create
disadvantages for businesses.

+ Substitutes: pressure from substitute products limits the profit because of
price competition or the trend of using substitute products of the buyer. Therefore,
enterprises need to use resources and new technology into their product strategy.
2/. Analyzing the internal environment:
Analyzing production activities:
This is the backbone stage to decide all other activities internally. We need
to consider a number of key issues such as: the process of production, capacity,
inventories, the use of human resources and product quality.
Marketing factor:
Marketing can be described as a process of identifying, forecasting, setting
and meeting the desired needs of the consumers for the product or service


Accounting and financial factors:
Financial condition is often seen as methods to evaluate the best competitive
position of the company and it is attractive condition for investors. To form
effective strategies, we need to identify the strengths and weaknesses of the
organization's finance. Solvency, leverage, working capital, profits, use of capital,
cash flow and equity capital of the company can make a strategy more viable.
Financial factors often change the current strategy and the implementation of the
plan.
Management factor:
This is a very important factor contributing to achieve the business objectives
with the highest efficiency. Management has five basic functions: planning,
organizing, directing, staffing and controlling.
Research and development factor:

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The focus on research and development activities can vary greatly depending

on a company's competitive strategy. Some companies want to become leaders in
the market, the creators of new products, while other companies are satisfied with
the submissive position and production of products is available on the basic skills to
support this strategy which is also different, depending on whether it is a key factor
of competitive strategy or not
Information System:
- Management information system is a set of rules, skills, and clearly
described methods by which people and equipment shall collect and analyze data in
order to generate the necessary information for the administrators’ decision.
- The best information system is a simple system, which provides
information for those wishing people in the form of being used
- The purpose of this information is to improve the operation of a business by
improving the quality of management decisions;
- Effective information system will collect, encode, store, aggregate and
provide the information to answer these important questions of strategy and
organization;
- Center of Information System is a database that contains the important
records and data for administrators
Step 3: Identifying long-term goals and building business development
strategies;
Step 4: Identifying action plans and deploying solutions to implement
strategies;
Step 5: Checking results and adjusting accordingly;
3/. Use and collaboration tools to review and set forth business strategy:
a.External Factor Evaluation – EFE Matrix:
The EFE matrix is the evaluation of external factors, synthesis and summary
of the principal opportunities and risks of the external environment affecting the
operation of the business which helps the managers assess the extent of the business

Business strategies for the Can Tho Power Company in period 2013-2018

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response to opportunities, threats and make judgments about the external factors
that t is favorable or difficult for businesses.
Table 3.1 External Factor Evaluation Matrix (EFE)
External strategic factors
Weight
Rating
Weighted
score
list a series of company's external
opportunities and threats



Total
1,00


(Source: Nguyen Thi Lien Diep and Pham Van Nam (2006), Strategy and business
policies of Labor and Social Affairs Publishing House, Ho Chi Minh City.)
EFE Matrix helps enterprises to summarize and quantify the effects of
external environmental factors to the enterprise. EFE matrix is developed in five
steps:
+ Step 1: Make a list of factors that play a decisive role for the success as
identified in the audit process from the external factors, including the opportunities
and threats affecting the firm and its industry.
+ Step 2: Assign to each factor a weight that ranges from 0.0 (not important)
to 1.0 (very important). This weight indicates the relative importance of that factor
to being successful in the firm’s industry. The total weight level must be equal to
1,0.

+ Step 3: Assign a 1 to 4 rating for each decisive factor of the success to
show how the company's current strategies response to these factors, including 4 is
good response, 3 is above average response, 2 is average response and 1 is poor
reaction
+ Step 4: Multiply each factor’s weight by its rating to determine a weighted
score.
+ Step 5: Sum the weighted scores for each variable to determine the total
weighted score for the organization.

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Comments: Regardless of the number of key opportunities and threats
included in an EFE matrix, the highest possible total weighted score for an
organization is 4.0 and the lowest possible total weighted score is 1.0. The average
total weighted score is 2.5. A total weighted score of 4.0 indicates that an
organization is responding in an outstanding way to existing opportunities and
threats in its industry. A total score of 1.0 indicates the firm’s strategies are not
capitalizing on opportunities or avoiding external threats
b. Internal Factor Evaluation – IFE Matrix:
Internal factors are considered very important in every business strategy and
objectives set by the enterprise, after taking into account internal factors, strategic
managers need to set up the IFE Matrix to consider the ability of reacting and
recognizing strengths and weaknesses. From there things, it will help businesses
take advantage of the strengths to exploit and prepare internal resources to confront
the weaknesses and find ways to improve these weakness
According Fred R.David, the internal situation of the enterprise includes
major factors such as human resources, marketing, finance, research and
development, production and operations, quality management and information
systems. The result analysis of the internal environment of the enterprise is to
determine the strengths, weaknesses and build the internal factor evaluation matrix

(IFE).
Table 3.2 Internal Factor Evaluation Matrix (IFE)
Internal strategic factors
Weight
Rating
Weighted score
list a series of company's
internal strengths and
weaknesses



Total
1,00


(Source: Nguyen Thi Lien Diep and Pham Van Nam (2006), Strategy and business
policies of Labor and Social Affairs Publishing House, Ho Chi Minh City).

