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Improving the competitiveness of the military telecommunications corporation - Viettel in the context of international economic integration - 1


FOREIGN TRADE UNIVERSITY FACULTY OF ECONOMICS AND INTERNATIONAL BUSINESS MAJOR IN FOREIGN ECONOMICS

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Improving the competitiveness of the military telecommunications corporation - Viettel in the context of international economic integration - 1


GRADUATION THESIS


TOPIC:


IMPROVING COMPETITIVENESS

MILITARY TELECOMMUNICATIONS CORPORATION – VIETTEL IN THE CONTEXT OF INTERNATIONAL ECONOMIC INTEGRATION


Student name: Le Mai Trang Class: English 7

Course: 42B – KT&KDQT

Instructor: Associate Professor, Dr. Pham Duy Lien


Hanoi, November 2007



1. Urgency of the topic.

PREFACE

In recent decades, integration and globalization have taken place rapidly, becoming an irreversible trend of the world economy. This is an inevitable objective movement, originating from the strong development of productive forces, division of labor, market economy and modern scientific and technological revolution. Following that trend, countries have been carrying out opening activities to attract foreign investment as well as to reach out to the world. No one denies the benefits of the integration process into the international economy for developing countries such as helping these countries attract capital, technology, management experience, etc. These factors contribute greatly to the development of the country's economy. However, it is also necessary to objectively recognize that economic integration means gradually removing protectionist barriers, foreign companies have favorable conditions to penetrate the domestic market, especially multinational companies. They have strong potential in terms of capital, management experience, technology, etc. This will create fierce competition for domestic companies in the domestic market. A fiercely competitive environment is both a driving force forcing domestic companies to innovate to improve their competitiveness, and at the same time is the main cause of domestic companies' narrowing of the market, losses, and even bankruptcy. This causes significant impacts on the economy.

As a business under the Ministry of National Defense operating in the field of telecommunications, infrastructure, and key economic sectors of the country, the Military Telecommunications Corporation - Viettel is not outside this integration vortex. In order to build and position the Viettel brand in the market as well as to fulfill its leading role in the national economy, Viettel has constantly strived to expand its telecommunications network nationwide, developing and providing many new, advanced and modern services with the goal: "Care - Care - Creativity - Breakthrough". However, as relationships expand, there are more and more opportunities for businesses, but


The challenges are not small. Viettel is always threatened by current and potential competitors both domestically and internationally. Therefore, improving Viettel's competitiveness is the top priority to help this enterprise stand firm in the domestic market as well as compete effectively in the international market.

Based on practical requirements as well as the urgency of the problem, I decided to choose the topic: "Improving the competitiveness of the Military Telecommunications Corporation - Viettel in the context of international economic integration" as the topic for my graduation thesis.

2. Research objectives of the topic.

Apply the knowledge and theories acquired at school to the current competitive situation of commercial enterprises in general and of the Military Telecommunications Corporation - Viettel in particular. On that basis, make assessments and propose some solutions to improve the competitiveness of the Military Telecommunications Corporation - Viettel.

3. Research objects and scope.

The research object of the thesis is the business operation process of the Military Telecommunications Corporation - Viettel in the interactive relationship with the business environment.

The scope of the thesis is the competitiveness of the Military Telecommunications Corporation - Viettel from 2000 to present when the Vietnamese economy has many clear changes.

4. Research methods.

The thesis takes dialectical materialism as the methodological basis when conducting research on the interaction between factors forming the competitiveness of the Military Telecommunications Corporation - Viettel. In addition, the thesis also combines the use of other research methods such as statistical methods, analytical methods, systematic methods, comparative methods, synthetic methods... to clarify the research object, thereby grasping the business situation as well as the competitiveness of the enterprise.


5. Content.

In addition to the introduction, conclusion and appendix, the thesis is divided into three chapters as follows:

- Chapter 1. Overview of competition and business competitiveness.

- Chapter 2. Current status of competitiveness of Military Telecommunications Corporation - Viettel in the context of international economic integration.

- Chapter 3. Some solutions to improve the competitiveness of Military Telecommunications Corporation - Viettel.


CHAPTER 1. OVERVIEW OF COMPETITION AND COMPETITIVENESS OF ENTERPRISES

I. CONCEPT OF COMPETITION, COMPETITIVE CAPACITY.

1. Concept of competition

Competition is not a new concept, but it is very difficult to have a unified and broad definition of it. The reason here is that the concept of "competition" is used in many fields, professions, at many different levels (individuals, businesses, countries) and for many different purposes (profit, social welfare, etc.). In fact, competition is a concept most often used in economic science, but it is not defined specifically and clearly. Previously, when studying capitalism, Karl Marx mentioned the issue of competition among capitalists. According to Karl Marx's point of view: "Capitalist competition is the rivalry, the fierce struggle between capitalists to win favorable conditions in the production and consumption of goods to gain excess profits" [13, page 19]. Here, Marx mentioned the issue of competition in capitalist society, the characteristic of which is private ownership of the means of production. Therefore, according to this concept, competition originates from the private ownership regime. Competition is the domination and suppression of each other to survive. That concept of competition is viewed from a negative perspective. Today, most countries in the world recognize competition and consider competition as both the environment and the driving force of socio-economic development. Therefore, competition can be understood as follows: "Competition is rivalry, a fierce, fierce struggle between business entities in a specific commodity market to win customers and markets, thereby consuming more goods and earning high profits" [18, page 16]. Business entities here are individuals, businesses, economies or countries. In this concept of competition, there is no competition of goods because the goods themselves are not a business entity and therefore they cannot compete on their own. Talking about competition here means talking about the behavior of the entity and therefore there is only the behavior of business enterprises and individuals.