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EFE matrix is developed in five steps:
+ Step 1: List key internal factors as identified in the internal-audit process.
Use the main internal factors including both strengths and weaknesses.
+ Step2: Assign to each factor a weight that ranges from 0.0 (not important)
to 1.0 (very important). This weight indicates the relative importance of that factor
to being successful in the firm’s industry. The total weight level must be equal to
1,0.
+ Step 3: Assign a 1-to-4 rating to each factor to indicate whether that factor
represents a major weakness (rating 1), a minor weakness (rating 2), a minor

strength (rating 3), or a major strength (rating4). Ratings are, thus, company based,
whereas the weights in Step 2 are industry based.
+ Step 4: Multiply each factor’s weight by its rating to determine a weighted
score.
+ Step 5: Sum the weighted scores for each variable to determine the total
weighted score for the organization.
Regardless of how many factors are included in an IFE Matrix, the total
weighted score can range from a low of 1.0 to a high of 4.0, with the average score
being 2.5. Total weighted scores well below 2.5 characterize organizations that are
weak internally, whereas scores significantly above 2.5 indicate a strong internal
position.
c. SPACE Matrix:
SPACE matrix shows that a business should choose the strategy: Aggressive,
Conservative, Defensive, and Competitive strategy. The axes of the matrix have the
following meanings:
- FS: Financials Strengths
- CA: Competitive Advantage
- ES : Environment Stability
- IS: Industry Strength
To set up a SPACE Matrix need to follow the steps below:

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• Step 1: Select a set of variables to define financial strength (FS),
competitive advantage (CA), environmental stability (ES), and industry strength
(IS)
Here are some of the indicators used to reflect on the SPACE matrix axis:
Internal strategic position
External strategic position
Financials Strengths (FS)

Environment Stability (ES)
- Return on investment
- Technological changes
- Leverage
- Inflation rates
- Liquidity
- Demand variability
- Working capital
- Price disturbances of competitive
products
- Cash flow
- Barriers to entry into market
- Ease of withdrawal from the market
- Competitive pressure
- Risk in business
- Price elasticity of demand
Competitive Advantage (CA)
Industry Strength (IS)
- Market share
- Growth potential
- Product quality
- Profit potential
- Product life cycle
- Financial stability
- Customer loyalty
- Technological know-how
- Capacity use for competition
- Resources Utilization
- Technological know-how
- Capital scale

- Control over supplier
- Ease of Entry into market

- Use of productivity, capacity
• Step 2: Assign a numerical value ranging from +1 (worst) to +6 (best) to each
of the variables that make up the FS and IS dimensions. Assign a numerical value

Business strategies for the Can Tho Power Company in period 2013-2018
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ranging from -1 (best) to -6 (worst) to each of the variables that make up the ES and
CA dimensions
• Step 3: Compute an average score for FS, CA, IS, and ES by summing the
values given to the variables of each dimension and dividing by the number of
variables included in the respective dimension. Similar to the IS, ES and CA
• Step 4: Plot the average scores for FS, IS, ES, and CA on the appropriate axis
in the SPACE Matrix
• Step 5: Add the two scores on the x-axis and plot the resultant point on X. Add
the two scores on they-axis and plot the resultant point on Y. Plot the intersection of
the new XY point
• Step 6: Draw a directional vector from the origin of the SPACE Matrix
through the new intersection point. This vector reveals the type of strategies
recommended for the organization: aggressive, competitive, defensive, or
conservative?
d. SWOT Matrix :
SWOT is an abbreviation of the words: Strengths, Weaknesses,
Opportunities and Threats
Based on the information from the analysis of the internal and the external
environment of the business, along with the corporate mission and objectives were
set forth. Next, the authors use the SWOT matrix to form strategies.
SWOT Matrix

SWOT
O: Opportunities
Make a list of Opportunities
T: Threats
Make a list of threats
S: Strengths
Make a list of
strengths
S-O Strategies
Use strengths to take
advantage of opportunities
S-T Strategies
Overcome these uncertainties
by utilizing the strengths