business and of an economy, there is no behavior of goods. Thus, competition is considered a method of market operation. For buyers, they want to buy high quality goods at a reasonable price. On the contrary, businesses always want to maximize profits, they have to reduce production costs and find ways to win each customer and market to their side and thus competition will occur.

* Some basic conditions for competition to appear in the economy are:

- There must be a market, which means there must be a market economy.

- That market must have at least two members on the supply or demand side supplying or consuming the same type of product, service or similar products, services or products that are substitutes for each other.

- The level of goal achievement of one member will negatively affect the level of goal achievement of another member (for example, expanding the market share of one enterprise will risk losing market share of the remaining enterprises, reducing the revenue and profit of the remaining enterprises).

Competition is one of the basic characteristics and driving force of the market economy, the ability to compete is the survival condition of each product, each enterprise, and each country. The results of competition will determine the position of the enterprise in the market, competition will create flexibility for the enterprise, strive to innovate technology, productivity, human resources... and force the enterprise to focus on the market to orient production and business activities. Competition will eliminate weak enterprises, help enterprises explore and overcome weaknesses to rise to hold the market. Enterprises with effective competition policies will create a position in the market, increase profits and increase income for workers. Enterprises without effective competition policies will not be able to develop products and expand customer networks, and may even lead to bankruptcy. However, competitive position is only relative, it can be strong at one time but weak at another time. Thus, businesses must always view competition and competitive conditions as


one of the important bases for building short-term and long-term development strategies. Competition can bring benefits to some people and damage to others, but in terms of the benefit of the whole society, competition always has positive effects such as: better quality, cheaper prices, more attentive service... Like the law of survival and elimination in nature, the law of competition is to eliminate weak members in the market, maintain and develop the best members and thereby effectively support the development process of the whole society.

2. Concept of competitiveness.

Many economists have conducted research on competitive advantage or competitiveness of enterprises. Most of them associate enterprise competitiveness with the advantages of the products that the enterprise brings to the market or associate competitiveness with the position of the enterprise in the market according to the market share that the enterprise occupies through the ability to organize and manage business towards technological innovation, reduce costs to maintain or increase profits, ensure the existence and sustainable development of the enterprise.

First, in the theory of industrial organization, the concept of competitiveness is applied at the enterprise level: “An enterprise is considered to be competitive when it maintains its position in the market with other manufacturers with alternative products, or brings to the market similar products at lower prices, or provides similar products with equal or higher quality or service characteristics” [18, page 23]. According to this concept, competitiveness is limited to reducing production costs. If enterprises want to be competitive in the market, they only need to find ways to minimize production costs, that is, to produce products with similar quality but at a lower price than other enterprises, they will have higher competitiveness in the market. This concept of competitiveness is still quite one-sided and rudimentary, it does not mention the aspect of improving products to better meet market needs.


In the new circumstances, economists have proposed new theories of competitiveness such as the Heckser-Ohlin theory. Later, this theory was supplemented by economist Samuelson, so it was called the Heckser-Ohlin-Samuelson model. This theory analyzes competitive advantage according to factors. Paul Krugman, Helpman, ... analyzed competitive advantage based on scale and differentiation. Michael Porter proposed the concept of competitiveness from the perspective of a strategic manager. He said: "To compete successfully, businesses must have competitive advantages in the form of either lower costs or the ability to differentiate products to achieve higher than average prices. To maintain competitive advantage, businesses need to achieve increasingly sophisticated competitive advantages. Thereby, they can provide goods or services of higher quality or produce more efficiently" [15, page 29]. According to this concept, the issue of competitiveness also includes the fact that enterprises must continuously maintain their competitive advantage. In other words, enterprises must maintain profit margins on the basis of closely following the pace of market development, or proactively creating market development. According to Michael Porter, lowering production costs to improve competitiveness is not done through negative measures such as cutting wages, environmental costs, labor protection costs, welfare costs, etc., but is the effective use of social resources.

Thus, in reality, there are many specific and different concepts about the competitiveness of enterprises. But in general, we can understand: " The competitiveness of an enterprise is the ability to create, maintain, and creatively use the enterprise's competitive advantages to better meet customer needs (compared to competitors) and achieve the enterprise's goals in the domestic and international competitive environment " [6, page 25]. Competitiveness comes from the fact that the enterprise owns resources (tangible and intangible) that are unique, difficult to copy and valuable, and at the same time the enterprise has the ability to effectively exploit and use those resources. An enterprise can only have

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